Understanding the Use of Experts in Modern Commercial Litigation

Your company has decided that it must file a lawsuit against a former employee turned competitor in order to recover the business losses you have been suffering since his defection. Or even worse, your company has just been served with a summons and complaint in which the plaintiff has claimed damages for its business losses.

It’s a bad day.

Your company has decided that it must file a lawsuit against a former employee turned competitor in order to recover the business losses you have been suffering since his defection. Or even worse, your company has just been served with a summons and complaint in which the plaintiff has claimed damages for its business losses.

Either way, you have to get an attorney involved. However, it is becoming more and more likely that you will also have to retain an expert. And experts are not cheap. Clearly, you need to be prepared to expect the unexpected: the need to hire an expert witness.

In light of this trend in modern commercial litigation, it is imperative that a business have a good understanding of the nature of expert witnesses, the services they can effectively provide, and the reasonable costs to expect for their services. This knowledge can drastically change how a business proceeds with litigation.

Lay vs. Expert Witnesses

What exactly is an expert witness? The law generally divides witnesses into two categories: fact witnesses and opinion witnesses. Expert witnesses fall into the latter.

Fact witnesses are those individuals who can provide testimony about those things of which they have firsthand knowledge: things they have heard, things they have seen, things they have said. Fact witnesses thus have an intimate and personal familiarity with the events about which they will testify.

Opinion witnesses provide their opinions about certain events to the trier of fact, such as a jury or to the court at a bench trial, in order to assist in resolving the case. Opinion witnesses fall into two categories: lay and expert.

A lay opinion witness may only provide his opinion upon a demonstration of the following: that his opinion is rationally based on the perception of the witness, that his opinion is helpful to a clear understanding of the witness’s testimony or the determination of a fact in issue, and that his opinion is not based upon scientific, technical or other specialized knowledge.

This legalistic formulation means one thing: a lay witness may only provide his opinion about things which he has personally witnessed and about which the average, reasonable person could also form an opinion. Thus, a lay witness can testify about whether he believes a car he saw drive through a red light was speeding at the time. Conversely, a lay witness is barred from providing his opinion about whether the speeding car had a design defect.

An expert opinion witness is very different. Such a witness does not have to have firsthand knowledge of the facts which form the basis of his opinion: he does not need to have personally witnessed the car drive through the red light in order to form his opinion on whether the car was speeding. Instead, his testimony is admissible if the testimony is based upon sufficient facts or data, the testimony is the product of reliable principles and methods, and the witness has applied the principles and methods reliably to the facts of the case. Moreover, the witness must be qualified as an expert by knowledge, skill, experience, training or education.

What does this all mean? Essentially, an expert witness has to know something that the average man on the street does not. And he has to use that knowledge to form his opinion on the facts presented in the case.

To Testify Or Not To Testify

Experts perform two very important, related purposes and come in two forms: testifying and non-testifying experts. The role of the testifying expert is to formulate an understandable opinion in order to help the trier of fact reach the same conclusion as the expert. The function of the non-testifying expert is to assist you and your attorney to better understand your case and better prepare for trial.

The different functions also have significant legal consequences. As a non-testifying expert, the expert actually becomes part of your legal team. He is an advisor to you and your attorney. Because he is retained to assist in litigation, he becomes subject to and protected by various privileges and immunities. Accordingly, his conversations with you and your attorney are generally protected. Moreover, the materials he prepares for the lawsuit are generally immune from production. Thus, you and your attorney can freely discuss the case with a non-testifying expert, and the existence of such an expert can remain hidden from your adversary in most situations.

A testifying expert is very different. Although he is often viewed as a member of the legal team, the law treats him very differently. First, his existence must generally be disclosed to the other side. Second, the expert is generally required to prepare and sign a report containing a complete statement of his opinions to which he will testify and the basis for his opinions. Third, he must disclose all of the facts, data and documents upon which he relied to form his opinions and to prepare his report. Fourth, he must be prepared to inform your adversary of his qualifications and to provide a list of the cases in which he has recently testified. Finally, he must be prepared to disclose his compensation for serving as your testifying expert.

Because of the distinct roles they play, potential experts fill these needs differently. A testifying expert needs to be able to articulate his thoughts and opinions clearly and simply. He needs to have the skills of a teacher and educator, a mentor to the court and the jury. He must be patient and be able to think through the questions posed by your adversary. He must be able to speak with confidence but not appear cocky or egocentric. He must be a good listener and appear thoughtful. He does not need to be the smartest or the brightest “star” in his field’s sky, but he must be competent and clear.

A non-testifying expert does not generally need the qualities sought in his testifying counterpart. That is not to say that those qualities are not welcomed; they simply are not necessary for his function. His demeanor and ability to connect with a jury or judge are irrelevant. Instead, his knowledge and experience are of more importance. His ability to analyze the data and help prepare you and your attorney for depositions and trial is paramount. And his ability to be candid in evaluating the case is essential.

Affirmative and Rebuttal Expert Witnesses: An Additional Distinction

Unfortunately, the distinction between experts does not end with the differences described above. The law also distinguishes between two types of testifying experts: affirmative experts and rebuttal experts.

Affirmative experts are used to provide testimony on those factual issues for which you bear the burden of proof. For example, as the plaintiff in an antitrust price-fixing case, you might use an affirmative expert witness to demonstrate that the defendants’ agreement to set prices did, in fact, affect the market. Because you bear the burden of proof on this issue and because you are using this testimony in your case in chief, the expert would be considered an affirmative expert witness.


Affirmative experts can also be used by a defendant in asserting his affirmative defenses. These are not factual defenses (in other words, the defendant is not claiming that the facts as presented by the plaintiff are false), but are legal defenses, intended to bar even claims that would otherwise be factually and legally valid. For example, a common affirmative defense is a claim that the plaintiff failed to mitigate his damages. The defendant must demonstrate what the plaintiff could and should have done to limit his damages, and experts are often used in this context.

Rebuttal experts serve a very different purpose. A rebuttal expert is used essentially to contradict the opinions reached by an affirmative expert. Accordingly, a rebuttal expert seeks to demonstrate any incorrect and inaccurate methods used by the affirmative expert and to point out other methods or theories which the affirmative expert failed to consider. A rebuttal expert often points out facts which the affirmative expert has failed to analyze. Many times, but not always, he also offers his own opinion contrary to that of the affirmative expert. Basically, the rebuttal expert’s purpose is to convince the jury and the judge that they should reject the opinion of the affirmative expert and reach an alternative conclusion.

A rebuttal expert is sometimes employed when there is no affirmative expert at all. In those rare situations, the rebuttal expert’s testimony may be used generally to attack your adversary’s theory of the case. Although rarely used, this can be an effective strategy under the right circumstances.

Unfortunately, your need for a rebuttal expert is often determined by your adversary’s desire to hire an affirmative expert. If that occurs, you will be faced with the choice either to retain a rebuttal expert or to find some other means to limit the effect of your adversary’s expert. Either way, litigation costs are likely to increase.

For the commercial client, an interesting point of the survey on page 8 is that of the 297 trials with experts, over 22 percent of them involved business or commercial experts.

Experts are providing testimony on a wide range of commercial topics. For example, it is not uncommon for experts to testify regarding the “usage of trade” such as the way a particular industry generally interprets particular contract language or generally conducts its affairs. Experts are often used to engage in a forensic accounting. And, naturally, experts are used to determine commercial damages including lost profits, extended overhead charges and diminution in value of goodwill and other business assets.

All in all, expert witnesses are becoming more and more common. Although they can add great benefits to a case by better focusing the issues and ensuring that the attorneys better understand those issues, they can also greatly increase the costs. Not only will you have another set of professional fees to cover, but your adversary’s experts can often cost you time and money as you attempt to point out and correct the flaws in their analyses.

One thing is clear–as a commercial litigant, you need to be prepared for the unexpected issues that surround expert testimony.

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