Ultimately, commercial litigation is about monetary compensation or economic damages. Even the most qualified and experienced damage experts still need some assistance from attorneys. As the old poem says, “Let me count the ways…”
To ensure that an expert can properly evaluate the economic damages involved in a case, an attorney should provide the expert with all produced documents, depositions, answers to interrogatories, and case filings. The exception is the rare case in which all agree that commercial damages can be easily identified with few documents.
Damage calculations are not simple compilations of numbers. Damages are a quantitative portrayal of what would have happened in the absence of harm compared with what did happen. Damage assessment includes consideration of revenues, costs, and profits, typically past and future, that cannot be observed because of the harm. Even for the firm operating in the presence of harm, the performance of which can be observed, future performance cannot be observed. Despite these challenging inherent characteristics, every aspect of the expert’s analysis must be supported with evidence and determined as reasonably certain.
Damages must also be linked with the alleged harm. Alternative explanations must be evaluated as possible causes. Deposition testimony can reveal personnel changes, updates to equipment, technological advances in the relevant market, changes in marketing strategy, or other potentially relevant matters. Additionally, industry information sources used by the expert can be verified by corporate representatives as credible industry standards.
With global document access there are fewer surprises. In the cases in which I have heard that expert opinions have been fundamentally altered on the spot, the experts were shown crucial information to which all had access except the expert. I have read about experts who walked out of their deposition on being shown such information. Just as the attorney needs to know the facts of the case, so does the expert.
When experts are allowed to provide deposition questions, the deposed can verify key aspects of the damage analysis. In one antitrust case, the CEO of a hospital substantiated that the market he served was consistent with my characterization of the market rather than what the expert hired by his attorney was indicating. Attorney clients are usually unaware of the particulars of expert battles.
Deposition questions can solicit meanings of key data and changes in the data over time, what strategic analyses of the market might have been prepared within the firm, or other matters relevant to the situation at hand.
A difficult situation for an expert is to be hired or asked to begin work near the close of discovery. It is often more difficult and expensive to conduct a damage analysis with incomplete information that could have been remedied with earlier expert involvement, and the product may be less helpful than it could have been.
Knowing the Expert’s Work
It is common in litigation for staff attorneys to prepare much of the case and for trial to be conducted by more senior staff or staff from partnering firms. From my perspective, it is imperative for a trial attorney who has not worked with the expert to take the time to know the expert’s work.
In one large successful case, the trial attorney worked extensively with me to learn my analysis and the best way to present it to a jury. In another large case, the new trial attorney took my testimony at the last minute but did not study my work. He considered me an avenue for getting certain documents into the case. While this is a legitimate strategy, the heart of my work was never solicited, and it hurt the case. In another occasion, an appellate court stated what should have been considered in trial, and it was exactly what was in my damage analysis that never saw the light of day in trial testimony.
The typical judge will not allow an expert to lecture. An expert must answer questions. The trial attorney can better know the right questions if he or she understands the expert’s work. A successful preparation will lead to a successful presentation and benefit all.
Liability is important to establish. So are economic damages. Early cooperation and communication between an expert and the attorneys goes a long way toward a successful conclusion.
Tell us: What do you think are the best ways to incorporate damages experts into a case?