How to manage your quantum expert

There are certain business risks and financial pressures that litigators have to keep in mind, now more than ever, when ‘deploying’ expert quantum evidence, which, while valuable to the case, are often time-consuming and costly.

Due diligence

The most obvious business risk is that you instruct the wrong expert and the evidence you need to support your case goes horribly wrong. Add to that the risk that your expert fails to meet the timetabling of your case; not just the timetable for the service of the report, but supplemental reports, replies to questions or the experts’ meeting, and the joint statement.

It is hard enough now getting permission to use an accountancy expert, let alone trying to ‘change horses’, or having to face the consequences of missed deadlines. So make sure you do your due diligence.

I won’t go into detail about the obvious first steps – research, getting CVs, asking around, obtaining a recent redacted report, etc – but would make the point that it is well worth having an initial pre-instruction conversation with your expert, just to ‘size them up’.

When instructing, rather than focussing on how busy the expert is, or on their report lead time, be specific: outline your case, be realistic about problem areas, and test reactions and responses. Of course, it’s important to know rates, instructions balance, and whether they can produce the report within the tight deadlines allowed, but it’s also important to explore other factors. For example, how does the prospective expert manage their caseload, gather financial evidence and extract relevant explanations, from parties, their records and business accountants, etc? What does the expert see as the potential issues and hurdles to ‘getting the job done’?

While it is important to go through the process of agreeing written terms (including how and when the expert will be paid and what happens if the court limits costs), in the current costs pressured climate it is important to get your expert to provide an early estimate of their total costs through to trial.

Gone are the days of the opening question: ‘I need a CPR report, what will it cost?’ Like you, most financial experts sell their professional skills measured by the hour/part-hour and so the time required to do the job, or generated by the litigation process, is almost invariably the unknown factor. So, ask for a time/cost budget broken into component parts – interviews, extracting financial data, analysis, research, reading statements, calculations, drafting report, re-drafting – and that is just the CPR report phase.

The reality is that a significant amount of an expert’s time can be required as the claim develops, with the need for the expert to review an opponent’s report, the experts’ meeting, joint statement process, advising on schedules of loss, and settlement offers, etc. All of these activities need to be budgeted.

But for goodness’ sake don’t stop once you have the budget; as matters progress you need to manage the time, costs and input from the expert. Throughout the process ask for and consider time/cost updates and engage with your expert about how their costs are looking.

An easy way of doing this is to agree the management structure with your expert upfront – agree ‘time allowances’, ‘cost caps’ and scheduled updates as matters progress. However, for that to be workable, you need to be realistic and practical when setting time/costs caps and be prepared to work with the expert if things don’t go according to plan.

Small appetite

Of course, delivering effective expert evidence works both ways. While the expert might gather a raft of excellent explanations, it is vital that those 'gems', the assertions and details, are supported by incorporating them into witness statements. So, keep in touch with your expert and, where appropriate, jointly identify key areas that need to be covered by witness statements. If not, you risk diluting the effectiveness of the expert evidence you have otherwise carefully obtained. 

I have tended to find little appetite for asking questions of experts’ reports (or is this just down to the way cases are timetabled and managed by courts?). However, with pressures against supplemental reporting and further witness statements, carefully crafted CPR part 35.6 questions can make significant inroads towards undermining your opponent’s own expert evidence.

Using your expert, and perhaps counsel, in such an exercise can be cost effective, providing sufficient time is allowed for the process to succeed.

The sequential exchange of expert reports can itself create problems – where major issues and ‘challenges’ have been raised. I question whether leaving the experts to have a ‘dust up’ on the major quantum issues of your case is the best way to present them to the court. However, I appreciate that may be the inevitable consequence of court timetabling.

When instructed by claimants, I have seen key topics raised by the defendant’s expert, or the need for a quantum update (because of the passage of time), create significant extra time and major problems between experts, as well as heated exchanges.

In an ideal world, these issues would be addressed by a supplemental report, however, where permission is not granted, don’t forget that if you act for the claimant you have guidance in your favour. For example, paragraph 71 of CJC Guidance for the Instruction of Experts in Civil Claims 2014 acknowledges that as part of the joint statement the claimant’s expert may need to consider and respond to material information and commentary included within the defendant’s expert’s report.

There may be difficulties, and extra costs created, if an expert completes their report and hears nothing, until suddenly they are required for a meeting of experts, by which stage a potential raft of further evidence has been served, and possibly time has marched on.

It may often be valuable to invite the client to comment on the opposing side’s evidence and then to send the report and such comments as soon as possible to allow your expert more time to think about the best approach in what might be a changed landscape of the case.

Frank discussion

Most solicitors ensure that their expert knows the timetable (seeing the orders can be useful) and has copies of later evidence as it is served. To manage costs, you can always caveat the issue of that later evidence with the instruction ‘this is to be retained and considered at the appropriate time’. Better still, summarise what you are sending the expert and the key points therein, so that the expert is appraised, but doesn’t incur detailed reading costs at that stage.

The advantage of such good communication is that you know that your expert has all of the ‘jigsaw pieces’ and they can advise you on the cost implications of next stages, at a point where they are fully appraised of what is involved.

Perhaps that is a good opportunity to have a frank discussion with your expert about whether a supplemental report may be needed, giving you the time and arguments to seek permission, and even consider amending your costs budget.

Turning to experts meetings, perhaps the best way to manage the fees of experts is to provide an agreed agenda (or even rival agendas). Left to their own devices, experts will naturally discuss all of the topics covered in both of their reports. Is that degree of detail needed?

Where topics are not key to your case, or the parties wish to compromise (or leave a particular issue as a matter of evidence), it will be cost effective for the experts to be guided by an agenda – with specific instructions from both parties to leave certain topics aside.

That said, don’t be misguided by your opponent suggesting an agenda that means that you pass up a right to reply (via your expert) on a point that may have significance.

The reality is that gathering sufficient, relevant details behind a business operation is time consuming, so doing what you can to ease the process along should reap benefits in terms of cost saving.

If your opponent, or their expert’s approach, creates a situation that has cost implications for your own expert, for example, having to address a plethora of newly created quantum scenarios, or simply new evidence, do ‘push back’. Create a trail of objection, set out the cost implications and retain the documentation.

If significant, then, once again, you may wish to revert back to the court in terms of your costs budget. This is where good communication with your expert pays off, as they can highlight such areas as they arise and then add weight to your eventual costs arguments.

Unfortunately, you cannot now avoid taking an active interest in your expert’s approach, their gathering of the required evidence and, ultimately, their time and costs. SJ

Richard Formby is an accountancy expert witness and partner at Monahans Chartered Accountants