How to optimize the attorney-expert relationship

BVWireIssue #135-1
December 4, 2013

Attorneys and valuation experts need each other, but that kind of dependency doesn’t necessarily make for a successful relationship. Attorneys at the recent AICPA Forensic & Valuation Services Conference in Las Vegas provided tips for turning the collaboration into a win-win situation for both sides—and their clients.

Read the documents. Make sure you read all of the documents the attorney provides. At deposition, an expert’s apparent unfamiliarity with a document he or she received, and should know, embarrasses expert and attorney alike.

Know Fed. R. Evidence 26. Broadly speaking, it limits disclosure to any “facts or data” the expert considered in preparing his or her report. It also prevents the opposing attorney from requesting draft reports or other disclosures made in the preparation for trial, with the exception of information related to the expert’s compensation, to facts, or to data that the attorney provided to the expert, as well as assumptions on which the expert actually relied in formulating his or her opinion.

A useful paper discussing the scope of Rule 26 (as amended in 2010) from the American Bar Association cautions that this degree of protection still leaves wide room for inquiry, which a skillful opposing attorney will want to exploit.

States have their own discovery rules, making it critical that the expert know whether the matter is a federal or state court case.

Disclose the information. An expert’s timely disclosure to the attorney of all prior expert testimony and all prior publications enables the attorney to ensure that the expert did not previously testify in a manner that contradicts the theories underlying the current case.

Put your best foot forward in deposition. The way an expert performs at a deposition may make or break the attorney’s case. Knowing that a convincing performance may assist in reaching a settlement should guide the expert in how to prepare the report. Consider yourself an educator.

To help the expert succeed, and strengthen the case, the attorney would do well to prepare—not coach—the expert for deposition.

Seek and find lost profits. Attorneys expect damages experts to dig deep. Just because a client company (plaintiff) is still profitable following the defendant’s wrongdoing doesn’t mean it has no claim to lost profits. It’s the expert’s job to talk to the company’s key financial people and explore whether there could have been more growth “but for” the defendant’s conduct.

Conversely, if you are working on the defendant’s case, make sure to account for all outside factors that figured into the plaintiff’s loss.

Mention causation. A plaintiff’s damages expert expressly needs to tie the defendant’s wrongdoing to the loss the plaintiff sustained, even if the attorney will present the legal theory of causation. Readers may remember that Nancy Fannon (Meyers, Harrison & Pia) made the same point here in BVWire earlier this year.

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