Navigating claims and managing experts: traditional professions verses emerging professions

The insurance landscape is continuing to change and with it, the types of professionals seeking professional indemnity insurance is shifting and growing. The sector has, for decades, insured and responded to claims against what are regarded as “traditional risks”, such as surveyors, architects, engineers, solicitors and accountants. However, professional indemnity insurance is increasingly being sought by what are commonly referred to as ‘emerging professions’ and they are challenging the status quo when it comes to litigation risks. One aspect to consider in managing and responding to such claims is the key issue of identifying and managing expert witnesses.

The shift

Investigating and responding to claims against “traditional” professionals such as accountants, solicitors and architects, comes with the benefit of well-established statute, a developed body of case law and regulatory frameworks. The challenge in each professional indemnity claim of establishing compliance with the standard of reasonable skill and care to be expected of each professional is assisted by the availability of a multitude of experienced, tried and tested liability expert witnesses. Generally speaking, therefore, the standards to which these “traditional” professions are to be held is often relatively clear based on expert input. The strategy that is deployed to defend these claims has been honed year after year, claim after claim. Insurers, their “traditional” insured customers and the legal professionals representing them therefore benefit from a relatively high level of certainty as to the likely trajectory of any given claim and the level of risk/cost that is set to be incurred in defending it.

At Weightmans, we have been instructed in relation to claims made against a wide range of “emerging” professionals, such as archaeologists, interior designers, heritage consultants, process servers, letting agents and planning consultants. These professionals often operate in a less regulated arena or one where standards are developing and are not well established by reference to case law. The absence of established standards via case law may assist the policyholder in defending the claim, as it is for the claimant to establish breach of duty. However, when claims are brought, this creates a number of hurdles for their insurers and legal professionals alike, including assessing the risk with the assistance of an appropriate expert witness experienced in opining on such claims. Additionally, the fact that statutory and regulatory frameworks are still developing, means that legal professionals are often advising on a framework that is unclear and capable of changing. This in turn adds to the complexity of expert witness input.

Scarcity of expert witnesses

In emerging fields/professions, the pool of potential expert witnesses is often small leading to two specific challenges.

Conflicting out

The few available experts are often conflicted out early by other parties. This is particularly so where there is a multi-party dispute or an insured client is joined to proceedings late in the day. The corollary of this is that the insured client can be “on the backfoot” due to the most reputable experts already having been retained by the other parties.

Increased input from the legal team

It is often the case that experts in these emerging professions are very experienced practitioners in their own field but have little experience of litigation procedure, the preparation of expert reports that comply with the Civil Procedure Rules, meetings with their counterparts to narrow the issues and cross examination at trial. If this is not correctly managed, it can lead to expert reports which can easily be undermined by the opposition’s expert or counsel under cross examination. Guiding an expert, who is new to litigation, through the process is therefore a tactical necessity but this does not come without cost consequences for insurers, as it can be a resource heavy endeavour for legal representatives.

The role of the “emerging” professional

Rather than the legal team drawing from their pool of tried and tested experts (as they would in a claim against a “traditional” professional), the policyholder is often the best placed party to recommend a potential expert based on sector profiles, awareness and organisations and also to assess the relevance of the specific skills expertise of a potential expert witness. Their input may be the primary vetting mechanism for expert witnesses and in many claims, they are key in terms of challenging a claimant’s technical expert evidence on specific allegations.

Practical tips

• Make enquiries with potential expert witnesses regarding availability and conflict checks as early as possible — ideally as soon as a Preliminary Notice is received.
• Conduct “full and frank” discussions with potential experts to assess the extent of their ability to opine on the standard of reasonable skill and care to which the emerging professional will be held, to assess their experience of providing expert reports and to gauge whether the experience that they do have is transferable i.e. inquiry work is often similar to Civil Procedure Rules work, albeit with a different focus and different requirements/timeframes.
• Seek the policyholder’s input on the identification and directly relevant expertise of any potential expert.
• Ensure that insurers are aware of the potential increased costs and time that may be incurred in instructing and managing an expert in an emerging field. This extra time will need to be factored into any reserving advice.