Page 82 - Expert Witness

In arbitration, the arbitrator (an impartial third person) acts as a judge by deciding the case on its merits.
The arbitration can be either binding or nonbinding. If it is binding, the decision of the arbitrator is the
same as a judge’s would be and the parties cannot later turn to the courts for a decision.

In the hopes of saving money and avoiding public knowledge of the problems, Betty’s client requests
mediation. The manager/co-owner continues to deny that there is anything to mediate. The CPA/co-
owner continues his silence. Betty’s client has two options at this point: work with law enforcement in
pursuit of criminal charges or file a civil action. He chooses a civil action because it presents the best
chance of recovering the misappropriated funds.

The Civil Action

The civil action is commenced by filing a complaint with the court. In order to be inclusive, Betty’s cli-
ent, now the plaintiff, files a complaint against the other two co-owners and company Z. Included with
the complaint are three copies of the summons, one for each of the defendants, which are signed by the
clerk and served upon the defendants. They are given 20 days to respond.

The response is received within one week. All three defendants have hired the same attorney, and they
have denied all the allegations in the complaint. They ask the court to dismiss the proceedings. A hear-
ing is set for two weeks later. During the hearing, the plaintiff testifies to the evidence found during Bet-
ty’s preliminary investigation. The judge denies the request to dismiss. At that time, he also signs sub-
poenas for copies of the personal financial records of the individual defendants and the corporate finan-
cial records of company Z.

At this point, Betty’s initial engagement has changed, so she issues a new engagement letter covering
the additional records, a more distinct purpose, assistance to the client’s attorney, and the possibility of
expert testimony.

Her analysis of the additional records verifies her original findings. She updates her report to include
this new information, being particularly aware that this report will be filed with the court. She knows
that the copy provided to the defendants also will be given to their expert witness, whose main purpose
is to find ways to question and discredit the report. Betty, aware that she is not protected by any privi-
lege, is very careful about what she puts in writing and also is careful to maintain her files properly in
case they are subpoenaed. She meets frequently with her client’s attorney to discuss the various motions,
counterclaims, and cross-claims filed by the parties. During this time, it also is disclosed that she will
testify as an expert witness.

Betty assists the attorney in preparing interrogatories for the defendants and in preparing for depositions
of related parties, including the two company A employees she saw working at company Z. As ex-
pected, Betty receives a notice of her own deposition by the opposing attorney.

Then there is a surprise filing. The CPA/co-owner defendant has hired a different attorney and is claim-
ing he was not involved in any alleged misappropriation and had no knowledge of any such activities.
He also asks that his proceeding be severed from that against the manager/co-owner and company Z.
Betty is not surprised by this because he could lose his CPA license if he is found guilty fn 34 and it is
taken as a good sign by her client and his attorney. The judge denies the request to sever the proceed-

fn 34 See the “Integrity and Objectivity Rule” (ET sec. 1.100.001), and the "Acts Discreditable Rule" (ET sec. 1.400.001).

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