While most of the work done by an economic expert is expected to be conducted at the report-writing stage, the expert can provide valuable assistance to plaintiff attorneys even at the pre-litigation stage. One especially helpful area is in conducting a feasibility analysis. A “back of the envelope” analysis of damages by an economic expert can assist attorneys and their clients in deciding whether it is feasible to pursue litigation. If it is determined that litigation is feasible, the expert can further provide help by reviewing the complaint to determine, e.g., whether the theories of harm are economically plausible. In a dispute where the fact pattern is not complex, these types of tasks are not expected to be time- or budget-intensive and may even prove cost-effective in avoiding additional work such as having to rewrite a complaint. Experts also can assist with identification of relevant information and production requests from opposing parties. Experts can thus bring efficiency to the discovery process because their requests are likely to be targeted to information needed to conduct a proper quantification of damages.
After the complaint is filed, defense attorneys can bring in economic experts as confidential consultants to estimate potential liability early on, which could inform legal strategy. Once litigation is under way, the economic expert can quantify damages for the plaintiff and provide a rebuttal or affirmative analysis of damages for the defense (or both). Economic experts also can help in drafting deposition questions for opposing expert depositions. When it comes time for settlement negotiations, economic experts can provide analyses in support of a settlement demand. If the matter progresses to trial, the economic expert can help in identifying what elements of the damages analysis are important to highlight in opening and closing statements. Also, economic experts can assist with designing demonstratives relevant to damages, and they can assist in drafting direct and cross-examination questions. After the trial, the experts can assist with briefs.
Having identified several ways in which damages experts can provide assistance at the pre-litigation stage and as litigation progresses. I next discuss some considerations for the interview and selection process.
Some considerations to keep in mind when engaging experts are to evaluate both the academic credentials and relevant experience of the expert. With respect to academic credentials, typically experts have doctorate, accounting, or other graduate degrees. Evaluating relevant experience can be slightly more nuanced than just figuring out whether the expert has testified previously on damages issues. While the damages framework in many respects can be considered as “industry agnostic,” in certain industries it may be necessary for the expert to have specialized knowledge. Conducting an interview can help determine the extent of the expert’s experience in the relevant industry. It may also help to gauge the potential expert’s demeanor and ability to effectively communicate. During interviews, asking the potential expert his or her thoughts about the damages framework or how the expert would address the issues can provide valuable insights. If the expert has relevant publications, request a copy and review those publications to determine whether there is any potential for controversy with respect to a position that the expert may have adopted in the past vis-à-vis the case at hand. You may also want to know whether the expert’s past experience weighs more heavily toward plaintiff or defense work. It is desirable to have an expert who has testified both as a plaintiff and defense expert.
Something to keep in mind when budgetary concerns are front and center is that many firms have “up and coming” experts who are starting out in their career and have served only as consulting experts and don’t yet have testifying experience. These experts can offer a cost-effective alternative to more seasoned experts who have testified numerous times. Once an expert is engaged, ask the expert to provide a budget and scope of work, and from that point forward, attorneys and experts can collaboratively work to develop a methodology for the assessment of damages.
Having discussed the contributions of economic experts in the life cycle of a typical litigation and offered some practical advice to consider before engaging an expert, it is important to recognize that every engagement is different, and some engagements with small damages may not merit the expense of engaging a damages expert. However, if there are complex issues involved in determining actual or but-for earnings, then engaging an expert may be warranted. Likewise, if only one party to a dispute has engaged an expert, then the party without an expert can find itself at a disadvantage. While the decision whether to hire an economic expert ultimately can rest on the economics of the client, it is a decision with numerous potential benefits and thus should be carefully considered.
