Ten Reasons for Hiring a Damages Expert Before Mediation

August 24, 2017

Written by Lynsey Honegger:

Having recently served as a consulting expert in several cases prior to mediation, I have been reminded just how beneficial it can be to everyone when a damages expert is involved early on in the dispute process. Listed below are 10 reasons for hiring a damages expert before mediation:

1. Answer the question – How much is the case worth?
This is the question that every client wants to know the answer to before starting down the long, expensive road of litigation. Having at least a preliminary answer to this question can help determine how to approach the case. It may influence the dispute resolution method, the size of the legal team, the client’s willingness to settle, the volume and type of discovery requested and the proposed case schedule. The answer can also be essential for an attorney or law firm when deciding whether to accept a case with a contingent fee arrangement.

2. Get assistance framing the issues of the case
Involving a damages expert early will help with the accuracy and efficiency of the case development. An expert can provide significant assistance in developing case strategy by identifying potential damage categories that neither the legal team nor the client may have considered. Also, experts typically have considerable experience effectively presenting damages issues to the trier of fact, thus they can be a valuable asset as the pleadings are drafted. Additionally, a damages expert may be able to recommend other types of experts that would help support the client’s damages theory (e.g. marketing expert, real estate expert, etc.).

3. Have the opposing damages theory evaluated
It can be a daunting task to interpret the opposing party’s damages claims or defenses. An expert can oftentimes provide significant assistance with trying to make sense of the little information often available in the early stages of disputes. Even with limited information, they may be able to identify methodological flaws, unreasonable assumptions, a lack of nexus between the allegations and damages, problems with the damages time periods or a failure to account for mitigation. Having an understanding of the opposing party’s strengths and weaknesses will be extremely valuable for mediation, settlement talks, pleadings and motions.

4. Propose a defensible settlement offer
A settlement offer put forth by the client will carry more weight if it was created using a sound methodology and reasonable assumptions. Although early in a case only limited discovery may be available, an experienced expert can typically still prepare a calculation that evaluates many of the factors that would eventually be analyzed in a formal expert opinion. An expert can also provide the legal team and client insight regarding speculative assumptions or projections that would likely not be conducive to a reasonable settlement offer. Using an expert to prepare a logical, credible and well-supported analysis that can be presented to the opposing party will only increase the likelihood of the case settling sooner rather than later, saving the client time and money.

5. Have a financial resource at your fingertips
Unless the legal team has experience or education in accounting, finance or economics, they will likely have questions in these areas when reviewing discovery or preparing pleadings and motions related to damages. An expert can be an effective and efficient resource for finding books, articles, treatises, guidelines and standards related to the financial topics at issue in the case. Damages experts typically have financial resources readily available that are frequently used in litigation.

6. Create targeted discovery
An expert can focus discovery requests and deposition questions on the core damages issues in the case. Allowing an expert to request exactly what is needed from the opposing side to perform a well-supported damages calculation will save the legal team and the expert a lot of unnecessary stress when it comes time for expert reports and testimony. With the number of motions in limine and Daubert motions filed to preclude damages experts’ testimony, it is in the best interest of the legal team and the client to make sure the testifying expert is able to rely on sufficient facts or data. Additionally, having an expert draft deposition questions can help the legal team efficiently prepare for depositions and increase the likelihood of getting witnesses to provide the testimony that best supports the client’s damages theory.

7. Get help organizing and interpreting large amounts of data
In many cases, discovery related to damages is delivered in large electronic files or databases. Using an expert to organize and interpret the data can save the legal team time and the client money. Also, any work the legal team performs with the data that is later relied upon by the expert will need to be verified by the expert for accuracy, which usually takes just as much time, if not more, than just having the expert initially perform the work. Once familiar with the data, the expert will be able to easily perform updated calculations requested by the legal team or the client to incorporate changing assumptions or data as the case progresses.

8. Interview your potential testifying expert
Using a consulting expert early in a case is a great way to interview a potential testifying expert. Working closely with an expert will give insight into how familiar they are with the data and issues in the case and the quality of their work product. Also, it will give the legal team a chance to evaluate how the expert will likely handle themselves while testifying in deposition or before the trier of fact.

9. Avoid fire drills
Oftentimes, damages experts are retained to meet a disclosure deadline set by the court, after the pleadings have been filed, the issues have been framed, and discovery has commenced. However, the longer an expert has to get familiar with the case, the better it will be for the client. Waiting until the last minute to hire an expert can result in inadequate discovery, something getting missed or an expert opinion that is not fully vetted. Additionally, performing the required work in a limited amount of time can result in much higher expert fees. The legal team may need to explain to the client that hiring an expert early on is a worthwhile investment – one that promotes efficient, more informed decisions.

10. Have the expert help present during mediation
Having an expert present at mediation can be extremely helpful to both the legal team and the mediator. In many cases, mediations are focused on damages issues, so it makes sense to have a damages expert attend. Just like at a trial, the expert can be used to explain complicated damages issues in a manner that can be easily understood. Moreover, the expert can readily answer questions put forth by the mediator or help explain the flaws in the damage theories put forth by the opposing party. Having the expert attend the mediation also allows for real-time updates to damages calculations to account for any new information or data that becomes available during the mediation.

Retaining a damages expert before mediation can benefit the legal team and the client in many ways. The expert can help determine the potential value of the case, consider how damages issues will impact case strategy, request relevant discovery, and assist in getting the case settled. Waiting to hire a damages expert until the last minute, however, could result in a missed opportunity to win or settle a case.

Lynsey Honegger is a Director at Davis & Hosfield Consulting LLC. She provides damages related expert testimony and consulting services to a wide variety of clients. Her work has involved breach of contract, breach of fiduciary duty, false advertising, personal injury, fraud and patent infringement claims, among others. Specifically, she has conducted complex financial analyses involving business valuations, lost profits, reasonable royalties, disgorgement, lost wages, commercial success, and stock investment performance for both plaintiffs and defendants.

Contact Lynsey at 312-506-1508 or lhonegger@dhllc.com.