Cross-examining the defense economist.

Development of a damage theory must be well grounded in basic economic principles. If it is not, cross-examining the defense economist will be extremely difficult.

Preparing for the cross-examination of a defense expert economist generally begins with the selection of the plaintiff's own economist. Of course, this decision involves determining whether the plaintiff should even retain an economist to assist in presenting the damage claim. If counsel decides to retain one--whether in a personal injury or business loss case--the defendant will almost always follow suit. Unfortunately, the reverse is not always true. If counsel decides not to use an expert, there is no guarantee the defense will do the same.

If a case warrants retaining an economist, counsel should try to locate one who has previously testified or at least been employed by the defendant's counsel or the defendant's insurance company. This will make it extremely difficult for defense counsel to attack the expert's credentials generally. However, plaintiff counsel should carefully review the work and opinions the expert provided to defense counsel to avoid conflicts with the opinions and assumptions in the pending case.

The plaintiff's theory of damages will have a major impact on the position taken by the defense's economic expert. If the defense receives the plaintiff's expert report before receiving the report of the defense expert, then the defense expert's initial job may be simply to review and comment on the opinions of the plaintiff's expert.

The plaintiff's damage theory may be heavily influenced by the elements of damage that are recoverable under case law or statute, or it may be dictated by unique facts about the plaintiff, but it must take both into account.

For example, in a wrongful death case, the statute will define the elements of economic damage that are recoverable, such as loss of support to dependents and loss of net accumulations to the estate. These are damages that will customarily require expert testimony. If the deceased was a small-business owner, an expert may also need to develop a theory regarding the potential earning capacity of the business to evaluate the loss of net accumulations to the estate. Either way, the defense expert can be expected to address the plaintiff's theory.

Discovery and pre-trial preparation

There are two basic approaches to the exchange of information about expert opinions developed in anticipation of trial testimony. The first may be characterized as the "I will provide you my expert report at the earliest possible point in the lawsuit or even before the lawsuit if I have it" approach. The second may be characterized as the "You show me yours, and I'll show you mine" approach.

Neither approach is wrong. Which one to use depends on several points, including plaintiff counsel's style and reputation; defense counsel's style and reputation; the insurance company or defendant; local rules and court procedures; strength of the plaintiff's case; and plaintiff's ability to develop a damage theory and facts early.

Counsel may decide to present the plaintiff economist's report before receiving the defendant's report or fight for simultaneous disclosure. The author prefers to submit written interrogatories and try to force the defendant to submit answers before taking the opposing expert's deposition. The rules of procedure in some states still require the use of expert interrogatories before deposition.

In many jurisdictions, it has become customary to simply exchange names of experts for deposition without prior exchange of written interrogatory answers or reports. The fact that the rules of procedure permit using depositions without first using interrogatories does not mean that it is necessary to skip the interrogatories. Having some explanation of the opposing expert's opinions and the grounds for them in writing will help in the preparation for and conduct of an effective deposition.

It is difficult to effectively depose an economist or accountant because of the contradictory nature of the proceeding. In many jurisdictions, an expert's deposition transcript may be read to the jury regardless of the witness's availability to testify at trial.

As a result, even if plaintiff counsel takes the "perfect" deposition--exploring at length the expert's qualifications, the materials reviewed and relied upon, the methodology employed, the opinions reached, and the grounds for those opinions--that expert may never appear at the actual trial.

Instead, counsel may end up watching helplessly while a good-looking member of opposing counsel's law firm takes the witness stand and reads the testimony of the expert--without cross-examination. Thus, plaintiff counsel must ensure that the deposition transcript does not "read" too well.

It is clear that effectively deposing a well-qualified and well-prepared economist or accountant requires extensive preparation. However, it is equally important that counsel is able to ask "innocent" questions and "listen" to the answers. It does not help to take the deposition and then refuse to ask the questions that will elicit the most damaging expert opinions and theories against the plaintiff's own damage theories.

The author's favorite question to ask of any expert in a deposition is, "Why is that?" This query invites an academic lecture and allows the author to sit back and listen carefully to all aspects of the expert's opinions and assumptions. Sometimes, the author will also ask the same question many times.

Counsel should be receptive to learning about the weaknesses in the plaintiff's case and theory of damages. If it becomes apparent during the deposition that the defense has developed a strong theory to counter the plaintiff's, there is usually time to make strategic changes in the damage theory.

A word of caution. An overly effective interrogation of the opposing expert may lead to better preparation by that witness for trial, or worse, to the retention of a substitute expert.

Simply stated, the "perfect" deposition of the expert economist will

* reveal every opinion the expert is prepared to express at trial;

* reveal all the grounds and assumptions supporting those opinions;

* commit the expert to "final" opinions without the need for further preparation;

* do sufficient damage to those opinions or the expert's credibility so that the transcript is not "readable" at trial; and

* do all of the above without causing the defendant to trash the expert and find a better one.

It would also be nice to learn whether the expert is willing to concede anything that will be helpful to the plaintiff's own theory, although this is no minor task.

As a pre-trial checklist, plaintiff counsel should investigate the defense economist in the following areas:

Qualifications and scope of expertise. This includes comparing and contrasting the education, work experience, and practical experience of the defense expert with that of the plaintiff's expert. Counsel should understand the difference between accountants and economists and the legitimate range of opinions for each, as well as determine whether the expert stays current in his or her field.

The scope of the person's expertise is also critical. Some economists will include opinions--either explicitly or implicitly--that have a medical or an occupational component even though these experts are not qualified to do so.

Compensation. The defendant may have paid such an outrageous amount for the expert's services that the jury will be appalled. However, it is more likely that an investigation of compensation will simply help the jury understand that the defendant is willing to spend a significant amount of money to defend the claim.

Bias. There are several potential areas to probe for possible bias. Does the expert have a relationship with counsel or the defendant other than the one involving this lawsuit? Is there anything about the financial arrangement for the current case or past cases that might reflect poorly on the independence of the expert? Is the expert employed other than as an expert in litigation? Does the expert exhibit a bias that reflects an orientation toward either plaintiffs or defendants generally?

Resources. Even though it is rarely worthwhile to review every single document in the expert's file during deposition, plaintiff counsel should obtain copies of all file materials.

Plaintiff counsel should probe for indications the expert only selectively reviewed data in forming opinions. Did defense counsel decide what information the expert would review? What sources for statistical assumptions or other data did the expert base his or her calculations on? Was any critical information overlooked? If it was, counsel should not necessarily point this out at deposition because this will tip off defense counsel about a weakness in the expert's testimony that plaintiff's counsel can exploit at trial.

Commitment to final opinions. The expert should be "pinned down" during discovery to clearly expose the data and assumptions that are critical to support his or her final opinions. One problem with the "you show me yours, and I'll show you mine" approach to discovery of expert opinions is that it invites experts to claim they have not been able to complete their investigation and reach final opinions.

Preparation for cross

Effective cross-examination of an opposing economist requires preparation that begins before voir dire. For example, the decision concerning where the expert is going to fit in the case is critical. If counsel anticipates that the defense will focus on damages and highlight the defense economist's testimony, it is important to begin addressing that expert with the jury during voir dire. Doing so alerts the panel to both the defense's strategy and plaintiff counsel's intention to challenge it.

When the opposing economist's testimony helps the plaintiff's case, it is important to let the jury know this. During opening statement, counsel can summarize helpful segments from the deposition testimony and attribute them to the defense economist. During a recess or sidebar, counsel can usually persuade defense counsel to have the expert testify by explaining that if the expert does not, the plaintiff-friendly parts of the deposition will be introduced into evidence anyway during the plaintiff's case in chief.

Though it is generally improper to ask one expert to comment on the anticipated testimony of another expert, it is permissible to frame questions on direct examination in a way that anticipates a defense economist's opinions. It is also appropriate to elicit responses that rebut those opinions or the assumptions on which they are based.

A note about summary exhibits arid demonstrative evidence is in order. In most jurisdictions, properly authenticated summary exhibits and graphs or charts depicting summary information are admissible and may be taken into the jury room. But demonstrative exhibits are usually not admissible and do not go with the jury into deliberations. With multimedia and graphic software now readily available and easy to use, it is possible to revise demonstrative and even summary evidence "on the fly" as expert opinions are subjected to cross-examination.

Preparation for cross-examining the defense economist follows the same basic rules as for any other cross. Most important, cross should be conducted with a purpose in mind. Counsel should decide in advance whether the expert's testimony has benefitted plaintiff's case enough to justify preserving the expert's credibility.

If the testimony has not been helpful, counsel must decide whether the attempt to impeach will be based on credentials, bias, assumptions, or the opinions themselves. Impeachment may have more than one basis, but each attack should be consistent with the others.

When organizing for cross, the notebook approach--whether with a conventional notebook or a computer-based notebook--is an excellent one. Of course, the notebook should contain the deposition transcript, the exhibits, the expert report or interrogatory answers, and any relevant source materials.

If plaintiff counsel suspects the expert's demeanor will change significantly between deposition and the trial and has videotaped the deposition, it can be digitally synchronized with the transcript and effectively used on cross. New software allows effective editing to be done in-house.

Counsel should outline the cross by subject area, with references to either the sections of the report or page-line sections of the deposition transcript. Doing so makes it is easy to find the disputed points during the heat of questioning. Subject areas should be organized so that cross opens and closes on a strong note. If obtaining concessions that bolster the plaintiff's case is a goal, this should be completed before attacking the expert's credibility.

Counsel should avoid writing out questions unless they are short and consist of precise quotes from prior testimony or reports. In general, cross-examination should be organized around the plan of attack. If the defense expert is a combative witness, counsel should include plenty of direct quotes from prior sworn testimony to use in cross. If the witness will grant a number of concessions regarding preliminary matters, counsel may choose to obtain all those concessions and not ask about them during cross but attack the expert's conclusion during summation.

The 1992 cumulative supplement of an excellent book by Douglas Danner, Expert Witness Checklists, addresses the economic loss expert. Although the book is defense-oriented in its approach to cross-examination, its advice can apply to preparing for plaintiff's cross of a defense economist.

Danner identifies the following questions underlying any economic projection as potential components of a successful cross-examination.

* How did the expert determine what the rate of inflation would be 10, 20, 30, or more years from now?

* How did the expert determine what discount rate to apply to determine present value?

* Are the expert's calculations of future damages based on published economic data and forecasts?

* Have appropriate adjustments been made from projected earnings to accurately reflect the plaintiff's personal consumption habits?

Some down-to-earth methods for exploiting the assumptions inherent in any economic projection should be considered in preparing for cross. For example, the actual increase in the cost of certain products from 1970 to 1997 will present a reasonable picture of inflation. (Assuming a 4 percent per year inflation rate, a Cadillac that cost $7,000 in 1970 would cost $20,180 in 1997.)

One last cross-examination technique is to raise the probability computation. Although there is a high probability that each assumption underlying the economist's opinion will be correct, he or she will be forced to concede that the aggregate probability that all the projections will be accurate is significantly smaller.

To illustrate this point, Danner uses the following example. If an economist asserts that there is a 90 percent chance that a given discount rate is correct, an 80 percent probability that inflation will rise to a certain level, and an 80 percent chance of the likelihood of the plaintiff working X number of years, the probability of all three of these events occurring simultaneously is only 58 percent.

Conduct during cross

As Professor Irving Younger used to say, cross-examination is not a science, it is an art. While there are tools that can be learned, there is also a certain intrinsic flair for cross that Younger used to say "makes a Rembrandt distinctly a Rembrandt."

Great cross-examiners possess that flair. It comes from their intellect; ability to use language; physical presence; and intuitive ability to sense deception and to read reactions of witnesses and observers, particularly those of the jurors.

The best cross-examiners employ a range of demeanors--self-deprecating and understated, courteous and professional, firm and aggressive, and sarcastic. No single demeanor is appropriate for every cross-examination of an opposing expert. If the economist is pompous, it may be acceptable to assume an aggressive or even sarcastic demeanor. If the economist is low key, this approach might court disaster.

Demeanor will also dictate the position of the examiner and of any props. If the expert has been especially good at speaking directly to the jury and the jury seems to have been receptive, it may be necessary to interrogate from a position that requires the witness to look away from jurors, if that option is available in the jurisdiction. If the witness was adept at using a demonstrative exhibit to explain his or her testimony, counsel may want to take over the pointing and keep the witness in the chair.

Whatever location and demeanor counsel adopts should be with the jurors in mind. Are they looking at the witness? Are they making eye contact with counsel? Are they paying close attention to the exhibits? Although there are no inflexible rules with respect to demeanor and physical presence, counsel should not downplay their significance or ignore them.

Most authorities agree that effective cross-examination should be short. But the length must be dictated by the length and scope of the expert's direct examination.

The following "cookie cutter" approach works well when cross-examining a defense economist:

* Elicit testimony that is favorable to the plaintiff's damage theory or to underlying assumptions that support the plaintiff's theory;

* Elicit opinions that are in conflict with opinions expressed by any other defense expert or that would undermine the assumptions critical to any opinion expressed by any of these experts;

* Attack faulty opinions by revising the facts underlying hypotheticals or by using examples; and

* Attack the expert's credibility.

Clearly, effective cross-examination of the defense economist is critical to the outcome of the case. It can also be satisfying if it is done well.