Six tips for keeping price of your expert witness within your budget

By Jim Schmid

Grant Thornton LLP

Most commercial litigation cases require the parties to assert or refute a damage claim. Cases related to contracts, fraud, business interruption, intellectual property infringement and post acquisition disputes all require the services of a damages, or business valuation, expert witness to present the damage claim to the trier of fact. Financial and/or business valuation experts who have the right experience for your needs and who are experienced testifiers can be hard to find and can be expensive. Controlling the cost of your expert witness while getting value for his/her services is an important responsibility of the attorney.

Following are my six best practice suggestions for keeping your expert witness costs within your budget:

1. Get the expert involved early

While it may sound counter-intuitive, one of the best ways to control cost is to engage the expert early. In the preliminary stages of a potential lawsuit, an expert can offer a simplified analysis on potential damages, providing a reality check on your outcome assessment. A strong liability case with a small damage potential is a waste of time and your client's money.

If you decide to proceed, an expert that is already versed on the case can offer early advice regarding applicable damage theories and the necessary documentation to quantify the damages. Alternatively, if you've exhausted your ability to request documents, and then find out from your expert that you need something, you'll be out of luck.

2. Ensure the pace of the expert is coordinated with the pace of the case

Don't let the expert get ahead of you in the litigation process. You must have a game plan and open communication between all involved parties. Create a team atmosphere where everyone shares the same goals for the outcome. That will make it easier to keep the participants at the same stage at every step of the journey. If the case settles, you won't want to be in a position where you have to pay for work completed by your expert that you don't need.

3. Don't hide bad news from the expert

If your case has a weakness, assume at a minimum that the expert will be cross-examined on it, so you want to ensure the expert is prepared. You can spend a lot of money on an expert and not tell him about some issue, which could taint all the work the witness has done. It's better to anticipate the bad news rather than surprise the expert and have his work product potentially discredited.

4. Act as a traffic cop for the amount of paperwork shared with your expert

You don't want to burden your witness with unnecessary or extraneous information because he or she will then spend too much time reading irrelevant material. At the same time, you do want to give him/her everything pertinent to the damage approach being analyzed. It's a careful balance between too much and not enough information.

5. Recognize some fights are worth fighting and some aren't

If you have an element of damages that's not material to the case, consider not even presenting it. Otherwise, the witness will spend more money analyzing it than you can possibly get in (or deduct from) the award. The witness can lose credibility by quantifying damages that aren't material.

Additionally, if one of the damage claims on your list of damages has a low probability of success because it will be difficult to prove liability, then don't have the expert spend a significant amount of time quantifying those damages. Focus your expert's time on the high-dollar items that have a high probability for success.

6. Hire the right expert

The key to hiring the right expert starts with doing your homework, checking references and examining work the expert has done previously. Then, you need to ask yourself: can you work with this person; does he or she listen; and can you communicate with each other?

The witness must be able to explain complicated theories and principles in layman's terms for a jury. No matter how scholarly and qualified the expert may be, if he or she cannot relate to jurors, it isn't worth the cost.

Conclusion

Making the investment in a qualified expert can often be the deciding factor in obtaining a positive outcome for your client. With open communication and mutual respect, it is possible to manage expert witness costs and get the very best results for your client.

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Jim Schmid is a partner with Grant Thornton LLP and the Detroit area practice leader for Forensic Accounting and Investigative Services. He provides economic and damage analysis as an expert witness and litigation support consultant.

Published: Tue, Jul 31, 2012

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