SAN FRANCISCO — A psychologist who testified that a defendant was not competent to stand trial in a federal criminal case against a leading class action law firm now says that assertion was mistaken.

Prosecutors have argued that a finding of incompetence on the part of the defendant, Seymour Lazar, 79, would mean that he would be automatically placed in the custody of the attorney general for hospital care, an outcome his lawyers seem eager to avoid.

“I believe that I testified in error when I stated that he is not competent,” the psychologist retained by the defense, William Jones, wrote in a declaration filed Monday in federal court in Los Angeles.

Mr. Lazar, a former entertainment lawyer who served or arranged for his family members to serve as named plaintiffs in about 50 securities lawsuits, was charged as a co-defendant in a federal fraud and racketeering conspiracy indictment returned a year ago. Also charged were the law firm that filed the suits, Milberg Weiss Bershad & Schulman, and two of the firm’s senior partners, David Bershad and Steven Schulman.

The indictment charged, in essence, that Milberg Weiss committed fraud by secretly paying Mr. Lazar and others who helped the firm file suits quickly when a stock declined. All the defendants have pleaded not guilty.

Mr. Lazar’s defense has moved to dismiss the charges against him on the grounds that his health has deteriorated, as the trial in the case was delayed since he was first charged in an related indictment filed in June 2005. Last week, Judge John Walter held a hearing where Mr. Jones and a series of medical doctors held forth about the impact of a series of ailments said to have afflicted Mr. Lazar, including heart disease, stroke, lymphoma, diabetes, hypertension, gout, depression, memory loss, and an obstruction of his carotid artery.

As expected, the defense witnesses said his condition was much worse, while the prosecution said there was no empirical evidence of deterioration. However, during cross-examination by the prosecution, Mr. Jones said it was also his opinion that Mr. Lazar was mentally incompetent.

On hearing that testimony, Judge Walter immediately ordered both sides to file briefs on whether an independent expert should be chosen to examine Mr. Lazar’s fitness for trial.

The defense said in its response Monday that it was “surprised” by Mr. Jones’s assertion and that it was “outside the scope of that expert’s qualifications.”

Mr. Jones, who is a licensed psychologist and holds a doctorate from the University of Michigan, said he went too far in declaring Mr. Lazar incompetent and did not do the full battery of tests needed to address that issue. “I never considered the federal legal standard for competency. Rather, I was simply stating that, in my opinion, Seymour Lazar should not have to stand trial because of the burdens that are likely to be imposed by his impairments,” the psychologist wrote.

Federal law dictates that a defendant found mentally unfit be placed in federal custody for up to four months to determine whether he or she might become fit in the future. “It looks to me like there isn’t any option,” a psychiatrist who studies legal competency issues, Douglas Mossman of Wright State University in Dayton, Ohio, said. “It’s possible for a person to have physical problems that manifest themselves as a mental impairment that leaves them incompetent to stand trial.”

The competency statute does not address directly a person who might be physically unable to stand trial or whose medical condition could worsen because of a trial. Mr. Lazar’s doctors claim he might suffer a cerebral hemorrhage or stroke from the strains of the trial.

The dispute over Mr. Lazar’s health is unlikely to derail the trial for the other defendants, which is currently set for January 2008.