“I knew [he] was going to be a bad witness by the enormously confident way that he marched into the box, held the Bible up aloft and promised to tell the truth, the whole truth and nothing but the truth. He was that dreadful sort of witness, the one who can’t wait to give evidence, and who has been longing, with unconcealed impatience, for his day in Court. He leant up against the top of the box and surveyed us all with an expression of tolerant disdain, as though we had made a bit of a pig’s breakfast of his case up to that moment, and it was now up to him to put it right.”
—Horace Rumpole, on his overconfident client1
As litigators know, witnesses are not all the same. Every witness has weaknesses and strengths. Witnesses have myriad idiosyncrasies and a variety of anxieties about testifying. They often have mistaken assumptions about what it means to be an effective witness.
Here’s one example from the TV show Taxi. Dispatcher Louie DePalma, played by Danny DeVito, gets a subpoena to testify. One of the drivers says: “Louie, you’re gonna be under oath, you know what that means!” Louie smirks and responds: “Yeah. It means they got to believe me.”2
Some witnesses, like Louie, are overconfident. Others lack confidence. Some, for various psychological reasons, suffer from the Stockholm Syndrome and identify with the other side. Some are too agreeable. Some are too disagreeable. Some are too taciturn. Others are too loquacious. Some use pretentious words—like taciturn and loquacious.
Every witness is different in some ways from the last witness and from the next witness. But all witnesses have one thing in common: they need help from their side’s lawyer. From you.
Ahead, I suggest eight topics to start witness-preparation before you get into the case-specific details of the direct examination and the anticipated cross-examination. Then I discuss rules for witnesses and the only six answers that a prepared witness needs.
These topics are aimed at empowering witnesses, at clearing the witness’s path—and yours—to presenting effective testimony. You, of course, will tailor your treatment of these topics and your preparation efforts to each witness, to the pertinent circumstances, to your resources, and to your personality.
EIGHT PRELIMINARY TOPICS
Confidentiality
You will assure the witness that the sensitive content of your discussion won’t later appear on the front page of the New York Times. For clients, you will explain the attorney-client privilege. For nonclients, you will communicate your discretion.
The predecessor to the Model Rules of Professional Conduct distinguished between confidences and secrets. Confidences are privileged. Secrets are subject to the lawyer’s discretion and respect for witness privacy. Explaining these things will help build trust and alleviate witness-anxiety.
Of course, only make privacy commitments you will be able to keep. Sometimes you will have to open the curtain and act on information you get from prospective witnesses.
Sometimes, for example, union lawyers must navigate the different—if not conflicting—obligations owed to the international, the local, unit members, other parties, the court, and others. It is the same for most lawyers who represent institutions or multiple parties. Management lawyers may have to navigate the different—if not conflicting—interests between the CEO, the COO, in-house counsel, the HR director, managers, shareholders, and others.
You will explain that the witness’s job is easy: tell the truth. Mark Twain wrote: “When in doubt, tell the truth.”3 Of course, as Oscar Wilde noted: “The truth is rarely pure and never simple.”4
There is the joke about asking how much two and two are. The accountant answers: “Four.” The mathematician answers: “Four.” The lawyer answers: “How much do you want it to be?”
Your assurance that you are looking for the truth will free the witness from wondering whether you expect him or her to—shall we say—stretch the truth. Or worse.
That brings us to the next topic—coaching witnesses.
It’s okay to prepare testimony
You will assure the witness that not only is it okay to be having this preparation-conversation—it is good, ethical, and necessary. I repeat for emphasis: Coaching is good. Coaching is ethical. Coaching is necessary.
Coaching—done well, ethically, and properly—is preparation led by an accomplished lawyer aimed at getting the witness ready to effectively present the truth.
Effective testimony requires collaboration. The lawyer and the witness will make judgments about testimonial-things like: (i) what facts to include as necessary and what facts to exclude as superfluous; (ii) the order of presentation—by topic, by chronology, or by some other organizing principle; (iii) wording, clarity, and emotional tone; (iv) putting the emphasis on the right syllable; (v) the use of aids, like photos, charts, documents, etc.
Every witness needs a good coach. Most need practice answering direct and cross-examination questions. You will explain that you and the witness need to prepare and practice to present the evidence in the best light to—as the song says—accentuate the positive.
The truth is too important to leave to improvisation.
What the case is about
You will tell the witness something like: Our side is saying ABC. To prove our case, we need to provide evidence—witness testimony and documents and other exhibits—to show A, B, and C. The other side says we can’t prove A or C. Their defense is XYZ. We will show they are overlooking 1, 2, and 3. Here is how your important testimony fits in to the big picture…
The depth and detail of your case overview will vary depending on the witness’s role in the big picture. But some level of education about the case is appropriate and almost always necessary.
In addition, educated witnesses may end up educating you—by providing information, ideas, perspectives, and insights that may otherwise escape your attention.
CLICK HERE to read the full article, which was originally published in ALI CLE’s The Practical Lawyer.
To find our more about ALI CLE’s in-person courses or webcasts, or to check out on-demand CLE, click here.
“Three may keep a secret, if two of themare dead.”
– Benjamin Franklin, Poor Richard’s Almanac
From law firms with fewer than 10 attorneys to those with more than 500 and from bar associations to state courthouses, dozens of organizations involved in the legal profession have reported experiencing cyberattacks compromising their confidential information in the past few years. The American Bar Association (ABA) reported that more than 100 such organizations disclosed similar attacks from 2014 to 2019; and more than one in four law firms disclosed experiencing data breaches from 2021 to 2022. In the first quarter of 2023, the global rate of cyberattacks rose by seven percent, with one in 40 focused on law firms or insurance providers, proving it to be an accelerating (albeit not new) phenomenon.
Not surprisingly, attorneys regardless of firm size have voiced significant and increasing concerns over protecting the privacy and security of the confidential information entrusted to them. When it comes to security defenses, however, many law firms lag well behind most other organizations, including their own clients. According to the ABA report, only 49 percent of firms regularly use file encryption and only 40 percent regularly use email encryption—both common cybersecurity defense techniques used by businesses across the country.
The result is that hackers have come to view the legal profession as a preferred point of attack. Data breaches at five prominent law firms made the news in 2023. These incidents are not just a mess that firms must clean up in house. Clients-become-plaintiffs have filed at least five class actions claiming that the named firms failed in their duties to sufficiently guard confidential information against disclosure.
In response to these pressures, many firms have wisely added cyber insurance policies to their insurance portfolios. Unfortunately, while helpful, even the best cyber insurance policies do not come close to adequately mitigating the damages caused by data breaches. Attorneys and their firms cannot insure against the time lost in opening locked-down systems and retrieving lost data. Nor can they insure against the licensure implications of failing to comply with professional ethical rules that require better safeguards or the potentially serious penalties associated with violations of federal and state laws. There are also important questions involving the waiver of attorney-client privilege where attorneys fail to take reasonable measures to safeguard the confidentiality of their clients’ information. Consider also the significant costs of losing clients and the negative public relations implications of losing control of sensitive and confidential client information—information that is often sold to the highest bidder on the dark web or made public. The limitations of cyber insurance could not be any clearer, making it especially important that attorneys proactively manage and mitigate cyber risks both before and in response to attacks when they occur.
Interested in learning more? Check out ALI CLE’s upcoming webcast, Generative AI on Trial on October 21, 2024!
ABA MODEL RULES OF PROFESSIONAL CONDUCT
A variety of attorney ethical rules clearly require attorneys to take objectively reasonable measures to identify and manage these risks. Our analysis focuses on the ABA Model Rules of Professional Conduct.
The ABA Model Rules of Professional Conduct make it clear that attorneys shoulder the obligation to maintain the confidentiality of their clients’ information in whatever technological environment they work within. ABA Model Rule Section 1.1 provides that “[a] lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”1 Focusing on the technological environment, Comment 8 to Model Rule 1 makes clear that “[t]o maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.” Clearly in today’s day and age, under the ABA Model Rules, the duty of competency requires a reasonable level cybersecurity understanding.
The ABA Model Rules also make it clear that attorneys have an obligation to ensure that the tools used to maintain and communicate client information are secure. ABA Model Rule Section 1.6(c) provides that “[a] lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.” Comment 18 sets forth the factors to be considered in determining the reasonableness of the lawyer’s efforts, including, but not limited to:
the sensitivity of the information, the likelihood of disclosure if additional safeguards are not employed, the cost of employing additional safeguards, the difficulty of implementing the safeguards, and the extent to which the safeguards adversely affect the lawyer’s ability to represent clients (e.g., by making a device or important piece of software excessively difficult to use).2
ABA Formal Opinion 477 adds additional clarity, providing that:
[a] lawyer may be required to take special security precautions to protect against the inadvertent or unauthorized disclosure of client information when required by an agreement with the client or by law, or when the nature of the information requires a higher degree of security.3
Following upon Formal Opinion 477, Formal Opinion 483 strikes directly at the matter of cybersecurity, stating “[t]he potential for an ethical violation occurs when a lawyer does not undertake reasonable efforts to avoid data loss or to detect cyber-intrusion, and that lack of reasonable effort is the cause of the breach.”4 Opinion 483 further states that “[a]s a matter of preparation and best practices… lawyers should consider proactively developing an incident response plan with specific plans and procedures for responding to a data breach.”5
In a world where most information is received, stored, used, and transmitted electronically, the ABA Model Rules require attorneys to undertake proactive reasonable efforts to protect that information, and to prepare to respond to potential breaches.
In addition to attorney ethical rules, multiple federal laws governing the protection of certain information require attorneys and their firms to take proactive, effective actions to safeguard that information. While a full accounting and explanation of the federal laws are beyond the scope of this article, many law firms face one central and well-known law—the Health Insurance Portability and Accountability Act of 1996, and its progeny law, the Health Information Technology for Economic and Clinical Health Act (together as HIPAA).6 As HIPAA business associates, law firms that receive, store, use, or transmit HIPAA-defined Protected Health Information are required to maintain adherence to HIPAA’s privacy and security requirements.
For information security, HIPAA provides the HIPAA Security Rule, containing more than 60 required or addressable actions. Serious civil and/or criminal penalties can be assessed for violations of HIPAA’s requirements. For the years 2023 and 2024, civil penalties range between $137 per violation to a whopping $68,928 per violation, depending upon level of culpability, with an annual penalty limit of $2,067,813. Criminal penalties can include fines of up to $250,000, imprisonment of up to 10 years, or both.7
In addition to the federal laws, numerous states have enacted laws that require businesses that own, license, or maintain personal information to implement and maintain “reasonable security procedures and practices” to protect personal information from unauthorized access.8 At this time, all 50 states and the District of Columbia have enacted legislation requiring businesses and other entities to notify affected individuals when data breaches involving their personal information occur.9 In addition, 32 states plus the District of Columbia require that notice of the breaches be made to certain state agencies and law enforcement authorities, typically to the state attorney general’s office and/or office of consumer protection.10
CLICK HERE to read the full article, which was originally published in ALI CLE’s The Practical Lawyer.
To find our more about ALI CLE’s in-person courses or webcasts, or to check out on-demand CLE, click here.
Join us for abundant networking opportunities and legal guidance from an unmatched faculty with deep technical expertise.
Get a glimpse of this year’s expected discussion points:
The potential impact of the Supreme Court’s recent decisions in Jarkesy, Loper Bright, and Corner Post on the rulemaking and enforcement powers of the SEC, DOL, and other federal agencies.
The new SEC disclosure framework for registered index-linked annuities and other SEC disclosure developments
The recently promulgated DOL fiduciary rule and related exemptions; current status of related litigation; how DOL initiatives will impact insurance companies, IMOs and other intermediaries, and service providers
New products being offered in the retirement and retail markets
The current federal and state rulemaking agenda and how it will impact insurance and investment products and retirement plans
Essential takeaways from recent enforcement cases and private litigation
Current NAIC initiatives relating to products, privacy regulation, AI and other matters
Key compliance examination developments and best practices
Remain at the forefront of your practice with this year’s conference and its analysis of current issues and critical legal developments, including the practical impacts of the demise of Chevron deference doctrine and other recent Supreme Court decisions.
This conference is the foremost CLE authority examining the intricate array of disclosure, regulatory, compliance, and enforcement hurdles confronting senior legal and government relations officers at life insurance companies, as well as product development lawyers and compliance professionals at insurance companies, asset management firms, broker-dealers and investment advisers.
Whether you’re looking to strengthen your expertise or gain a broader understanding of current trends, this conference is tailored to meet your needs.
Join us for our upcoming program, Life Insurance Company Products 2024, either in person or via live webcast on November 7-8, 2024! To learn more about this program and to register for the in-person course or live webcast, click here.
To find our more about ALI CLE’s in-person courses or webcasts, or to check out on-demand CLE, click here.
It is axiomatic that “you can’t get the value right if you get the highest and best use wrong.”1 There may be no more fundamental concept in the valuation of property under the Fifth Amendment’s just compensation clause than that fair market value is determined in light of a property’s highest and best use.2 It is well-established that market value and highest and best use are connected—the market value of a property is the value of the property at its highest and best use.3
This article will explore highest and best use, its analytical definitions, both legal and appraisal, and the evidentiary application to assist in preparing the expert witness for trial.
The Uniform Standards of Professional Appraisal Practice (USPAP) Rule 1-3 provides:
When necessary for credible assignment results in development a market value opinion, an appraiser must … (b) develop an opinion of the highest and best use of the real estate. Comment: An appraiser must analyze the relevant legal physical and economic factors to the extent necessary to support the appraiser’s highest and best use conclusion(s).4
The Appraisal of Real Estate defines highest and best use as “[t]he reasonable probable use of property that results in the highest value.”5
The Dictionary of Real Estate Appraisal has a similar definition:
The reasonably probable and legal use of property that results in the highest value. The four criteria that the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity.6
A thorough analysis of highest and best use issues provides a firm foundation for the appraiser’s opinions and helps the appraiser identify the most likely purchaser for the property in the open market.7 Highest and best use is that reasonable and probable use that supports the highest present value, as defined, as of the effective date of the appraisal.8
The four criteria to determine highest and best use are:
Legal permissibility: Is the proposed use legal under existing zoning or other applicable rules, regulations, and bylaws as of the date of value? If not, is there a reasonable probability of securing legal entitlements (e.g., permits, zoning variances)?
Physical possibility: Can the land physically (size, shape, frontage, access, wetlands) support, sustain, promote, and accommodate the proposed use?
Financial feasibility: Can the land be developed to the use proposed in a financially sound manner? Is the cost associated with achieving the proposed future use (e.g., demolition, site preparation, environmental remediation) reasonably related to the return generated in terms of value (and profit)?
Maximum profitability: Will the proposed use produce the highest economic land value and generate both a return of and a return on the capital invested?9
The tests of physical possibility and legal permissibility must be applied before the tests of financial feasibility and maximum profitability as “[t]here is little to be learned from analyzing the financial feasibility of an illegal, or physically impossible, use.”10
These four tests have the following three essential components: (i) a property’s physical, legal, and locational attributes; (ii) the economic demand for the potential alternative uses of the property; (iii) estimates of the financial rewards for each alternative use.11
Join us in San Diego, CA, in 2025 for ALI CLE’s upcoming program, Eminent Domain and Land Valuation Litigation 2025. Attend in-person or live via webcast on January 30-February 1, 2025. Learn more about the program and stay in touch for program updates here!
Legal Definitions
Legal definitions should be, and are, aligned with appraisal standards. The US Supreme Court has stated the rule as follows: An owner of lands sought to be condemned is entitled to their “market value fairly determined.”12 That value may reflect not only the use to which the property is presently devoted but also that use to which it may be readily converted.13
According to the prevailing holdings in the states, highest and best use is that use of the property, among all those reasonably probable uses, that impacts the reckonings of the willing buyer and seller when arriving at the most probable selling price for a property in a free and open market. Highest and best use is that alternative from among all reasonable alternatives that will bring the highest value return to the owner, taking into consideration site capacity, infrastructure, neighborhood conditions, zoning trends, and data dealing with costs and values. Highest and best use is not restricted to the existing use of the property by the owner at the time of the taking (date of valuation), nor necessarily only those uses allowed as a matter of law (e.g., by zoning). In determining market value, a factfinder may consider all uses to which the property is reasonably adaptable and for which it is (or in all reasonable probability will become) available within the foreseeable future. The probability of a property’s use for all purposes, present and prospective, for which it is either presently adapted and/or to which it might in reason be applied, must be considered. It is the legal, possible, and probable employment that will give the greatest present value to land or realty while preserving its utility. With discounts for likelihood of being realized and for futurity, the values of potential uses of land taken are elements that should be considered in fixing just compensation.14
CLICK HERE to read the full article, which was originally published in ALI CLE’s The Practical Real Estate Lawyer.
To find our more about ALI CLE’s in-person courses or webcasts, or to check out on-demand CLE, click here.
This premier event offers a deep dive into the latest legislative updates, regulatory changes, and best practices for advising benefit plans specific to tax-exempt and governmental employers.
Join us online for a comprehensive exploration of plan provisions, human resources considerations, employment agreements, and plan operations.
Gain invaluable insights from 14 invited representatives from the IRS and Department of Labor, plus expert practitioners, ERISA litigators, and in-house counsel.
SECURE Act 2.0 hot topics, including the new proposed Required Minimum Distribution guidance, mandatory Roth catch-ups, and long-term part-time employees
Executive exit strategies, including non-compete clauses and nondisclosure agreements
EPCRS update
Health and welfare update, including short-term limited duration insurance, HIPAA privacy, MHPAEA, and No Surprises Act implementation
Final guidance on RMDs and strategies to address forfeiture rules changes
Potential impact of the Loper Bright/Relentless decision on creation of rules and regulations as well as in pending litigation, including challenges to DOL guidance on 401(k) plan investing and the definition of a retirement investment fiduciary
DOL exemption projects
Governmental and church plan update
Legislative update
Get a head start on what these and other key legal and regulatory developments and enforcement efforts mean for your employee benefits clients today and well into the future.
If you provide legal counsel and guidance on plan administration for any employer sponsoring an employee benefit plan — particularly 501(c)(3) and governmental employers — you don’t want to miss this annual virtual program.
Register Now! Be fully prepared to navigate both critical developments and future challenges with confidence, and bring value to your clients with your elevated expertise!
