Damages experts are commonly retained by parties in international arbitration and other types of disputes, where specialist financial, valuation and accounting expertise is required to resolve complex questions of economic loss. Calling in experts to help solve these questions may be decisive, providing that instructing parties know how to work alongside them. How can Counsel and instructing parties work most effectively with their damages expert?

Instruct your expert early on

My strong recommendation is to instruct a damages expert as early as possible in the process, i.e. as soon as a party is contemplating arbitration (claimant) or receives a request for arbitration (respondent). Unlike many fact witnesses, a good damages expert brings an objective mind-set to the table and will quickly be able to see the key strengths and weaknesses of the instructing party’s case on quantum, help frame the likely heads of claim, assist with issues of liability, and quantify the ‘true’ value of the economic loss, if any. An expert’s insights at this stage can sometimes reveal that a claim has no economic value or substance, saving the would-be claimant from expensive and time-consuming arbitration proceedings, and/or identify other heads of claim not previously considered. For a relatively small budget, the expert’s preliminary analysis can add tremendous value.

Counsel and parties (both claimant and respondent) are sometimes wary of bringing in experts ‘too early’, and instead instruct the expert late in the day with a very short deadline. If the motivation for this approach is to keep expert costs as low as possible for the same end-product, the actual outcome is often unpleasantly different. A good expert will always deliver high-quality, robust reports on time; however it may be difficult for the same expert, who is under enormous time pressures, to work at optimal efficiency. Faced with the challenge of getting up to speed with voluminous case materials, conducting rigorous analysis, and writing a persuasive report that will survive hostile cross-examination, the expert may have no option but to build a support team that is larger than normal and have everyone work around the clock. In addition to the obvious expense of this approach, the risks of working with a highly leveraged and time-pressured team are that (i) the expert becomes too removed from the detail and hence misses critically important issues; and (ii) that errors are made which only become evident on cross-examination. This outcome can have disastrous implications for the instructing party’s case.

Although these risks may not be avoided completely, they can nonetheless be minimised by choosing an experienced expert who is used to working under such time pressures, can be counted on to find creative solutions to complex issues, and is backed by strong team members.

Working effectively

In order to get the most value out of your expert, regular three-way communication is essential. In addition to regular meetings in person, I have found that weekly conference calls are an efficient way of exchanging information, discussing issues, and providing progress updates. That said, Counsel should not wait until the next call to alert their expert to key developments which are likely to have an important impact on the expert’s opinion. This is especially the case with matters that are ‘unhelpful’ to the instructing party and vice-versa if an expert finds something that has an impact.

An effective way of minimising an expert’s costs is for the instructing party to perform as much routine analysis as possible. Clearly, it is up to the expert to direct and review such analysis and draw his/ her own conclusions therefrom; however, where the instructing client party has the resources to produce simple spreadsheets or conduct basic research, for example, this can ensure that the expert and his team are able to focus only on the ‘higher value’ aspects of the case.

I set out below a few other practical suggestions for working effectively with your damages expert.

Where necessary, in order to help preserve the integrity of the expert’s conclusions, Counsel can assist the expert by educating their client(s) about the objective nature of the expert’s role and ‘push back’ where the client seeks to persuade the expert to adopt (an) unreasonable position(s).

I advise getting your expert to assist early on with identifying relevant documents for production requests.

In hearing preparation, enlist your expert’s help with formulating cross-examination questions for the opposing expert.

I recommend discussing different possible approaches with the expert when building the legal case, in order to understand what the implications of each approach will be for the damage assessment.

Finally, involve the expert in the fact witness process so that the expert can appreciate the areas of risks (esp. in testimonies) and use relevant information in the damage assessment.

Feel free to contact me for further information.