Construction companies often retain the services of consultants/experts to assist in preparing a claim or in presenting a dispute in court or arbitration. The range of services offered is extensive. Almost all bar journals and trade magazines carry advertisements for expert advice and testimony.
Under the Federal Rules of Evidence, Rule 702, the definition of an expert is fairly broad. An “expert” is a person who, based on education, experience, skill or training “will assist the trier of fact to understand the evidence or to determine a fact in issue.” The “trier of fact” is a judge, jury or arbitrator.
In construction litigation, experts are often retained to present testimony on scheduling analysis, costing analysis, labor productivity losses, estimating, quality of installation, etc.
For years, the courts found it sufficient that the person being qualified as an expert was experienced in the particular area in which he or she would be giving an opinion. Someone who joined a consulting firm with no technical background, no field experience and no advanced degree could still be accepted as an expert in court because of the experience he or she had gained with the consulting firm. The rules are changing.
The new rule
There have been discredited productivity studies and discredited critical path method (CPM) analyses. For defective construction claims, there have been unsubstantiated theories of cause and effect and inflated repair estimates. The courts are now trying to take some control over this proliferation of consultants’ studies and expert testimony.
Rule 702 on experts (Federal Rules of Evidence) was amended by Congress in 2000. In an effort to put some reins on the use of experts, Congress created an environment where an “expert” may not be permitted to testify.
The new rule states:
“If scientific, technical or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training or education may testify thereto in the form of an opinion or otherwise, if
(1) the testimony is based upon sufficient facts or data,
(2) the testimony is the product of reliable principles and methods, and
(3) the witness has applied the principles and methods reliably to the facts of the case.”
What does this mean? Let’s look at the cases.
• What can an expert say?
The whole foundation of expert testimony is hearsay and opinion. The consultant reviews documentation, interviews fact witnesses and comes up with an analysis of what happened and what went wrong. “[T]o be reliable, expert testimony must be based on sufficient facts or data … The trial court’s task is to make certain that an
expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level
of intellectual rigor that characterizes the practice of an expert in the relevant field.” Lippe, et al. v. Bairnco Corp., 96 Civ. 7600 (S.D.N.Y. 2003).
• What can exclude an expert?
In the Bairnco case, the corporation, faced with a number of lawsuits, transferred its business to a new entity and then filed for bankruptcy. This is a popular, though arguably immoral, tactic.
The unhappy plaintiffs/creditors tried to prove that the transfer of corporate assets was fraudulent and hired three experts: a law professor, a finance professor and an investment banker. None of the experts was allowed to testify.
The court ruled that the proposed expert testimony was speculative, unrealistic and contradictory. The judge wrote: “I am convinced that [the experts] had only one goal in mind—to come up with conclusions that would support plaintiffs’ positions in the case, and they were determined to get to that point any way they could.”
Unfortunately for the plaintiffs who had hired the experts and had relied on their being able to testify for them at the trial, this decision came after years of pre-trial efforts.
Here is a case to note well: Trigon Insurance Co. v. United States, 204 F.R.D. 277 (E.D. Va. 2001). It is common for an expert to prepare drafts of his report on computer and then update the drafts based on new information without saving what was typed previously. This practice is unacceptable in court. In the Trigon case, the court found that the “destruction” (spoliation) of the drafts was improper.
Specifically, the court ruled:
“[T]he basic precepts of the Federal Rules of Civil Procedure relating to the work of testifying experts require, on this record, the retention and production of draft reports and the correspondence reviewed by the testifying expert.”
The court in the Trigon case did not disqualify the expert. However, the judge allowed negative inferences to be drawn at trial, because of the spoliation. Depending on what those negative inferences are, disqualification may have been a less painful route.
There are true experts out there who can help your case and, indeed, may be critical to your proof. My experience in trial work has taught me, however, that my own clients are the best experts.
An experienced electrical contractor can explain a bid, if that is an issue. He or she can summarize daily reports, weekly meeting minutes and other data and present the summaries in graphic form.
The Federal Rules of Evidence allow you to give your own opinions, so long as they are based on firsthand knowledge and experience. The downside risk is that the trier of fact may presume that the opinion is biased, but that possible presumption can be addressed.
If you hire a consultant, make certain that he or she can qualify as an expert in the event of litigation. Your attorney should be up to date on recent case law developments on admissibility of expert testimony. Without proper preparation on the law, your expert may not be able to testify for you. EC