Expert Witness Management In Business Disputes

Author Richard Solomon is a conflicts and crisis management lawyer with 50 years of experience in business development, antitrust and franchise law, management counseling and dispute resolution including trials and crisis management.

From time to time I am invited to assist as a consulting expert and/or a testimonial expert in business disputes, often in franchising matters and more recently in franchise law malpractice cases.

I find that those who come to me for this assistance often do not have a firm grasp of what it is that an expert is supposed to provide. Most often there is an impression that if they are paying the bill you are supposed to swear to almost anything. While in my almost 50 years experience I have cross examined opposing experts who seem to be willing to do that, it usually does not work out successfully for them. The tactical errors consist in the main of withholding from the expert documents and transcripts that were required to be produced in discovery and that do not agree with the position to be supported, and in the expert’s willingness to take a “So what?” attitude (without meaningful differentiation) to materials that do not agree with the sponsored position even though he may indeed have seen them.

The net effect of proceeding in that manner is to diminish the expert’s credibility. In many instances all the resources paid for the “expertise” ends up being trashed in cross examination and are simply wasted. Additionally, once your expert has been embarrassed on the stand, a jury will probably reject everything he says or does, even some parts that might really be reliable.

Having cross examined numerous expert witnesses, I have a keen sense of how to prepare one to withstand cross examination and how to be a testimonial witness who can stand up to challenges to the quality of his presentation. It is believed in some quarters that a judge or arbitrator, rather than a jury, will often disregard a worthless expert but not hold the failure to defend his position against his sponsor. In many quarters it is believed that if the judge or arbitrator has already formed the conclusion in his mind when the expert testifies, the expert is simply disregarded if he does not successfully defend the position at which the judge or arbitrator has already arrived. Any judge can tailor findings and conclusions “around” contradicting expert testimony and/or simply state that the expert’s testimony was simply not deemed to be a material factor in reaching the conclusions. Dismissing expert testimony as essentially worthless is probably the easiest thing for any judge or arbitrator to do. It is as close as you can get to a non appealable issue.

I am not what I consider a professional expert, one who makes his living mainly in being an expert witness. I am not listed in any adverts for experts or in any expert witness directories. Once you embark upon the path of being a professional witness, so to speak, it is harder to pass the “hired liar” part of every expert witness cross examination. Ancient humor holds that “There are liars, damned liars and expert witnesses” in that order of uselessness.

That is somewhat unfair to many who do advert themselves to be expert witnesses and who do possess real expertise on matters to be decided. Many such people will not prostitute their credentials for a fee. The trouble is that the whores are all in the same directories. One sure sign of the bozo expert is the person who has saved the transcripts of his prior testimony. It is better not to have them lying around as an easily discoverable data base of potentially divergent testimony from that which is to be given in the present case. In listing the cases in which you testified, the opposition can then try to chase your prior transcripts, but that is a much tougher job. Sometimes prior transcript availability is not possible due to protective orders, retention agreement terms and the terms of case resolution agreements. You often have to make do with the names and phone numbers of previous clients so you can ask them how the person you are considering as an expert did in his work for them.

It is important, in my opinion, that a proposed expert not initially be retained as a testifying expert. There is a difference in what must be produced in response to discovery having to do with the work of a consulting expert versus what must be produced in the instance of someone retained as a testifying expert. Since exceptionally good work from a really competent consulting expert may make expert testimony unnecessary or enable it to be more narrow and better focused, the decision to retain anyone as a testifying expert should happen later on in case preparation. The consulting expert should be identified and brought on board as a member of the team as soon as you can identify issues that require exceptional insight based upon experience and superior focused knowledge. Sometimes the consulting expert is needed even before that, as many lawyers miss the more subtle issues altogether without expert guidance. In one recent situation, the lawyers of record in a case involving a franchisor had not even obtained the franchisor’s FDD registrations from public sources. When I pointed out that their last registered FDD contradicted positions taken in the case by the franchisor they were amazed. Someone who can direct you to the right paths is worth more than the many wasted hours of wandering in the weeds learning it all by yourself from scratch.

The consulting expert’s job should be to help with guidance regarding what the issues are; their nuances; the ways in which they may be addressed; and the scope of what should be done in addressing them. In that process the case preparation is refined more quickly; decisions can more ably be made regarding testifying experts; the testifying expert will have his positions outlined the moment he is retained, narrowing what he does that is discoverable; and it will be easier to select candidates to be testifying witnesses.

Often I am called about whether so and so would be a good expert to hire. My first question is “What do you want him to be able to say?” More often than not the caller does not know the answer to that question.

I think it is a mistake and a waste of money to hire a testifying witness before you know what you want him to say and can provide him with supporting data for that position. If the testifying witness has data to review and challenge before he is hired, it will be much easier for him to be immediately useful. It will also be easier for him to say that he would not be able to agree with your position and avoid being hired in the first place if that is indeed the situation. Considering that the testifying expert may be charging more that the consulting expert, simply as a matter of the responsibility assumed, hiring the testifying witness before his testimonial burdens are formulated will probably result in a lot of wasted resources. It will also expand the scope of his cross examination, as he will have to answer for everything he did. If most of what was done was done before his retention by a consulting expert, he will not have considered, and have to testify about, what was rejected before his retention and not shown to him, if it was not required to be produced in response to discovery. A really good consulting witness ought to be able to control the scope of rejected positions so as to avoid the accumulation of information that is counterproductive. After all, that is the expertise of a real consulting expert – not going down blind paths to nowhere.

In one recent case in which I was called but not hired as the consulting expert in a very large covenant not to compete franchise case, the “big firm” hadn’t a clue. I later read that they advised their client that their position was untenable, and the case was resolved with dismissal – after $ 16,000,000 in legal fees. If you can’t figure out that you have no case until you have charged a client $16,000,000, you really are wandering around in the dark. That is the most outrageous example of mismanagement I have ever encountered. For obvious reasons, I will forego mentioning the name of the very “prominent” firm.

One of the more damaging situations that needs to be identified and sorted out ASAP is that in which the client has an untenable position that he believes is not negotiable and must be supported at all costs. I am often surprised that this sort of client is so rarely told in succinct terms about the limitations of evidence. Evidence is difficult to manufacture when there is contradicting evidence that exists that was created during the time when the dispute was in formation. The discovered hot documents more often than not cannot be overcome with fanciful, contrived testimony. Moreover, the authors of the hot documents will be cross examined about them before the expert witness is heard, and it is unlikely that the authors of the hot documents will have succeeded n “explaining” them away.

Bill Gates lost the respect of the trial judge when he denied that what he wrote meant what they quite plainly said. That sunk his company’s case on intent to monopolize issues and seriously diminished the value of his testimony. There were alternative things he could have said about those “intent” documents that would have been reasonably credible, but his lawyers completely missed that opportunity. He would have been much more believable had he said that he did mean what those memoranda said, but as it turned out, the market did not permit the intent to be translated into an achieved reality. Market forces often contradict stated intent, to the benefit of the accused company in antitrust cases. As hard as that might seem to be in the instance of Microsoft, on the issues about which Gates was testifying, there had indeed been intervening market forces thwarting the intended result. Sadly, that opportunity was completely missed and Gates simply failed in credibility when he denied that what he said was what he meant.

Clients need consulting experts to help with showing them where their misguided notions can lead to misfortune. In fact it is better for the consulting witness to be used in disabusing the client of misguided notions. If the client is unreachable, it is always easier to fire the consulting witness than to fire the lawyers. In reality the lawyers probably would lack the fortitude to take the being fired risk in this situation. I have often thought that the travesty of the big firm scenario I discussed above may well have arisen because of an insistent client being married to an untenable position on a critical issue and the lawyers not having the guts to tell him the why and how of it all. How often do you encounter an adamant client with $ 16,000,000 to waste chasing evidentiary fantasies? If I am misjudging the law firm, then the client was just an incredibly successful business person who was delusional and refused to accept good advice. While that is unlikely, it is not impossible.

A consulting expert who really is an expert can save a lot of money in case preparation; can save a lot of wasted effort chasing will of the wisp theories; can identify claims, defenses and positions that less experienced counsel in the particular subject tend to miss; can make a very significant impact upon the quality of the presentation of the case; and can help significantly in educating the client – if allowed to do so. The earlier the right person is selected and retained, the greater the benefit in having that resource on board.