Pursuing a Good Case – Understanding the Expert Budget
Author: Chris Young, PhD
For the past eight years, I have been working mainly in the capacity as a testifying expert in the fields of financial accounting, forensic accounting, financial markets, or business ethics-related cases. Over this period, I have learned a few things about the world of experts.
Today, I want to touch quickly on the topic of expert budgets. So often, I am called by an attorney (sometimes a judge) who requests our services to assist them in their case. Most often, the attorney asks me for an affirmative economic damages report, if working for the plaintiff, or a rebuttal report if working with the defense. Typically, we discuss a budget – a critical question and one that should be discussed more often.
However, the budget question is not an easy one. Sure, the budget for the initial report is discussed, and we come to some agreement, but rarely do I get the follow-up question – “what is your fee if there is a rebuttal report from the other side?”
Other items that are typically not discussed are related to fees for assisting the attorney with crafting deposition or trial questions for the hiring counsel, or perhaps sitting in on an adversary deposition. Most recently, I testified in a case where we were working for the plaintiff, where we received multiple rebuttal reports from different named parties on the lawsuit. In this case, we had to review three rebuttal reports, and help counsel to understand each of them (some were very complicated). These additional reviews were complicated, costly, and not considered before the beginning of the case.
Another question that comes to mind is – “who is your adversary?” Does the company (or person) being sued have somewhat unlimited financial resources? If so, be prepared for a long drawn out expert battle. A few years ago, we were up against a large defense manufacturer, who, for the most part, had endless attorneys, endless experts, and who required a sizeable portion of our time. This was not factored into the budget – but probably should have been. When in a fight and your adversary has a fair amount to lose, add in a substantial financial contingency for your expert budget work.
Other issues that come up relate to the quantity and quality of the data which is available from our client. In the not too distant past, we bid on a case where the financial data for the plaintiff was awful, and we realized that we could not develop an economic damages report, without doing substantial additional work to prove that the numbers were indeed correct. Ultimately, the client decided that our budget to clean the data was too high – and they went with another firm. Of course, this happens, and most often for the right reason, but in the case, at hand, the other firm produced a report, which was ultimately not admitted into evidence due to the deficient quality of the data. This was extremely costly for the firm.
I highlight all of the above because we believe that attorneys and their clients do to not spend enough valuable time with the expert they are considering hiring, before pulling the trigger. Following is a short but useful list of questions to ask your expert before engagement:
Have you worked on case like to this? [if not, but you like the expert ask them to consider a case with closest characteristics]
What was the budget for your expert report in the previous case?
What else did you perform in the previous case?
Did you assist the attorney with developing substantial deposition or trial questions?
How long do you spend crafting the deposition or trial questions? [this is normally a senior level role, so the budget should be discussed]
Were there other expert reports that you had to review and provide commentary?
Did you spend time explaining the issues and complexities of the case with the attorney and client? [In some instances and depending upon the trial team, we can spend a day or week helping the attorney understand all of the nuances of the financial matters. Usually, when this is done, the outcome is very favorable – definitely a cost worth considering.]
Do you think in the case at hand there will be many other experts rebutting your report?
Are you available to sit in on the depositions of your adversary, should it be allowed?
If you find that the data which is available in the case is not strong enough, what is the process envisioned to fix it?
After considering all of the above, it is advantageous for the attorney to ask the expert or the damages firm for a comprehensive estimate, based on the questions drawn above.
We all know that budgets can and do change, but the cases at Red Maple that are most successful are those where the questions mentioned above are probed well in advance of a surprise. We also understand that there is nothing more nerve-wracking for a client who is ardently trying to seek justice, then to have to deal with unforeseen budget issues.
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Red Maple Economics is an economic consulting firm focusing on preparing expert reports for litigation, tax and estate, divorce, and government policy purposes. Should you need any help or want to talk about your case, feel free to give Chris Young a call at 347-522-0480, or drop an email: chris@redmapleeconomics.com