Selection and Utilization of Expert Witnesses in Business Disputes

The involvement of expert witnesses in business litigation can mean the difference between winning and losing. The resolution of liability in a vast array of issues through attorney settlement discussions, ADR, arbitration or trial is often dependent on the input and credibility of the experts representing the contending parties.

An important initial decision for the attorney in these cases is early selection of the proper expert or experts. Always assume your opponent will select an expert with outstanding academic credentials and strong experience because these two factors give the expert immediate credibility. It is incumbent upon you to make an early judgment whether to utilize experts with credibility equal to your opponent.

By making an early selection of a credible expert, you can avoid the situation reflected in the following excerpt from the decision of a trial court judge in which the author represented the Petitioner:

At this point it is important to note that the Respondent tendered Mr. X as an expert in the valuation of the parties' interest in some of the business ventures. Mr. X demonstrated very clearly that his valuations were essentially worthless. On direct examination he led the court to believe that he had made an independent survey or investigation of cattle experts to determine values, ratios, formulas and other judgments. Upon cross examination it appears that these 'experts' were the Respondent and Respondent's attorney's representations of what Petitioner's experts had said. He also relied upon experts from Oregon State University. This sounded good until it was finally noted that the OSU expert was a 5 page memo from October 1979 issued by the Extension Service.

To exacerbate a bad situation Mr. X tendered his expert valuation without seeing (or asking for) any financial information on the operations of the business. If any of Mr. X's valuations happen to be correct it would seem to be pure accident.

On the other hand, Petitioner tendered several experts on the value of the parties' business interests. Ralph Arnold, who is a member of the American Society of Appraisers, is a Senior Evaluation Analyst, has been in the profession 13 or 14 years and has had clients in the cattle business and even the genetic engineering field.

Richard Tietze, appeared to have the most 'hands on' experience of anyone. As a former Vice President of the Northwest Production Credit Association he supervised a loan portfolio in excess of $100 million. He spent time on the property here assessing the cattle as he'd done countless times before evaluating collateral for the Credit Association.

The high standing of Petitioner's experts and the apparent incompetency of Respondent's expert lead the Court toward adoption of Petitioner's Trial Memorandum valuations for the cows (stipulated to) and the parties' business interests. In addition, what the experts opined made sense even under cross examination. The remainder of the evidence preponderates in favor of the Petitioner's Values as well.

The county, judge and Mr. X will remain anonymous for obvious reasons.

The remainder of this article offers suggestions on how to utilize your expert(s) to win at settlement negotiation, ADR, arbitration, or trial.

Selecting an Expert

An expert's prior trial experience and familiarity with the judicial process is crucial. Contact other attorneys experienced in the field who have used or cross examined the potential expert and ask for their opinions. Obtain the expert's resume and list of previous cases. Interview experts being considered. Remember, experts are a crucial part of the team and there must be a positive rapport. Always involve the client in expert selection and obtain the client's approval. It is important for the client to have confidence in the expert, especially when the evaluation is higher or lower than expected, or if there is a poor result.

The Expert Must Do a Thorough Job

Once selected, the expert must be given all existing information. This includes, for example, financial statements, tax returns, loan applications, operating statements for real estate projects, previous appraisals, reports of other experts, deposition transcripts, copies of pleadings, and all other material no matter how marginally relevant it may initially appear. Do not shy away from providing the expert information damaging to your case or contrary to his or her opinion. All professional studies and academic papers relevant to the inquiry should be obtained and reviewed.

After reviewing existing information, the expert should conduct his own investigation. Are there tests or studies which could be conducted which may provide important new information or confirm critical existing information? Have adequate physical inspections occurred? Are there witnesses who should be interviewed by the expert? Are there analyses which should be made? It is the attorney's responsibility to find out from the expert what additional information would be helpful to the expert and then obtain that information. It is critical that the expert be given sufficient time to complete the most thorough analysis possible. It is important for the expert to consider all facts before forming his/her opinion and for the attorney to receive any "bad news" as early as possible. Always remember that the first and potentially most damaging line of cross examination is the failure to properly and completely investigate prior to rendering an opinion.

Expert Opinions

Only when the expert has done a thorough investigation should an opinion be offered. A tentative thesis should be discussed with the attorney. If the analysis results in a debatable opinion, the expert should say so. Intellectual honesty or dishonesty will be exposed during cross-examination. Early candor promotes fair settlements, reduces costs, and brings credit to the experts involved.

If, on the other hand, a definite opinion is warranted, it must be stated clearly, firmly and unequivocally. An equivocal or conditioned opinion insures trials instead of settlements, promotes full employment for lawyers and their staffs, and creates a lack of respect for the expert's profession by lawyers and judges. Always believe that the expert for the other side will be certain of his/her interpretation.

The author recommends caution in obtaining a written opinion. The expert's opinion will be obtained by the opponent during trial testimony. Knowledge about facts and circumstances often changes during the course of the case. The precise issue for the expert may change. Interim opinions can be extremely damaging. Written opinions cost money and only infrequently enhance the attorney's ability to prosecute or resolve the case.

One final note in obtaining opinions: make sure the expert stays within his/her area of expertise. If necessary, retain additional experts to cover the area in dispute. This is not an area in which to "pinch pennies." When other experts are retained, or more than one expert on an issue will be used, consultation between experts should occur prior to an opinion being offered. The consultation between experts should occur when each can testify his investigation was complete.

The Opponent's Expert

If possible, obtain the name of the expert(s) for the other side and develop background information. What are his/her academic credentials? What is his/her reputation? Will he/she render an honest opinion? If the answers to these questions are comforting and if you are confident in your position, discussions should be held with the opposing attorney in an effort to furnish the opposing expert sufficient information to reach the same conclusion you have. If a credible differing opinion will be offered, it is better to find out prior to trial.

Before The Trial

Conduct an open discussion between experts with the lawyers and decision makers present. Facts and witnesses can be evaluated by this process and settlement simplification of issues often results. It is not uncommon for an expert to make a presentation to the other side. This avenue shows confidence and tends to intimidate the unprepared or inexperienced. Consider having the expert's deposition taken. Depositions provide valuable experience for the expert, may develop problems while there is time for them to be solved, and often demonstrates the strength of your case to the other attorney.

The attorney should work closely with his/her experts to determine which areas to develop for the questioning of the opposition's fact and opinion witnesses. The expert should be prepared to advise which facts are important and to identify potential weaknesses in the opposition's case. The expert should be in attendance at the deposition of all opposing experts and important fact witnesses. Before his own deposition, the expert should be advised by the attorney on expected areas of inquiry and method of response to questioning.

Consideration should be given to taking the expert to a mediation or judicial settlement conference. An expert with credibility will often be more persuasive than a lawyer representing the expert's opinion on the amount in dispute and the methodology used to arrive at the opinion.

Get the Full Benefit of Your Expert At Trial

One of the most crucial aspects of trial testimony is the ability to communicate technical points to the non-technically trained listener. Two fundamentals are the use of a non-technical vocabulary and demonstrative evidence: charts, graphs, diagrams, pictures, and models. Great care and thought should be given to the most effective ways to illustrate testimony. All exhibits should be of high quality, simple, clear, and of sufficient size to be easily seen and read. Pictures and diagrams should correspond so that comparison is invited. Simple demonstrations can be extremely effective. The attorney will be unable to particularize the infinite possibilities for demonstrative evidence, but a good expert, when asked, should have excellent ideas. However, all concepts and final exhibits proposed by the expert should be carefully reviewed with the attorney as the direct testimony of the expert is developed.

Dress for depositions and trial should not be overlooked. An expert in a suit is more credible than one in boots and blue jeans. Any file folder brought to trial or deposition will likely be reviewed by the other attorney. Seemingly small items such as this can determine whether a case is won or lost. Remember, the persuasiveness of expert testimony is ultimately judged by the expert's appearance, the quality and clarity of exhibits, and most of all, the expert's preparation.

Cross-Examination of Expert Witnesses

Your ability to effectively cross-examine the opposing expert bears a direct relationship to the extent of preparation of your expert, as well as the opposing expert's preparation. The lawyer who knows more about the facts or theories applicable to a particular case than the expert witness will destroy that expert's credibility, and therefore the opinion he or she offered on direct examination. The unprepared expert may be able to handle an unprepared or inexperienced lawyer but will almost always be embarrassed by a competent, prepared lawyer.

The author recommends the following techniques to his expert witnesses for use during their cross-examination by opposing counsel:

1. Make liberal use of exhibits when responding.
2. Listen to each question carefully and answer only the question asked. If the formulation of the question makes it impossible to answer, say so and explain why.
3. Pause before answering a question so the attorney can object.
4. Look at the arbitrators, judge or jury when answering questions. Good eye contact is a component of effective communication.
5. Try to state your major points in answer to questions. This tactic calls for "no, because," "yes, but" or "the reason that is true is. . ."
6. If you are unfamiliar with an article or textbook, you should ask to see it. You should take sufficient time in reviewing to decide whether you can say it is not relevant.
7. Always maintain your composure. Do not show frustration with incompetence or endless repetition. Answer patiently and the best you can. Let the judge or jury be frustrated and impatient.

A carefully chosen, properly qualified and prepared expert witness can be your single most powerful tool in litigation. Alternately, a hastily chosen, ill-qualified, and unprepared expert can be extremely damaging. Make sure that you are prepared, and be ready to take advantage when your opponent is not.

This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

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