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Litigation strategy: When the defense should throw stones in assessing damages

Oct 20, 2022

An underlying assumption in all financial damage calculations is that liability will be established by the plaintiff. This liability assumption provides the basis for experts working on behalf of both plaintiffs and defendants to provide their respective opinions regarding the quantum of damages.

In some instances, this underlying assumption fails to consider important, extenuating circumstances that may fall outside the expertise of the damages expert and their affirmative or alternative opinion(s). Examples include, but are not limited to, the following situations.

  • Medical malpractice allegations involving a person with pre-existing physical/mental issues who would likely not be capable of returning to the workforce in their pre-loss position.
  • Unlawful termination allegations for a person approaching a reasonable retirement age.
  • Alleged lost business opportunities that preceded economic uncertainties such as the COVID-19 pandemic.

If the defense expert is tasked with the calculation of a damages amount but lacks the credentials to further explain why liability in a particular situation “does not matter,” the defendant may unwittingly establish a floor for damages.

Depending upon the situation, many plaintiffs would happily split the difference between their estimate of damages and a reasonable floor established by the defendant.

Non-testifying expert

One common strategy for defendants is to use their damages expert in a non-testifying/ consulting role. The attorney is then armed to criticize the opinions presented by the plaintiff’s expert, i.e., to throw stones without establishing a floor.

Depending on the facts and circumstances of the case, this strategy has certain advantages:

  • Avoids the establishment of a floor for damages if the economic reality is that damages should be $0.
  • Avoids possibility of disqualification or limitation of testimony by defense expert.
  • Simplifies attorney-client communications. No need to explain why the expert computes damages when the attorney insists there are no damages.

Advantages vs. hazards

These advantages must be weighed against the potential hazard of the defense not providing its own quantification of damages. The defendant could be stuck with the damage amount claimed by the plaintiff if the criticisms by the defense counsel fail to sway the conclusions reached by the trier of fact.

The legal team for the defense should carefully evaluate the opportunities, hazards and facts when deciding how to present a case for their clients that has the best likely economic outcome.

How Wipfli can help

Wipfli’ professionals can provide counsel and help navigate these strategic decisions. We have deep experience evaluating the complex factors that should lead to the best economic outcome for litigation clients.

Find out more about our litigation support services.

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Allen E. Jacque, CFA, CFE
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