The Binding Power of a Testifying Corporate Representative

By Slater Elza

In a lawsuit, the governing rules of procedure allow your opponent to essentially take your company’s deposition.  Opposing counsel is permitted to give your company a list of topics and require the company to designate one or more persons who will provide sworn testimony on each of those topics. This representative represents the corporation, and the corporation is bound by such testimony.

A company will have difficulty avoiding the sworn testimony of its designated corporate representative. When a corporation produces an employee, it represents that the employee has the authority to speak on behalf of the corporation with respect to the areas within the notice of deposition. The corporate representative testifies as a representative of the entity, his answers bind the entity, and he is responsible for providing all the relevant information known or reasonably available to the entity. This type of deposition is not used to discover the witness’s personal knowledge. Instead, the representative presents the entity’s “positions” in the lawsuit.

Such witness can testify as to the entity’s legal and factual positions. Likewise, it is appropriate for the corporate representative to be asked about the company’s contentions and subjective beliefs and opinions related to the lawsuit. In fact, the representative may be asked to clarify the basis for or scope of the company’s legal claims. To hold otherwise would lead to a result where entities could avoid ever being asked about their positions and contentions in a lawsuit.

A corporate representative’s testimony also constitutes binding judicial admissions on behalf of the company. Admissions during these depositions which are deliberate, clear, and unequivocal constitute binding judicial admissions. Once such testimony is given, the company cannot later contradict such testimony. Because of the binding power of a corporate representative, it is imperative that companies choose the best person to testify and spend the time and resources necessary to prepare them for the deposition.  The stakes are far too high to risk sabotaging your lawsuit by choosing the wrong representative or not properly preparing them.