Expert witnesses and consultants are not new to the legal industry, but are increasingly playing a larger role than they have historically. This is especially true in more complex industries. The timeshare, fractional and private residence club industry is a good example. The industry’s different structures, local and state regulation, changing product forms and increasing push back from consumers, whom in some way feel they have been wronged, is pushing legal action across the country. When litigation commences, its only before court imposed deadlines loom near, that legal counsel run out to find an expert, often at the last possible minute. While experts can be as expensive as legal counsels, integrating them into a robust legal team can actually lead to shorter litigation cycles with more robust results.
At Chasen Capital Advisors, we know this process well. Often we are called upon to represent both defendants and plaintiffs, however, occasionally the call is simply too late. In the past few years we have represented large defendants such as Diamond Resorts and Bluegreen Corporation against shareholder related suits. We have also served as lead or assisting experts for actions against Marriott International, Four Seasons Hotels and Resort, Marriott Vacations, Interval Leisure Group, Starwood Hotels and Resorts and Starwood Vacation Ownership now known as Vistana Signature Experiences. By early retention, we can be most effective in helping shape litigation strategies, revision of complaints, the discovery process, expert opinions and ultimately testimony.
The First Tee – Crafting the Complaint
Often the first formal step in litigation is in the drafting and serving of the complaint. Our experience is that litigators often use the first complaint as a fish net to try and lay out a broad strategy upon which to litigate. And while there is an old saying, “all bets are won and lost on the first tee”, litigators often get a chance to “play a mulligan” by amending a complaint several times as more information becomes available and the legal team sharpens its prosecution or defense strategies. However, a well crafted complaint is often critical in surviving obligatory summary motions to dismiss. Not only does it provide the court with a roadmap as to what direction the participants intend to head, but lays down a predicate of facts to be tried. Experts when brought in early can often help legal counsel separate what can ultimately be proven and what is merely unfounded bias or perceptions on behalf of clients. Our extensive history allows us to highlight strategies which are likely to prevail and survive rebuttal.
Discovery, the Bedrock of Information
Perhaps the most frustrating areas for many experts is being brought in after discovery has commenced and finished. Often an expert gets into the litigation and while the complaint or defense might be solid, the information to support an opinion is simply lacking. Overly broad discovery requests are often bitterly fought when they do not conform to the facts to be tried, leading to inefficient and expensive litigations. A good expert knows what to ask for and where to look for key information which they know (i) the litigant has, (ii) why the counsel needs such discovery to prove or defend against the alleged acts and (iii) how such discovery can be weaved into depositions, reports, expert witness testimony and other aspects of the litigation process. Often we are initially brought in on a limited scope, to help delineate the documents and communications, which we believe will prove to be important down stream. In broad discoveries, attorneys often find themselves with a plethora of information which they then have to meticulously mine in order to find useful nuggets of information and support a theory of prosecution or defense. This is costly and time consuming. An expert’s job is to be a lens which focuses legal counsel on obtaining those documents which have the highest likelihood of yielding important information. We also are important in identifying which parties are of the greatest importance to depose. Once the widow for discovery closes, and unless there is a lack of cooperation or the withholding of key documents, material aspects of the complaint may remain unfounded in the eyes of the court and jury. Conversely, important factual corporate data, communications and representations can provide the basis for a particular strategy to prevail. Relying on 30(b)(6) depositions in federal actions as a last bite at the apple, can often prove to be limited and unsatisfactory at finding key pieces of evidence. Once brought in for initial retention and discovery assistance, we are cognizant of the cost of the litigation and generally take a temporary diminished role until an action survives or is dismissed on initial motions. However, losing vital information will often shape and determine what an expert can testify to and what counsel can prove.
Setting the Course – The Process for Developing Sound Case Strategies and Direction
The law firms we generally work with are loaded with talent, have robust resources and excellent litigators. They are unquestionably the captains of the ship. Their expertise is the law and litigation. The expert witness is knowledgeable of the actual subject matter, industry convention and specific areas which can be exploited. Hence, they are an important component of helping set a course for the litigation. As mentioned above, first complaints are rarely perfected and often need to tighten their scope and direction if they are to survive. Defendant’s counsel often need to know if the expert believes there is real exposure or if the counsel’s theory of the litigation can be sustained. It is not uncommon for us to turn down involvement in litigations where we do not agree on the overall strategy or do not believe we can add exceptional value as a member of the team. By weaving the expert in as an integral member of the legal team early in the process, case strategies and directions can be focused on outcomes with the highest likelihood of success. As any litigator knows, litigations are risky and expensive, and in the case of contingent arrangements are critical for legal counsel to recoup their time and land a favorable verdict. However, overwhelmingly litigations are settled and never go through court or jury rendered decision after a somewhat protracted process. Today, approximately 95% of cases are settled or dismissed[1]. Usually, litigators wait until all settlement talks have failed and the clock to trial and expert production is nearly upon them. However, while there are some added costs involved, bringing in an expert prior to having to go to trial, such early retention can often lead to more productive and fruitful settlement negotiations. While this article argues for early involvement of an expert, settlement discussions can often be aided by an expert’s guidance. In some cases, plaintiff’s expectations are simply unrealistic given what a defendant can do. In other cases, a defendant’s expert can aid counsel in showing plaintiff’s counsel that their theory of prosecution is weak from an industry point of view and is not likely to prevail at trial or the risk is so large, that a settlement is the best course of action. Experts are also useful to defendant’s counsel in providing an unvarnished impression of defendant’s alleged behavior.
Depositions, Opinions and Rebuttal
Generally, experts are retained to provide consulting and/or testimony regarding support or denial of alleged conduct, constructing a case for damages quantitatively, which would provide adequate remedies and rebutting damage estimates provided by opposing counsel’s experts. This is where good experts can be separated from just knowledgeable industry participants. Damage estimates have to survive the rigor of opposition, be constructed in such a fashion that it is acceptable in light of known science and industry practices and finally are able to be creatively designed to construct the most supportable amount of damages. On the defendant’s side, inappropriate damages set forth by plaintiff’s counsel need to be scrutinized and rebutted. While many litigators are financially savvy, they often aren’t trained to understand the weak spots in the construction of a damage claim. General responses to a well crafter opinion are not an appropriate rebuttal. As in everything, details matter and the application of the right details can sustain or rebut an expert’s opinion of damages. While pyrrhic victories are satisfying to some plaintiffs, they often do not fully compensate the parties to a litigation adequately.
Litigations are costly, uncertain and rigorous processes which ultimately lead one side or the other to prevail. Most complex commercial litigations require the involvement of an expert at some point to provide evidentiary support to a litigant’s position. Properly using an expert with discretion and direction can minimize litigation related cost, improve the quality of information discovered and lead to sustainable defenses or proper and just remedies to injured parties. Good experts are highly knowledgeable in the subject matter they are asked to opine on but are also excellent communicators and can add dimension and depth to any litigation team.
[1] The LawDictionary.org