Parties in a dispute risk losing the benefits of their independent witnesses if they are not properly prepared, in-house lawyers told
The use of expert witnesses can be advantageous in both court hearings and arbitrations, in-house lawyers heard at a recent meeting of Iberian Lawyers´ In-House Club, but only once a business has a clear understanding of the challenges and strategic objectives of their case.
Over 40 arbitration experts and Heads of Legal attended the Madrid event, which was moderated by Gamesa Head of Legal Iñigo Cisneros and Pablo Bernad, who leads the KPMG EMEA Forensic team.
Parties in dispute need to be very aware of why and when they require expert witnesses, suggested Bernardo Cremades of Madrid’s Cremades & Asociad
os. “Parties need to carefully analyse the strengths of their case and decide their strategic direction before selecting and instructing any expert witnesses.”
For other participants, the incorrect use of experts could in fact be counter productive to a case. Speaking from her experience as Legal Counsel of the Madrid Court of Arbitration, Elena Gutiérrez suggested that some parties are guilty of bringing too many witnesses to the tribunal, some of whom may be providing overlapping evidence which inevitably lessens their credibility.
Participants also shared some of their experiences of the inefficient and ineffective use of experts. As others suggested, the benefits of using experts would be lost if not appropriately approached.
Cisneros sees the benefit in parties discussing in advance which are the contentious and non-contentious issues, clearly defining where they agreed and disagreed and, where appropriate, jointly appointing an expert who will report only on the disputed issues.
For arbitrator Miguel Ángel Ballesteros this can be a very useful and cost-effective approach, avoiding the scenario whereby the arbitrators are faced with two competing, and contradictory, expert reports.
Others felt however that it is the arbitrators’ role to get to the root of the question in dispute and not to rely on third-party experts – arbitrators often find themselves in a difficult position when facing two sets of expert witnesses with opposing views.
In Spain, not all arbitrators are accustomed to cross-examining witnesses, believes David Arias of Madrid-based Pérez-Llorca. This contrasts with Anglo-Saxon approaches where the views of experts are more readily compared and contrasted.
Once however the decision has been made to use expert witnesses, the selection process is very important, participants heard. It is crucial that an expert must be objective and truly above the
personal needs of the party that instructed them.
For Fernando Cuñado, a Director in KPMG’s Madrid-based EMEA Forensic Dispute Advisory Services Group, the growing complexity of business relations and of accounting principles to be applied in the valuation of more sophisticated structures demands ever more detailed analysis when disputes arise.
“The involvement of independent experts from the outset can help to focus strategies – the most significant legal issues may not always reflect the most important financial questions. As a result, we are getting involved much earlier in disputes.”
For Juan Fernández-Armesto, an arbitrator and former President of Spain’s Securities Commission, the ideal is to place an argument on the table, without any excessive explanation, which the arbitrators can themselves pick up and develop.
“The relationship between the party and their expert witness is key in any case. Effort must therefore be made in selecting the best person and working with them very closely,” said José Antonio Caínzos from Clifford Chance. “It is not just about using famous brands or names, any judge or arbitrator will be able to value the standing of the individual in front of them and the quality of the report.”
“The key is for parties to discuss in advance the issues they do or do not agree on, and only seek expert witnesses on the matters in dispute,” said Pedro Requena, Senior Legal Counsel at Nokia Siemens Networks.