Role of an expert in international arbitration: A good storyteller?
In the normal course of arbitral proceedings, the experts’ role is often described as expressing an opinion about a specific matter of high technicality within their sphere of competence. Put another way, their role is to assist the Tribunal on specific and often complex matters that are not easily understandable by individuals outside that sphere of technicality. As such, expert reports qualify as a means of evidence. Different sets of rules have been drafted to integrate the experts into the arbitral process and to assist Tribunals in assessing experts’ impartiality, such as the IBA Rules on the Taking of Evidence in International Arbitration (“IBA Rules”), or the forthcoming Prague Rules. However, is abiding with the rules all that is required from an expert? In the below text, I argue that the role of the expert goes well and beyond those rules.
According to the IBA Rules, an expert has a duty to “report on specific issues determined by the Party”or “by the Arbitral Tribunal”.[1]Although they are usually appointed and remunerated by one of the parties in a dispute, experts are bound to be independent and impartial. Therefore, their ultimate duty is to the Arbitral Tribunal. In its essence, the role of the expert is that of expressing an objective opinion about matters very particular to an industry, for example on financial matters, construction delays, costs in the pharmaceuticals industry, etc. The purpose of their analysis and expert opinion is to allow the Arbitral Tribunal to reach a fair and reasoned judgement. The Rules also sets forth the requirements for expert reports which include inter aliaa statement of independence, a description of instructions pursuant to which the expert is providing his or her opinions and conclusions, as well as the methods, evidence and information used in arriving at these.[2]In this sense, the Parties rely on the expert “as a means of evidence on specific issues”.[3]
Thus, when expert opinions are called upon in the arbitral process, they have the role of evidentiary documents. As such, experts need to abide by certain rules that ensure that their opinion is supported by evidence already submitted to the Tribunal[4]and that the methods used are understandable and reasonable. In my opinion as a quantum expert, my role is first and foremost to analyse the facts of the case and use my insights and experience as a financial expert to assess the actual economic losses of value that have been suffered, if any, by the injured party. A good expert is thus one that is able to clearly describe his/ her methodology, explain complex issues in laypersons terms, and allow the Tribunal to see how the facts decisive in the case are reflected in the damages claimed.
Nevertheless, I argue that being a good expert does not stop at sticking by the rules. In my opinion, the expert’s role needs to go beyond the mere assessment of facts. Crucially, the expert also needs to be a good storyteller.
Pixar, which is part of the Walt Disney Studios, is arguably the best story-telling company of the modern age. Our children, and not just them, adore their stories and can watch them over and over again. I therefore researched what makes Pixar’s stories so successful. Per its official stream video, there are ten rules of effective story telling.[5]
These include finding the idea, creating characters we can root for, drama and conflict, essence of structure, believable characters, developing an idea, challenging your characters and the theme.
I think by analogy all of the above can be incorporated in a good expert report. The expert has the benefit that he does not need to find the idea for its story since it is based on the factual circumstances of the dispute. He or she also probably does not need to look for the main character. The character will be either the claimant or the respondent in the dispute.
There is also drama and conflict, the disruptive element that creates the intrigue. Experts should be able to bring their client back in time, to the moment when the breach occurred and express what the most likely course of events would have been, but for that breach. Thus, if we were to follow a typical story structure, an expert report could be easily summarised under the following format: Once upon a timethere wasa Claimant who decided to build a road. Every day for a whole year, the Claimant built a road that would have brought him benefits over the next 20 years and allowed him to grow internationally. One day, the Respondent expropriated the Claimant and took possession of his road. Because of that, Claimant lost the value he was expecting to gain from the project and incurred additional losses that were not recovered through future profits. Until finallyan Arbitral Tribunal compensated the Claimant and they received the lost cash flows back.
An Expert should follow a good structure when telling their story in their report. They would start with setting out the facts about the dispute, the specificities of the industry as relevant to the dispute, describing the methods they used for assessing the damage and why, and then finally reaching their opinion(s) and conclusion(s). They would always distinguish between facts and opinions. In other words, they need to develop the idea of how they assess the damage in a particular way and why and then implement it.
Their story must be believable and therefore they should support their arguments with evidence and thorough analysis. Any assumptions adopted should be reasonable and be able to stand up to scrutiny. In addition, they should challenge their approach. This can be done, for example, by using alternative methods of calculation or by testing sensitivity of their results to changes in the underlying assumptions.
In short, the role of the expert, whether for the claimant or respondent, is to tell the story of the injured party and how the alleged breach(s), if proven, translates into a monetary loss (if any). The expert will need to spell out their opinion precisely on the points that changed the course of action, as it was expected on the outset of the story.
Storytelling practitioners would tell you that great stories are simple and focused and I believe the same principle applies to expert reports. A good expert is the one able to set out a simple and clear story. It is also someone who can single out the events decisive for the case, as they have been presented to him, and how these impact on the damage in the dispute. Finally, the expert needs to be able to defend his or her report under hostile cross-examination and present himself or herself as a credible and convincing expert, displaying humility and open-mindedness.
In summary, a good expert has to be, in my opinion, primarily a good storyteller, supporting his story with reliable evidence. How compelling the expert’s story is will have an impact on the direction of the conciliatory act that would eventually finalise the story, being the arbitral award.
Anthony Charlton,
Partner, Forensic & Dispute Services, Deloitte Finance France
Jana Jandova,
Director, Forensic & Dispute Services, Deloitte Finance France
[1]IBA Rules, Definitions.
[2]IBA Rules, Art. 5.2(e).
[3]IBA Rules, Art. 5. 1
[4]If the Expert relied on documents not submitted to the Tribunal, they need to state clearly what those documents were.
[5]Detailed also in a book ‘Pixar Storytelling: Rules for Effective Storytelling Based on Pixar's Greatest Films’, by Dean Movshovitz