The role of insurance expert witnesses in legal cases is vital for the court to understand the myriad processes and judgments in our industry. Robin Wood explains their role
A number of readers have asked for more information about the role of the insurance expert. This piece on the subject will hopefully increase readers' knowledge and understanding. It may also inspire those with expert knowledge and experience in a particular area to consider that they, too, might be able to assist the courts on specific insurance matters.
It is important to understand that an expert, while appointed and instructed by one or more of the parties to litigation, is reporting to the court and has an overriding duty to the court.
The expert will receive instructions from the instructing party (these instructions may or may not be defined by the court), within a strict reporting structure, generally limited to the issues defined in those instructions. The expert will be expected to express an opinion on matters relating to market practice as it relates to a chosen area of expertise.
The area of expertise may be wide, such as market principles and practice relating to alleged negligence on the part of a practitioner, or it may be very narrow - the principles and practice of underwriting, say, plastics risks.
One of the key attributes of an expert (apart from a profound knowledge of a subject or market) is the ability to recognise the need to be independent of the arguments and allegations put by one side or another and to be able express a range of opinions. Remember it is often only one side that pays the expert's fees.
Personal opinion
Irrespective of the opinion, an expert must avoid advocacy. Taking sides and trying to win a case is a matter for the court and the lawyers to deal with. Above all, the expert must give the court his own opinion and not one that any other party might prefer.
The rules governing the manner in which an expert performs his duties to the court are strict (CPR 35) and most experts will belong to one of the major expert witness institutes or societies, or be registered with an organisation that insists on certain criteria being met before registration can take place - the Law Society is a good example.
This is not compulsory, but most solicitors and barristers seeking an expert will look for some sort of accreditation or recommendation before approaching an expert
There is no doubt that for the right person, the role of an expert can be both stimulating and rewarding. But if you are thinking that this is something that might appeal to you, be quite clear that there are other factors that go with the role.
In the first place, it does take substantial commitment, irrespective of the size of the case. On a large and complicated case, one can find oneself having to set aside weeks just to `read in' on a case, and meeting court deadlines is a priority.
Current knowledge
It is also vital that not only does the expert keep up to date on a particular subject, but also that he has the ability to give an opinion on a circumstance that might have arisen quite some time ago. It is no good having an expertise that has been gained only in the past three years if the case relates to market practice five years ago.
You should also be aware that the expert works in the same world of `legal privilege' as lawyers. This has some advantages, but also the possible disadvantage that unless the information in a case reaches the public domain - normally by way of a public court hearing - it can never be disclosed to anyone not party to the case. One exception is certain information arising under the Proceeds of Crime Act.
Any experienced expert will, therefore, have or have had, access to information about the industry itself, organisations and individuals within the industry. And the ability to lock that information away is paramount.
You should also be alert to the fact that if you are still practising, you may be asked to express an opinion on a case that involves those working in your specialist area.
The legal profession needs more experts to refer to and there is a growing trend for other organisations not involved with litigation to seek advice and opinion from experts.
If you inquire about entry to one of the expert witness lists or bodies, you may feel that there is something of a catch-22.
This arises from the fact that entry is governed by the need for, say, two references from solicitors who have instructed you and solicitors seem to prefer instructing experts who are accredited and/or have some experience.
However, most of the informed societies and institutes offer `mentoring' schemes for new experts and you may well work for one of the larger insurance or financial organisations that offer litigation support services to the legal profession. There may well be an opening there for the budding expert.
Finally, please note that I have used the word expert throughout as an abbreviation for `expert witness'. An expert witness should be very good in his given subject, but there are many experts in the insurance and financial world who do not choose to involve themselves in such activity.
The only difference is that, if the situation arises, the expert witness should be able to tell a court just how good they are.
And how could I leave readers without an example of a thorny problem to consider?
Question
XYZ company suffered an armed raid on one of its high quality retail clothing outlets. A few years later, XYZ Newco, with the same directors, asked a broker to place theft insurance for a similar risk.
The answer to the question on page 3 of the proposal, as to "...have you suffered any losses? etc" was in the negative, but the broker suggested that the £2m heist at the previous business should be disclosed under the declaration on page 9 of the proposal, "...are there any other matters? etc".
A theft arose and the underwriter avoided the policy for misrepresentation, as the loss had not been disclosed in the correct place and the broker had not brought the declaration to his notice.
Ignoring any legal aspects, what is your expert opinion as to market practice here?
Is the underwriter right or wrong, or do you consider that there are a range of possibilities?
We will look at the matter in more detail next week.
Using this CPD page
For the vast majority of practitioners and indeed support and supervisory staff in our industry, CPD is about regular learning and study that is planned, recorded, timed and evaluated.
If you are a member of a professional body with a CPD requirement then there will be certain rules regarding the quality and nature of study material, and the way in which it is recorded.
For staff of GISC members this means recording on your individual training file what the learning was, who provided it and when.
It might be structured, such as a course, a learning programme or exam study. But it can be unstructured. This form of study encompasses reading the trade press, technical material or taking part in activities to support your professional body.
Some CPD requirements are points related (a little antiquated) and others require a time value to be allocated.
For example, it might take one hour to read Insurance Times each week. Most of that could be put as a time value but, in reality, perhaps only an half hour was devoted to learning something. The rule is to be honest with yourself and record the time that is relevant.
Always take time to make a note of what you felt you gained from the activity. This is useful information for anyone else considering the same activity.
In response to the popularity of our CPD programme each week's CPD page can now be downloaded from our website. We will be preparing a binder for you to keep these in alongside the results of the exercises.
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