An Expert’s Deadly Disease—Bias Reviewed by Momizat on . Understand the Critical Distinction Between a “Testifying Expert” and a “Consulting Expert.” Brad Eldridge and Rebekah Smith explain how the requirements for a Understand the Critical Distinction Between a “Testifying Expert” and a “Consulting Expert.” Brad Eldridge and Rebekah Smith explain how the requirements for a Rating:
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An Expert’s Deadly Disease—Bias

Understand the Critical Distinction Between a “Testifying Expert” and a “Consulting Expert.”

Brad Eldridge and Rebekah Smith explain how the requirements for a “testifying expert” in litigation work vary considerably from those for a “consulting expert.” Learn more about this distinction and find out how consultants can develop a checklist of best practices for courtroom preparation.

It seems that an expert’s role in litigation is sometimes not fully understood by all parties involved. Frequently, testifying experts may occasionally assume too much of an advocate or “attorney” role in the engagement. Attorneys by their very nature are allowed to, and should, be advocates for their client. Testifying experts, on the other hand, must be advocates for their opinion (which is a usually quantitative position) and not an advocate for retaining counsel’s client. 

Testifying Expert versus Consulting Expert
Inexperienced experts sometimes attempt to simultaneously be both a consultant and a testifying expert. To understand and appreciate what the testifying expert’s role is, you also need to examine what the consulting expert’s role should be in a litigation project. In general, a consulting expert is an expert that is hired by counsel to assist with the litigation, but who is not expected to give expert testimony or deposition.

An important difference between the consulting expert and the testifying expert is that the consulting expert is not held to the same level of independence and lack of bias as the testifying expert. A consulting expert, where appropriate, can take more of an advocate role for the client and endeavor to assist counsel with trial strategy.

Counsel can use consulting experts in a variety of roles: to initially critique the case, assist in the formation of questions for trial or deposition, assist in the selection of the testifying expert witnesses, and/or review the work of other experts to identify strengths and weaknesses.

“If a judge or jury does not believe an expert is neutral and impartial, the judge or jury may not believe the expert at all.”

Procedurally, there are differences between the consulting expert and the testifying expert. Generally everything the testifying expert witness sees, relies on, produces, and says is discoverable by the other party. On the other hand, the work of a consulting (non-testifying) expert is generally not discoverable, so long as that person remains a non-testifying expert.

A word of caution to experts, though: the minute a consulting expert’s role changes to that of a testifying expert, all information that you relied upon or produced as a consulting expert generally becomes discoverable.

What is the role of the testifying expert? In contrast to the consulting expert, a testifying expert may not, and should not, be an advocate for the client. Theoretically, given all the same information and legal assumptions, a testifying expert should reach the same position of value regardless of whether retaining counsel represents the plaintiff or defendant. A testifying expert is an advocate for his or her opinion of the value of the company or the economic damages or whatever opinion the expert has with regards to that particular litigation. And as mentioned above, all documents reviewed by the testifying expert, all information received, all conversations, everything is discoverable by the opposing counsel. 

Before Accepting the Engagement
There is one preliminary step prior to accepting the engagement that an expert should take to ensure there is no bias. An expert should always make sure to perform a thorough conflict check on all the names of the parties involved in the litigation. Actual conflicts, of course, should cause an expert to immediately reject an assignment. Perceived conflicts, however, may not always preclude the expert from working on the engagement, but should be disclosed to counsel and allow them to decide what action to take.
 
Perceived conflicts can affect the credibility of an expert’s testimony and deserve careful consideration. For example, imagine an expert that works for a public accounting firm. He receives a phone call from plaintiff’s attorneys about a potential case and without asking the names of the parties, accepts the engagement.

Right before trial, the expert discovers that the plaintiff is an old client of the firm that still owes the firm a considerable sum of money. This could easily be portrayed by opposing counsel as motivation for the expert to be partial in order to ensure positive results for the plaintiff thereby increasing the expert’s probability of collecting the firm’s receivable. This situation could have been avoided had the expert performed a conflict check prior to accepting the engagement. However, even if no money was owed, the fact that the expert’s firm did, or does, ongoing business with the plaintiff can create the appearance of bias as well.

Editor’s Note: If the client is a publicly-traded audit client, Sarbanes-Oxley prohibits accepting the engagement. So, in addition to the appearance of bias, the firm will also be in violation of new regulations and subject to sanctions.

Whose Opinion Is It Anyway?
As a testifying expert, the expert should form their own opinion based on the data and documents provided, not the version of the story told by counsel and the client. It is sometimes counsel’s interpretation of the facts that create biased expert witnesses. Testifying experts cannot blindly accept the attorney’s and the client’s version of the facts without verification of underlying data and documents. We recently heard a story about a testifying expert who was being deposed in an economic damages case. This gentleman was providing testimony regarding damages, and the largest portion of the damages calculation hinged on a penalty of about $4 million. The penalty was documented in a legal agreement and could easily have been calculated. Under oath, this testifying expert said that he had never reviewed the legal agreement and had not calculated the penalty himself. He simply took the attorney’s word that the penalty equaled $4 million. The actual calculation of the penalty was significantly lower than what the attorney asserted. This is a case of an expert who had caught the bias bug. He should have done a more thorough due diligence, reviewed the document, and made the calculation himself rather than relying on counsel’s opinion. As a result, his credibility as a testifying expert was diminished. The perception is that he was being an advocate for his client’s position.

An expert’s opinion should be based on the data, analysis, and documents reviewed. For example, retaining counsel tells the expert that the plaintiff was receiving 10% salary increases every year for the past five years. If the expert wishes to consider this information in determining what the plaintiff’s wages would have been in the future, the expert should verify those salary increases by examining human resource records, pay stubs, W2s, or tax returns.

If the expert was to simply accept the attorney’s word that the plaintiff’s wage increases were 10% and relied on that “data,” he would appear biased to a judge or jury, and his testimony and credibility could be discounted. It is important for experts to form their own opinions based on facts, data, and analysis.

What Not to Say
The only language that should appear in a report or be used by an expert when testifying or being deposed is language that objectively supports an expert’s conclusions and opinions.

Making the mistake of including superfluous language can damage an expert’s credibility and present the appearance of bias. Common mistakes such as including “speeches” in the expert report or writing letters that thank counsel for the engagement invites critiques and comments, and any other language that suggests that the expert is overly friendly with counsel can create the image of bias. An expert that uses his or her report to make a speech may have dealt themselves a deadly blow. Interjecting “speeches,” editorial comments, or pontification in the expert report makes the expert appear as if he or she has interests beyond an objective evaluation of the damages or the value of a business.

For example, consider an expert who has been retained by plaintiff’s counsel in an age discrimination case. The expert has been retained to provide an opinion on the lost wages of the plaintiff due to his termination. In the expert’s report, the expert makes mention of “the tragedy in today’s society of terminating older workers that can provide valuable training and mentoring to younger workers.” Including statements such as these in an expert report does not support the expert’s conclusion, is certainly not objective, and makes the expert appear biased towards the plaintiff. Language that makes mention of moral obligations to pay or “costs to society” or any “speech” that suggests that the expert is taking an overly partisan role in the litigation could severely injure the expert’s credibility.

Experts occasionally include personal language to counsel that can call into question the expert’s impartiality. Adding a sentence to the cover letter that sends wishes to the attorney’s spouse or mention of the children creates the appearance of a personal relationship between the expert and the attorney.

Consider a cover letter that states “P.S.—Tell Anne and the children I said ‘Hello.’ We will have to schedule a play date soon for George and Thomas.” This appearance of a personal relationship may be used to show the trier of fact that the expert may be biased in favor of his good friend, retaining counsel. This type of language should be omitted from correspondence about the engagement in order to avoid the appearance of bias.

Cover letters should be succinct and formal and should omit informal and extraneous information. An expert should be aware of the mistakes described above and other superfluous language in a report that could lessen an expert’s credibility. Any appearance of bias can discount the effectiveness of an expert’s testimony or deposition.

Summary
As a testifying expert, extra care should be given to the language used in reports and assumptions made to ensure that any appearance of bias of impartiality is avoided. The perception that an expert witness is anything but objective and impartial can lessen the impact of their testimony. Superfluous language, familiar notes to counsel, and accepting counsel’s “word” rather than verifying information can all lead to the appearance of bias and ultimately result in the trier of fact placing less weight on the expert’s opinion. If a judge or jury does not believe an expert is neutral and impartial, the judge or jury may not believe the expert at all.

Brad Eldridge is managing member at BSE Partners LL; reach him at brad-eldridge@att.net.  Rebekah K. Smith, CFFA , CPA , CVA, is director of financial advisory services at GBQ.  Reach her at rsmith@gbq.com.   This article was originally published in National Litigation Consultants’ Review (NLCR).

The National Association of Certified Valuators and Analysts (NACVA) supports the users of business and intangible asset valuation services and financial forensic services, including damages determinations of all kinds and fraud detection and prevention, by training and certifying financial professionals in these disciplines.

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