Objectivus Expert Witness Services
Part I (of IV)
The role of an expert witness is critical in modern litigation, particularly in cases involving financial regulatory disputes, fraud, or complex transactions. However, as the scope and complexity of such cases expand, a fundamental question arises: can one individual realistically serve as an expert in multiple aspects of a case? This challenge is particularly evident in both recent and ongoing high-profile, complex trials involving allegations such as market-rigging of interest rate benchmarks and “Cum-Ex” dividend arbitrage trading. Our experience in such cases, across multiple jurisdictions, offers a more nuanced perspective on effectively utilising expertise in the courtroom.
The Complexity of Modern Financial Trials
In these financial “super-trials”, the complexity of the underlying issues can be staggering. Such trials require the court to understand many issues, which may include tax law, cross-border financial transactions, complex trading strategies, financial market infrastructure, trading software and information providers, compliance and regulatory frameworks, forensic accounting and accepted market practice. It is exceedingly rare for an individual expert to possess the depth and breadth of knowledge necessary to comprehensively address such an array of subjects. Even the most qualified professionals typically specialise in only one or two areas.
Traditionally, expert opinions were often provided by academics or generalist consultants, but there is now a growing emphasis on engaging ex-practitioners to offer insights into market practices, which are invaluable to both lawyers and their clients. The emergence of this ‘market practice expert’ is a relatively recent phenomenon and in this series of blog posts we delve deeper into the role, challenges and potential improvements of how such experts might be utilised.
The Limitations of the Single Expert Model
We understand that the standard model of relying on a single expert witness has its strengths, particularly in terms of clarity and accountability. A lone expert is easier to cross-examine and can provide a unified narrative for the court. However, we believe this model also has significant limitations. Taking the “Cum-Ex” trials as an example and concentrating solely on what may be considered as the ‘market practice’ element of the case (which may appear on the face of it to be a narrow definition), expertise would be required on the following topics: dividend arbitrage, derivatives pricing, double tax treaties, equity market infrastructure, stock borrowing and lending, custody chains, middle and back-office procedures, KYC and AML checks, as well as thorough knowledge of specific EU Regulations and the FCA Handbook.
As a result, several issues can arise over the course of an expert’s engagement.
- Overextension of Expertise: Experienced cross-examiners may seek to highlight instances where the expert has ventured beyond their area of expertise or drawn conclusions that lack a solid foundation. Such tactics can weaken the credibility of the expert’s testimony and influence the court’s perception of the reliability of their opinions.
- Practical Constraints: Preparing for cross-examination on a broad range of topics is an enormous burden for a single individual. The risk of being discredited on a tangential issue increases significantly.
- Data Management Challenges: The sheer scale of analysis, such as sifting through data rooms containing millions of documents further strain the capabilities of a single expert to be able to respond to precise, detailed cross-examination.
These challenges underscore the potential for errors or omissions, even with the most diligent experts.
Teamwork in Expert Testimony
Therefore, the question arises: should courts permit or even encourage the use of expert teams to ensure all facets of a case are addressed? Instead of relying on a single individual, a team of specialists can divide responsibilities according to their expertise. For example, in this case:
- a derivatives trader could simplify and add clarity to complex trading strategies;
- an experienced custodian could provide the necessary insight into chains of custody; and
- a compliance specialist could evaluate adherence to local and cross-border regulations
By pooling knowledge, such teams can offer a more robust and reliable testimony. However, we recognise the use of expert teams presents its own challenges, in particular for the courts who must consider questions of admissibility and coordination, thereby requiring effective collaboration and clear delineation of responsibilities.
Court Recognition of the Role of Research and Collaboration
Even when a single expert is engaged, extensive research and collaboration are often required to fill knowledge gaps. Many experts rely on their networks or employ assistants to help navigate data rooms, interpret industry-specific nuances and validate findings. This team effort behind the scenes is rarely visible in court but is crucial to delivering credible testimony.
The reality is that no expert operates in isolation. Whether through formal teams or informal support networks, collaboration is a cornerstone of effective expert testimony. Acknowledging this fact could lead to more transparent and effective practices in the courtroom.
Cross-Examination Challenges
Cross-examination is arguably the most demanding aspect of being an expert witness. When a single individual is tasked with defending their analysis across multiple disciplines, the risk of vulnerability increases. Opposing counsel often aims to exploit any perceived weaknesses in the expert’s knowledge, even if those weaknesses are outside the scope of their primary expertise.
Allowing a team of experts to share this burden could result in more balanced and thorough examinations. Furthermore, as is the case where junior counsel are often given opportunities to partake in narrow cross-examinations during large trials, the new wave of experts could also gain invaluable experience in the witness-box in order to develop and hone their skills.
Conclusion: A Case for Evolving Practices
The complexities of modern financial litigation may require a re-evaluation of how expertise is presented and utilised in court. While the traditional model of a single expert has its merits, it is increasingly clear that this approach may be insufficient for large-scale trials.
The integration of expert teams, combined with transparent collaboration and defined roles, offers a compelling alternative. Such practices not only ensure comprehensive coverage of complex issues but also enhance the credibility and reliability of expert testimony.
In Part II we will turn our focus to the scope of expert evidence, its timing during the trial and its presentation in court.