dissenting.
The trial court erred in resolving the parties’ disputes about the Mary Carter agreement in three respects. First, the trial court should have dismissed Edwards from the case, as the settlement rendered plaintiffs claims against him nonjusticiable. Maintaining Edwards in the case distorted the very nature of the trial and substantially prejudiced Key Pharmaceuticals, Inc. (Key) in the process. Second, the trial court should have admitted the redacted agreement itself to inform the jury that Edwards — nominally a defendant — actually had every interest in seeing plaintiff prevail against Key. Third, at the very least, the trial court should have permitted cross-examination of Edwards concerning the nature of the agreement, so that the jury could understand the extent of his bias and interest. The concurrence reaches a contrary conclusion with respect to each of those three matters. I disagree and, on those bases, respectfully dissent.
Before trial, plaintiff, Edwards and Edwards’ss insurer entered into a “Covenant Not-to-Enforce-Judgment and Separate Loan Agreement.” Under the terms of that agreement, Edwards agreed to pay plaintiff $200,000 up front and to loan plaintiff an additional $800,000. Plaintiff agreed not to enforce any judgment against Edwards arising out of the pending claims. He also agreed that, if he obtained judgment against Key in excess of $3 million, he would repay Edwards the $800,000 loan. If plaintiff recovered a smaller amount from Key, the agreement provided for a smaller return of the loaned amount. The agreement is, as the *549concurrence correctly observes, a typical Mary Carter agreement.
Mary Carter agreements are not new, having been a regular feature of the litigation landscape since at least the Florida appellate court decision from which the name was derived in 1967. Booth v. Mary Carter Paint Co., 202 So 2d 8 (Fla Dist Ct App 1967).1 They are, however, quite controversial. From the beginning, they have been subject to criticism that they are champertous, that they mislead juries, promote unethical collusion, and create the potential for an allocation of a larger share of liability to less culpable — but deeper pocketed — defendants, thus frustrating the operation of equitable contribution rules. In particular, courts and commentators around the nation have expressed concern about the effect of Mary Carter agreements on the integrity of the adversarial process.2
Mary Carter agreements create the potential to distort the adversarial process in a number of ways, by virtue of *550their creation of a substantial incentive for the settling defendant to cooperate fully with the plaintiff to shift liability to the remaining defendants, all the while appearing to the jury as a codefendant. The Mary Carter defendant’s cooperation with the plaintiff may take the form of contributing discovery materials to the plaintiff, cooperating during voir dire by using peremptory challenges allocated among the defendants for the benefit of the plaintiff, permitting the settling defendant to be subject to leading direct examination as if the witness were hostile to the plaintiff, providing the plaintiff with essentially two opportunities to cross-examine the defendants’ witnesses, and permitting the plaintiff to reap the benefit of additional argument in support of his or her cause. After engaging in the support of the plaintiffs efforts, Mary Carter defendants often then will be dismissed from the case, further demonstrating the essentially sham nature of their participation in the trial.
Because of such problems, some courts have declared that Mary Carter agreements simply are void as against public policy. In Elbaor v. Smith, 845 SW2d 240, 250 (Tex 1992), for example, the Supreme Court of Texas held that such agreements are per se invalid:
“Remedial measures cannot overcome nor sufficiently alleviate the malignant effects that Mary Carter agreements inflict upon our adversarial system. No persuasive public policy justifies them, and they are not legitimized simply because this practice may continue in the absence of these agreements. The Mary Carter agreement is simply an unwise and champertous device that has failed to achieve its intended purpose.”
Id. at 249. The Nevada Supreme Court reached the same conclusion, but by the rationale that Mary Carter agreements are essentially champertous, because they permit a person not a party to the lawsuit to retain a financial interest in its outcome. Lum v. Stinnett, 488 P2d 347, 351 (Nev 1971). See also Dosdourian v. Carsten, 624 So 2d 241, 243-46 (Fla 1993) (“We are convinced that the only effective way to eliminate the sinister influence of Mary Carter agreements is to outlaw their use.”); In re Guardianship of Babb, 642 NE2d 1195, *5511204-07 (Ill 1994) (Mary Carter agreements violate contribution statute); Trampe, 252 NW at 678 (undisclosed agreement “clearly imposed a fictitious suit upon the court” resulting “in the trial of issues which were not real”).
Other courts have concluded that Maxy Carter agreements are void unless the settling defendant is dismissed from the lawsuit or realigned as a plaintiff. The Oklahoma Supreme Court, for example, has held that:
“If the agreement does not absolutely settle the conflict, but rather hinges on the amount of the verdict [against non-settling defendants], the trial court should review the circumstances of the agreement and either hold that portion of the agreement granting agreeing defendant an interest in a large plaintiffs verdict unenforceable as against public policy, or dismiss the agreeing defendant from the suit. In no circumstances should a defendant who will profit from a large plaintiffs verdict be allowed to remain in the suit as an ostensible defendant.”
Cox v. Kelsey-Hayes Co., 594 P2d 354, 359 (Okla 1978) (emphasis in original).
Still others have held that, because of the potential for variation in the exact terms of Mary Carter agreements and in their effect on the litigation process, their validity must be examined on a case-by-case basis. The California Supreme Court’s decision in Abbott Ford, Inc. v. Superior Court, 741 P2d 124, 132 (Cal 1987) (en banc) is illustrative:
“[A] broad ruling on the inherent validity or invalidity of sliding scale agreements ‘in general’ is inappropriate because such agreements may have a variety of effects at different stages of the litigation process — discovery, settlement, trial or appeal. The potential problems posed by a particular provision in such an agreement may call for one remedy — e.g., disclosure of the agreement to the nonagreeing parties or to the jury — in one context, and another remedy — e.g., invalidation of a specific provision, or the agreement as a whole — in a different context. Thus, analysis requires close attention to the specific provisions of the agreement itself, the factual setting in which the agreement is entered into, and the agreement’s effect on the particular aspect of the judicial process at issue.”
*552A majority of those courts addressing the matter have held, guardedly, that Mary Carter agreements are not invalid per se. As the Maryland Court of Appeals observed, “Nearly every court which has considered the matter has recognized that agreements such as that in the case at bar have a potential for skewing the posture of the trial[.]” General Motors Corp. v. Lahocki, 410 A2d 1039, 1046 (Md 1980). In recognition of the distortive effects of the agreements, a majority of the courts hold that the agreements are subject to disclosure to the parties, to the court, and to the jury. Bohna v. Hughes, Thorsness, Gantz, et al., 828 P2d 745, 757 n 30 (Alaska 1992) (juries should be informed when settlements change the normal interests of a party); Sequoia Mfg. Co., Inc. v. Halec Const. Co., 570 P2d 782, 792-95 (Ariz Ct App 1977) (agreement must be disclosed to the court and remaining parties at the earliest opportunity; trial court has discretion to present the agreement to the jury); Firestone Tire & Rubber Co. v. Little, 639 SW2d 726, 728 (Ark 1982) (agreement must be disclosed to the nonagreeing party and may be admitted into evidence); Gatto v. Walgreen Drug Company, 337 NE2d 23, 29 (Ill 1975), cert den sub nom Gatto, Administrator v. Calumet Flexicore Corp. et al., 425 US 936 (1975) (settlement agreement must be disclosed to the court and opposing parties; disclosure to the jury might protect the integrity of the proceedings); Ratterree v. Bartlett, 707 P2d 1063, 1074-76 (Kan 1985) (agreement must be disclosed to court, and the general terms of the financial interest of a settling defendant in the outcome of the case should be disclosed to the jury); Lahocki, 410 A2d at 1046-47 (agreement must be disclosed to the court and opposing parties and admitted into evidence, unless there is danger of self-serving statements, in which case a statement of the terms of the settlement must be presented to the jury); Johnson v. Moberg, 334 NW2d 411, 415 (Minn 1983) (agreement must be disclosed promptly to court and remaining parties); Hegarty v. Campbell Soup Co., 335 NW2d 758, 765 (Neb 1983) (agreement must be disclosed upon proper motion and admitted into evidence); Cox, 594 P2d at 360 (pretrial agreement must be disclosed, and trial court erred in not admitting at least part of agreement into evidence); Hatfield v. Continental Imports, Inc., 610 A2d 446, 451-52 (Pa 1992) (agreement or at least the existence of the reason for the potential bias must be conveyed to the jury); *553Poston by Poston v. Barnes, 363 SE2d 888, 890 (SC 1987) (agreement must be disclosed to the jury); Corn Exchange Bank v. Tri-State Livestock, 368 NW2d 596, 600 (SD 1985) (if an agreeing defendant stands to gain financially from a plaintiffs verdict, jury must be informed of the contents of the agreement); Slusher v. Ospital by Ospital, 777 P2d 437, 444 (Utah 1989) (agreement must be disclosed to court and parties, then court should disclose the existence and basic contents of agreement to jury, which may include admission of the agreement into evidence); State ex rel Vapor Corp. v. Narick, 320 SE2d 345, 348 (W Va 1984) (agreement must be promptly disclosed to court and opposing counsel so that trial court can decide whether agreement is valid and determine what measures should be taken to insure that the nonsettling party will not be prejudiced).
Oregon stands with the majority. In Grillo v. Burke’s Paint Co., 275 Or 421, 551 P2d 449 (1976), the court acknowledged the criticisms of Mary Carter agreements in general— that they “distort[] the relationship between plaintiffs and defendants, resulting in a non-adversary and possibly collusive proceeding[.]” Id. at 426. The court also noted that
“the majority of jurisdictions which have considered this question do not condemn the agreements as invalid per se but instead require that the agreements be subject to pretrial discovery procedure and be admissible into evidence on request of any non-settling defendant.”
Id. After reviewing those decisions, the court expressly aligned itself with them and concluded that, although the Mary Carter agreement in that case was not per se invalid, “it would have been subject to pretrial discovery and, upon request of [the] defendant, would have been admissible in evidence.” Id. at 427.
My point in setting forth a summary of the case law is this: It is well-nigh universally recognized that Mary Carter agreements are dangerous. Even in jurisdictions declining to rule on the validity of the agreements per se, courts are careful to explain that parties, the court, and jurors should be fully informed of the agreements to avoid the distorting effects that they commonly have upon the adversarial process.
*554With that in mind, I turn to the manner in which the agreement was handled in this case. There is no question that plaintiff informed Key of the existence of the Mary Carter agreement and provided Key with a copy of it. Key then moved to have the agreement itself admitted into evidence, citing Grillo. The trial court acknowledged Grillo and its holding that Mary Carter agreements are admissible upon request. The court nevertheless denied Key’s motion on the ground that Grillo had been implicitly limited by a subsequent decision of the Oregon Supreme Court, Holger v. Irish, 316 Or 402, 851 P2d 1122 (1993). The trial court characterized the Holger decision as holding that, unless there is an overriding or compelling reason, the jury is not to be told that there has been a settlement.” The trial court, however, did agree to deliver a preliminary statement to the jury pool very briefly summarizing the agreement as follows:
“The settlement agreement contains a schedule for repayment, however, to Dr. Edwards by the plaintiff if the plaintiff is awarded a verdict against the defendant Key Pharmaceuticals Company. So there is that relationship that you need to be aware of, but the jury that is selected in this case is to consider the fact of the settlement only as it might bear on the issue of credibility or believability of the witnesses who testify, and it is not to be considered in any way in determining the amount of the verdict or damages, if any, that the jury should award at the end of the case.”
Key also moved to dismiss Edwards from the case. According to Key, because of the settlement agreement, Edwards no longer stood in an adversarial relationship with respect to plaintiff, and plaintiffs claims against him were nonjusticiable. Key complained that, by virtue of his remaining in the case in the posture of a defendant, Edwards would prejudice its ability to obtain a fair trial, among other things, by unfairly consuming peremptory challenges ostensibly allocated to the defense, by permitting plaintiff to conduct direct examination of Edwards by leading questions as if he were a hostile witness, and by effectively awarding plaintiff the strategic advantage of having additional objections, argument, and cross-examination. The trial court denied the motions.
*555At trial, Edwards in fact participated as a “stealth plaintiff.” He participated in jury voir dire3 opening statement and examination of witnesses ostensibly as a defendant, but in reality as a coplaintiff. For example, plaintiff was permitted to call Edwards as a “hostile” witness, and conducted the direct examination by extensive leading questions as to Edwards’s own blamelessness and Key’s culpability. When Key attempted to cross-examine Edwards about the true nature of his interest in the litigation, the trial court precluded Key from pursuing the matter. When Key asked Edwards if he had “exposure in this case, at all,” the trial court sustained plaintiffs objection, commenting only: “There is financial exposure. Sustained.” Key asked: “Can I explore that, your honor?” The trial court said, “No, you may not.” Then, at the end of trial — and true to the pattern of Mary Carter cases — plaintiff voluntarily dismissed Edwards from the case. The trial court informed the jury only that:
“[P]laintiff s claims against Dr. Edwards have been withdrawn and you are not to concern — you are not to concern yourself with any reasons about why the court has withdrawn those allegations.”
In its instructions to the jury, the court ultimately gave a slightly more complete summary of the Mary Carter agreement:
“Under the terms of the agreement, defendants Dr. Edwards and the Clinic paid a certain amount of money to Plaintiff. In return, Plaintiff agreed not to enforce any judgment that might be entered in this lawsuit against Dr. Edwards or the Eugene Clinic.
“* * * * *
“All or none or a portion of the money paid by Dr. Edwards and the Clinic to Plaintiff will be repaid, depending upon the amount of any recovery that Plaintiff obtains from the non-agreeing defendants.”
*556The first of the trial court’s mistakes with respect to the Mary Carter agreement was its denial of Key’s motion to dismiss plaintiffs claims against Edwards on the ground that they no longer presented a justiciable controversy. As the Supreme Court explained in Brumnett v. PSRB, 315 Or 402, 405, 848 P2d 1194 (1993), a justiciable controversy exists when “the interests of the parties to the action are adverse” and “the court’s decision in the matter will have some practical effect on the rights of the parties to the controversy.” In this case, Edwards and plaintiff settled their differences and completely realigned their interests. If plaintiff established at trial that Edwards was negligent, the percentage of fault that the jury assigned to Edwards would only lessen any recovery from Key. Thus, plaintiffs sole objective at trial was to establish Key’s — not Edwards’s — liability. Similarly, Edwards’s only interest at trial was in establishing Key’s liability, for if the jury awarded more than $3 million against Key, Edwards stood to reap the return of $800,000 from plaintiff. That this complete coincidence of interests existed is nowhere better illustrated than in plaintiffs direct examination of Edwards. Called as an adverse witness, Edwards was not subjected to a single adverse question. The entire focus of the supposedly hostile examination was the culpability of Key, not of Edwards. The fact that plaintiff had no real interest in pursuing a verdict against Edwards — and, indeed, had every interest in preventing the jury from finding against Edwards and thus threatening the potential recovery from Key — is further borne out by the fact that, at the close of the evidence, plaintiff dismissed Edwards from the case.4 Plaintiff and Edwards were not, in any sense of the term, adverse, and their alignment as plaintiff and defendant was completely illusory.
The concurrence insists that the case against Edwards was justiciable, because the complaint alleges that the parties are adverse and because a jury verdict against *557Edwards hypothetically could have affected his liability to plaintiff. As to the first assertion, the concurrence is simply incorrect. Parties cannot create adversity by declaration when there is none in reality. In Oregon Medical Association v. Rawls, 281 Or 293, 295, 574 P2d 1103 (1978), for example, the plaintiff and the defendant sought a declaratory judgment as to the constitutionality of a statute. The complaint listed the parties as adverse, but they took identical positions as to the constitutionality of the challenged law. On its own motion, the Supreme Court dismissed the appeal, because the parties, in fact, were not adverse concerning the issue before the court. Id. at 299.
As to the second assertion, the concurrence certainly is correct that it is hypothetically possible for a jury verdict against Edwards to have affected Edwards’s ultimate liability to plaintiff. The jury — at least before Edwards was dismissed — conceivably could have awarded $3 million in damages but allocated some portion of fault to Edwards. In that event, the verdict against Key would have been insufficient to trigger plaintiffs obligation to return some or all of the $800,000 loan to Edwards. I think it is debatable whether such a hypothetical contingency is sufficient to satisfy the requirements of justiciability. Courts in other jurisdictions have questioned whether a case is justiciable when a Mary Carter agreement has determined the limits of the settling defendant’s liability. See, e.g., Shelby v. Keck, 541 P2d 365, 370 (Wash 1975) (en banc); Schell v. Albrecht, 383 NE2d 15, 17-19 (Ill App Ct 1978). The concurrence fairly relies on dictum in Stephens v. Bohlman, 138 Or App 381, 385, 909 P2d 208, rev dismissed 324 Or 177, 925 P2d 907 (1996), for a contrary conclusion. We do not have to resolve that matter, however, because the two requirements of justiciability are conjunctive. Thus, whether or not a jury verdict hypothetically could have affected Edwards’s liability, the fact remains that plaintiff and Edwards were not adverse, and the justiciability of plaintiffs claims against Edwards fail on that ground alone.
The concurrence suggests that, even if the claims against Edwards were not justiciable, any error was harmless, because Edwards had asserted a cross-claim against Key and would have remained in the case in any event. Of *558course, the concurrence glosses over the fact that it was Edwards’s status as a named defendant that permitted him to maintain the cross-claim in the first place. Indeed, the Mary Carter agreement itself recites that one reason for the agreement was to allow Edwards to pursue a cross-claim against defendant. If plaintiffs claim against Edwards had been dismissed, as it should have been at the beginning of trial, then Edwards would have been required to file a separate claim against Key and then move for consolidation of the two separate actions. Whether the trial court would have granted such a motion is pure speculation, and such speculation cannot form the basis for establishing the justiciability of a controversy. Brumnett, 315 Or at 406-07.
Aside from that, the concurrence misses the point as to the nature of the harm that flowed from failing to dismiss the claim against Edwards. The point is not that Edwards remained in the trial, but that he remained in the trial as a defendant, with all the advantageous consequences as to tactics, voir dire, witness examination, and argument that such alignment affords. To be sure, the harm that flowed from the misalignment of the parties is most clear with respect to plaintiffs case against Key. Plaintiff was allowed to try much of his case through Edwards, whose nominal status as a defendant conferred benefits on plaintiff that he otherwise would not have enjoyed. But that misalignment infected Edwards’s cross-claim against Key, as well. The concurrence, in fact, concedes that the same procedural advantages that plaintiff obtained from the Mary Carter agreement inured to Edwards on his cross-claim. 158 Or App at 528. In my view, the trial court should have dismissed plaintiffs claims against Edwards at the beginning of trial, and I would reverse on that basis alone.
The trial court’s second mistake with respect to the Mary Carter agreement was its failure to admit the agreement itself into evidence. Key asked that the agreement be admitted to show Edwards’s bias and interest in the outcome, and for the purpose of impeachment on his claim damages for emotional distress arising out of the filing of plaintiffs lawsuit against him. Key contended that the Mary Carter agreement — which was negotiated before the filing of the lawsuit and which expressly advised Edwards that plaintiff would be *559filing claims against him — demonstrated Edwards’s lack of credibility as to his emotional distress.
Grillo plainly requires the admission of the agreement itself. The Supreme Court clearly held that the agreement is “admissible in evidence.” Grillo, 275 Or at 427. A blenderized summary of such agreements is not something that may be admitted “in evidence.” Nor is anything in Holger to the contrary. In that case, the Supreme Court said nothing about Mary Carter agreements or about its earlier decision in Grillo. The court held merely that, under OEC 408, “evidence of a compromise is not admissible unless it is offered for a purpose having independent relevance.” Holger, 316 Or at 414 (emphasis added). Mary Carter agreements always are independently relevant, given the fact that they are direct evidence of the settling defendant’s substantial interest in seeing the plaintiff prevail, notwithstanding that defendant’s alignment as a nominal defendant. OEC 408, in fact, expressly provides that evidence of compromise or offers of compromise is admissible “when the evidence is offered for another purpose, such as proving bias or prejudice of a witness.” Thus, there is no “tension” between the two decisions, as the trial court and the concurrence suggest.
Even assuming, for the sake of argument, that a summary of the contents of a Mary Carter agreement could suffice under Grillo, the fact remains that the summary the court gave in this case was inadequate. Before trial, all that the court told the jury was that there was a settlement, which contained a “schedule of repayment * * * if the plaintiff is awarded a verdict against the defendant Key Pharmaceuticals Company,” and that there was, as a result, a “relationship that you need to be aware of.” I fail to see how that abbreviated — and inaccurate — summary provided the jury sufficient information about the nature of the terms of the agreement to enable it to appreciate fully the extent to which Edwards’s interests were aligned with plaintiffs.
I note that not even the concurrence suggests that the preliminary instruction sufficed. The concurrence maintains that any deficiencies in the initial overview of the agreement were remedied by the court’s more detailed, post-trial instruction to the jury. I respectfully disagree. To begin *560with, I find the trial court’s subsequent instruction to the jury only slightly more detailed than the initial one. In any event, whatever the merits of the post-trial instruction, the point is that, at that juncture, the damage was done, and the instruction was pointless. The purpose of the majority rule to which the court in Grillo adhered is to provide the jury full disclosure of the true relationship of the parties during the trial, so that the jury can evaluate the evidence as it is offered in the light of the bias that the Mary Carter agreements typically reveal. In this case, by the time the court delivered the post-trial instruction on which the majority relies, Edwards already had exercised his peremptories in voir dire, already had been subject to leading direct testimony in the guise of “hostile” examination by plaintiff, and already had been protected from cross-examination on the nature and extent of his bias in favor of plaintiff. The post-trial instruction was simply too little, too late.
The concurrence alternatively complains that, because the Mary Carter agreement contains references to Edwards’s insurance carrier, it would have been improper for the trial court to have admitted the entire agreement into evidence. In my view, the observation is somewhat beside the point. No one raised that argument at trial5 and — particularly given that the matter easily could have been remedied by redaction had plaintiff or Edwards raised the issue — I think it is inappropriate for us to dispose of Key’s arguments on appeal on that ground. Aside from that, I think it is fairly debatable whether the mention of insurance in this context is so clearly inappropriate as the concurrence assumes. OEC 411(1) provides that evidence of liability insurance is not admissible “upon the issue whether the person acted negligently or otherwise wrongfully.” That is not the purpose for which the Mary Carter agreement was offered. It was instead *561offered as evidence of bias and pecuniary interest in the outcome, and OEC 411(2) expressly permits evidence of insurance to show “bias, prejudice or motive of a witness.”
In short, the Mary Carter agreement itself was admissible. It was relevant to the issue of Edwards’s bias and interest. The trial court’s sole justification for excluding the document — its reading of the Holger decision — was incorrect.
The trial court’s final mistake concerning the Mary Carter agreement was its refusal to allow Key to cross-examine Edwards concerning his interest in seeing plaintiff prevail, notwithstanding his alignment as a codefendant and his direct examination as an ostensibly adverse witness. OEC 609-1 provides that “[t]he credibility of a witness may be attacked by evidence * * * showing bias or interest.” Consistent with that rule is the familiar refrain in the case law that “ ‘[i]t is always permissible to show the interest or bias of an adverse witness.’ ” State v. Hubbard, 297 Or 789, 796, 688 P2d 1311 (1984) (quoting Clevenger v. Schallhorn, 205 Or 209, 215, 286 P2d 651 (1955)). That is not to say that parties have unlimited leeway in establishing the bias or interest of adverse witnesses. As the Supreme Court explained in Hubbard, the trial courts have some discretion in limiting the extent of the inquiry. 297 Or at 798. That discretion itself, however, is subject to limits:
“The discretion of the trial judge to exclude evidence relevant to bias or interest only obtains once sufficient facts have been established from which the jury may infer that bias or interest. Typically, this would require wide latitude be given to the cross-examiner to ask and receive answers to questions sufficient to demonstrate to the jury the nature of the bias or interest of the witness.”
Id.
In this case, the trial court did not merely limit Key’s inquiry into the evidence establishing the nature and extent of Edwards’s bias. The court precluded such inquiry altogether. The transcript reveals the following colloquy:
“Q. (by Mr. Gamier, for Key): Is it your view that by virtue of the agreement that you have entered into with the *562plaintiff in this case you have any financial exposure of the outcome of this case?
“Mr. Holland (for Edwards): Your honor, I object. That flies in the face of the court’s ruling.
“The Court: Objection overruled.
“A. You’re asking if I have an understanding that I have financial exposure in this case?
“Q. Yes, sir.
“A. Yes, I do.
“Q. And you do not have such exposure in this case at all, do you, sir?
“Mr. Holland: I object.
“The Court: Sustained. There is financial exposure. Sustained.
“Mr. Gamier: Can I explore that, your honor?
“The Court: No, you may not.”
Thus, not a single question was permitted as to the facts revealing Edwards’s bias in this case. Under OEC 609 and Hubbard, that was reversible error.
The concurrence concludes that the trial court did not abuse its discretion in ruling on the objections to the cross-examination of Edwards because it allowed Key at least some inquiry into the fact of Edwards’s financial exposure. I disagree. The sole question that the court allowed Edwards to answer was whether he had an understanding as to whether he had any financial exposure in the case. I submit that permitting that single question as to Edwards’s understanding of the consequences of his agreement is not what the Supreme Court had in mind in requiring “wide latitude * * * to ask and receive answers to questions sufficient to demonstrate to the jury the nature of the bias or interest of the witness.” Hubbard, 297 Or at 798.
The concurrence contends that its review of the matter is hampered by Key’s failure to make an offer of proof as to what exactly it intended to ask Edwards, and that the only arguably preserved contention is that Key should have been *563allowed to inquire about the amount of Edwards’s financial stake in the outcome of the trial. It is true that Key did not make an offer of proof. But in light of the record of this case, I find that no great impediment.
OEC 103(1)(b) provides that an offer of proof is unnecessary when “the substance of the evidence [sought to be admitted] was made known to the court by offer or was apparent from the context within which questions were asked.” That is the case here. Key’s arguments in support of its efforts to get the Mary Carter agreement before the jury were voluminous in the extreme. Key raised the matter of admitting the agreement and permitting cross-examination on it before trial, during trial, and during cross-examination of Edwards. The parties actively debated the extent to which Key should be permitted to examine Edwards concerning his relationship to plaintiff in light of the agreement, and the court acknowledged in its comments during the cross-examination of Edwards both the scope of Key’s intended cross-examination and the fact that its prior ruling on the admissibility of the agreement “ties your hands pretty substantially in terms of cross examination.” In Davis v. O’Brien, 320 Or 729, 737, 891 P2d 1307 (1995), the Supreme Court held that pretrial contentions may be sufficient to preserve an error for appeal where the contentions were “presented clearly to the initial tribunal” and the “parties are not taken by surprise, misled, or denied opportunities” to meet the contentions. In light of the hundreds of pages of briefing and argument on the Mary Carter issues in this case, I find it impossible to believe that anyone was caught off guard as to Key’s intentions concerning its cross-examination of Edwards.
Even assuming, for the sake of argument, that the only matter that Key preserved was whether it could inquire into the amount of Edwards’s interests in the outcome of the case, I still conclude that the trial court erred in excluding the cross-examination. The amount of Edwards’s interest is directly relevant to the nature and extent of his bias. Parties routinely are allowed to examine expert witnesses as to the amount of their compensation to establish their bias. State v. Brown, 299 Or 143, 150, 699 P2d 1122 (1985) (amount of expert witness fees relevant to show bias). See also Laird C. *564Kirkpatrick, Oregon Evidence, 362 (3d ed 1996) (“Generally, the pecuniary interest of an expert witness and any bias of the expert in favor of the calling party can always be shown.”). I can envision no good reason to treat other witnesses differently.
The concurrence attempts to bolster its assessment of the trial court’s ruling by reference to OEC 403, reasoning that the trial court’s decision represents a sound effort to exclude unduly prejudicial information that was only of “marginal value” in establishing Edwards’s bias. To begin with, no party at trial or on appeal made an argument in support of the trial court under OEC 403. Aside from that, I disagree with the concurrence’s evaluation of the amount of Edwards’s direct pecuniary interest in the outcome of the trial. I think the jury would have been very interested to know that he stood to gain $800,000 if plaintiff recovered a sufficient verdict against Key, and I daresay that might have had something to do with the vigor with which plaintiff and Edwards attempted to exclude any reference to that fact from the jury’s knowledge. Further, I do not understand how the disclosure of the amount of Edwards’s financial interest in the outcome of the trial would be unduly prejudicial. The fact is that Edwards had a substantial financial stake in the outcome of the trial. That clearly is relevant. OEC 609. The concurrence suggests that the jury could have been “distracted or confused.” I do not understand why. The point of the cross-examination is simple and straightforward: If the jury returns a verdict against Key of over $3 million, Edwards reaps the return of $800,000 from plaintiff. I do not see what is the least bit confusing about that.
In short, the trial court erred in its handling of the Mary Carter agreement in three ways. Each of the court’s errors substantially prejudiced Key, and each would justify reversal. The concurrence errs in concluding otherwise.
Deits, C. J., and Warren, J., join in this dissenting opinion.Actually, such agreements date back further than that. In Trampe v. Wisconsin Telephone Co., 252 NW 675, 678 (Wis 1934), an agreement that would today be labeled a Mary Carter agreement was declared invalid more than 30 years before the Mary Carter Paint Co. decision.
In Arizona, such agreements are called “Gallagher” agreements, after City of Tucson v. Gallagher, 493 P2d 1197 (Ariz 1972) (en banc). See Abigail Carson, Note, Are Gallagher Covenants Unethical?: An Analysis Under the Code of Professional Responsibility, 19 Ariz L Rev 863 (1977); Charles W. Lowe, Comment, Gallagher Covenants, Mary Carter Agreements, and Loan Receipt Agreements: Unsettling Contributions to Conflict Resolution, 1977 Ariz St LJ 117.
A substantial number of commentators have criticized Mary Carter agreements on these and other grounds. See, e.g., Robin Renee Green, Comment, Mary Carter Agreements: The Unsolved Evidentiary Problems in Texas, 40 Baylor L Rev 449 (1988); John E. Benedict, Note, It’s a Mistake to Tolerate the Mary Carter Agreement, 87 Colum L Rev 368 (1987); Richard Casner, Note, Admission into Evidence of a Mary Carter Agreement from a Prior Trial is Harmful Error, 18 Tex Tech L Rev 997 (1987); June F. Entman, Mary Carter Agreements: An Assessment of Attempted Solutions, 38 U Fla L Rev 521 (1986); Katherine Gay, Note, Mary Carter in Arkansas: Settlements, Secret Agreements, and Some Serious Problems, 36 Ark L Rev 570 (1983); David R. Miller, Comment, Mary Carter Agreements: Unfair and Unnecessary, 32 Sw LJ 779 (1978); Meriwether D. Williams, Comment, Blending Mary Carter’s Colors: A Tainted Covenant, 12 Gonz L Rev 266 (1977); John Edward Herndon, Jr., Note, “Mary Carter” Limitation on Liability Agreements Between Adversary Parties: A Painted Lady Is Exposed, 28 U Miami L Rev 988 (1974); David Jonathan Grant, Note, The Mary Carter Agreement — Solving the Problems of Collusive Settlements in Joint Tort Actions, 47 S Cal L Rev 1393 (1974).
At voir dire, the trial court allowed plaintiff two peremptory challenges, Edwards two peremptory challenges, and Key three. There was discussion of requiring Edwards and plaintiff to share peremptory challenges, but plaintiff complained that he didn’t “want to be put in a position where we’re having to confer with counsel for Dr. Edwards in front of the jury.”
Additional evidence of the identity of interests is Edwards’s motion in limine requesting an order precluding any reference to advice he obtained from plaintiffs lawyers. According to Edwards, the “primary common interest” that he shared with plaintiff “in establishing liability to Plaintiff of the non-agreeing defendants” should have cloaked any conversations he had with plaintiffs lawyers with the protections of the attorney-client privilege.
Before trial, Edwards moved for an order prohibiting any reference to liability insurance at trial. The trial court granted the motion. Key then asked whether the court’s ruling applied to the Mary Carter agreement, the admissibility of which had not yet been determined. The court agreed with Key’s suggestion that that matter should be taken up later, when the motions relating to the Mary Carter agreement were addressed directly. So far as I can tell, at no time did plaintiff or Edwards argue that the Mary Carter agreement should be redacted of any references to Edwards’s insurance carrier.