Using expert witnesses to resolve complex issues and provide independent perspective

June 2022  |  SPECIAL REPORT: INTERNATIONAL DISPUTE RESOLUTION

Financier Worldwide Magazine

June 2022 Issue

An expert witness is generally a person who is considered to have specialised knowledge on a particular subject. This person offers specialist knowledge and provides technical analysis that supports considered opinions that can be placed before a court or arbitration to aid the judge or arbitral tribunal in reaching a decision.

Expert witnesses should confine their opinions to matters which are material to the disputes and provide opinions only in relation to matters which lie within their expertise. Experts should indicate immediately when the questions or issues fall outside their expertise or if they are unable to reach a definite opinion, for example if there is insufficient information.

Tips and tricks to get the best out of an expert

An independent expert witness can play an important role in assisting the court or tribunal in understanding the key issues. Often, the more complex the issues at the heart of the dispute are, the more reliant the court or tribunal is on the expert witness’ input. Set out below are a few considerations that may assist legal teams in getting the best out of their experts.

Appointment. It is always best to appoint and involve an expert witness as early as possible, preferably prior to the filing of pleadings. The advantages of doing so include: (i) assisting the party in forming a realistic view of quantum issues; (ii) ensuring claims and reliefs are appropriately framed; (iii) identifying evidence that needs to be disclosed or discovered; (iv) improved efficiency and therefore lowering incurred costs; (v) avoiding last minute panics; and (vi) ensuring quality deliverables.

In a recent arbitration, the expert was engaged to calculate the loss of profits suffered by the claimant as a result of an alleged business interruption fairly late in the proceedings, by which time the pleadings and witness statements had been filed. However, when the expert started his analysis it became evident that the claimant had suffered significant loss of profits in the three-year window prior to the period set out in the pleadings. Whilst the pleadings were amended at this late stage, albeit with difficulty, it would have been better if the expert was appointed at an earlier stage of the proceedings.

Independence. This is one aspect of being an expert that is perhaps counterintuitive to a layperson. Although expert witnesses are typically appointed by parties, they are independent, and their duty is to the tribunal. That is, experts have a duty to help the tribunal and this duty overrides any obligations toward the party that has instructed the expert. An expert witness, therefore, has a duty to say if there are matters that are adverse to their opinion and a duty to advise the tribunal if any matters change following the submission of a report. A useful test of ‘independence’ is whether the expert would express the same opinion if given the same instructions by the other party. An expert should not assume the role of an advocate and promote the point of view of the instructing party.

An expert witness is required to include a declaration in his or her report that affirms this duty to the court or arbitration together with other information in respect of his or her relationship with parties, which allows the court or tribunal to determine if there are any conflicts of interest.

In a recent arbitration, the expert on the other side had stated in his declaration that he and his firm had no other relationship with his client. However, during his cross-examination, it transpired that he had been involved in the preparation of a report that advised his client on the case strategy for the arbitration, which seriously undermined his credibility before the tribunal.

Investigative roles. An expert witness can be appointed to assist the court or tribunal in working out what actually happened. For example, in certain situations, an expert witness may be required to explain to the court or tribunal how a particular transaction was or should have been accounted for.

Liability. An expert witness can be appointed to assist the court in ascertaining whether what has happened is in fact a transgression and a party is guilty of wrongdoing, for example in cases where the directors of a company have been accused of breaching their fiduciary duties with respect to a number of transactions. An expert witness could be required to express an opinion on whether the transactions were indeed detrimental to the interests of the company.

Quantum. Generally, this looks at how much the damaged party has lost. This aspect is all about the money, usually calculated using one of either wasted costs determination, loss of profits determination or valuation.

Conduct of engagement. The legal team plays an important role in facilitating communication between client and expert. Depending on the complexity of the underlying case, the expert witness is required to review various documents to draft his or her expert report. The expert witness should guide the legal team on which documents are relevant and important to his or her analysis and explain the rationale for such requests, allowing the legal team to arrange for these documents to be provided to the expert witness.

Report. An expert’s report is a key work product. It stands as the expert’s evidence and so must be as perfect as possible. It needs to be detailed, formal and robust, as the expert will be challenged aggressively, and any inconsistencies or weaknesses will be identified.

In one arbitration, where the expert on the other side had reached his conclusion based upon the results of a detailed piece of analysis, it later became clear that he had made a couple of errors in his analysis. Once these errors were corrected, the results of the analysis were completely contrary to his opinion, and he was forced to concede under cross-examination that his opinion was unreliable. This situation could have been avoided if the legal team instructing the expert had impressed upon him the need for robust quality control procedures, especially where his opinion was based upon this analysis.

Post-hearing. There is frequently no expert witness involvement at the post-hearing stage of a dispute. However, in more complex situations, courts and tribunals can ask expert witnesses to substitute the tribunal’s assumptions into the experts’ models to produce a quantum of loss for their findings. Alternatively, expert witnesses from both sides could agree on a menu-based model that allows the court or tribunal to pick a number of different assumptions and situations, and the model will provide the court or tribunal with an assessment of damages. For example, in a recent arbitration, two experts set out an agreed matrix which, depending upon the tribunal’s assessment of liability, could potentially assist the tribunal in determining damages.

 

Premjit Dass is a managing director at Ankura. He can be contacted on +65 6486 1405 or by email: premjit.dass@ankura.com.

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BY

Premjit Dass

Ankura

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