More sophisticated contracts mean expert witnesses spend more time carrying out investigations, with the result that costs go up
The increasingly sophisticated nature of contracts means that, when disputes arise, lawyers ever-more turn to expert witnesses to provide deeper scrutiny of a case, according to Fernando Cuñado, a partner in the advisory forensic team at KPMG.
In addition, he says that, because the contracts are getting more sophisticated, expert witnesses spend more time carrying out investigations, which means that the associated costs are rising.
“Transactions are using more complex contracts, which means that the disputes arising from these are also more complex,” he observes. “Claims require forensic inspection to assess the loss of profits for issues such as price adjustments, warranties and sales and purchase agreements.”
Cuñado says disputes involving the financial services, infrastructure and energy sectors are particularly common, and that arbitration is starting to become more popular.
“Litigation continues to be the main focus but we are seeing arbitration gain momentum,” he claims. “The level of detail in arbitration cases can be very high because cases are often more expensive, multi-party and cross-border in their nature and involve trade bilateral agreements and trade treaties, which often further expert witnesses. As such, whereas an expert witness may only spend a day attending litigation, arbitration can take a week.” The growing workload of more sophisticated litigation and arbitration places greater demand on expert witnesses´ time, which raises costs. Cuñado says the cost of dispute resolution is at the top of law firms’ agenda and, while there has been some pressure on fees, many in the sector have been able to resist cuts.
“Fees have been at a stable level and it is important not to get into a battle on price,” he says. “Indeed, cost is an important factor but should be carefully balanced with expert commitment to clarity and precision. Keeping quality standards is paramount in order to provide easy to follow, sound and clear conclusions.”