Most businesses don’t think they will face litigation. Hard work, compliance with the law and good business relationships can guard against disputes becoming a lawsuit. However, even despite best efforts or intentions, the truth is that litigation is a risk any business owner undertakes simply by being open for business. A small business owner may do everything in his or her power to prevent lawsuits before they happen, but an owner cannot always control the disgruntled client or employee ready to take action in court.
After a lawsuit is filed but before the parties head to the courthouse, a phase of litigation called “discovery” takes place. This phase is all about gathering relevant information — information that will help win or defend a case — and sharing it with the other side.
Civil cases often resolve during discovery. Through investigating and sharing information, it may become clear that one side or the other has a stronger case. Or, as the aspects of the case come into focus, certain costs associated with continuing the action may begin to eclipse any benefits of continuing to trial. A properly managed discovery phase can shorten the time between the filing of a lawsuit and a resolution… without ever stepping foot in a courtroom.
Discovery consists largely of producing documents and oral depositions of witnesses. During the course of discovery, each party will have to produce certain documents requested by the other side. Some of these documents will be self-serving, that is, they will be necessary to tell one side’s version of the events in question. Other documents will provide the opposing side with evidence they could not obtain otherwise. Often, a witness needs to explain what the documents mean, or else provide additional information not available from documents alone.
Witnesses provide this information through a deposition, a type of controlled interview. All parties to the lawsuit have the right to be present. There will also be a court reporter (and sometimes a videographer) who records the entire conversation as it happens. The witnesses are giving testimony in a deposition under oath. These are binding statements that may be used at trial. The deposition is very similar to being examined and cross-examined in a court of law, except that it happens before a trial and away from the judge and jury.
The witness’ testimony gives context to the documents. For example, in a dispute arising from whether or not a certain mailed notice was sent to a customer, a mail room employee might testify in her deposition about the company’s process of sending mail, from preparing the envelope to placing a letter in the care of the United States Postal Service. The mail room employee might explain the different forms and documents the mail room uses to track the generated letters through their system.
There are two basic types of witnesses in a civil trial, and thus two types of subjects for depositions: fact witnesses and expert witnesses. In the above example, the mail room employee is a fact witness, sharing facts about the way she runs her company’s mail room. Generally, a fact witness’ testimony is confined to what the witness actually knows, that is, what the witness saw or did rather than any inferences, assumptions or opinions.
Expert witnesses help educate the parties (and if the case goes to trial, the judge and the jury) about some aspect of the case that might be outside ordinary knowledge. Typically, the expert has nothing to do with the events that gave rise to the dispute. The expert is usually hired for the specific purpose of evaluating evidence in his or her area of expertise.
For example, in a dispute about a harmful chemical allegedly found in a child’s toy, a chemist might be hired as an expert witness to evaluate the toy’s chemical makeup. In addition to questions about the evidence at hand, an expert must also explain why he or she is an expert in a particular area and outline his or her qualifications or work experience. Unlike fact witnesses, properly-credentialed expert witnesses can give opinions about certain facts. However, expert witnesses can be very expensive — thus, figuring out whether a party will need an expert witness to prove its case can be one factor in spurring a resolution before trial.
Even though a lawyer will help a business owner through the maze of discovery and depositions, the business owner is the one who holds the key to the puzzle. Even before litigation, it is helpful for a business owner to know who his witnesses are. Who is the best person to speak about the manufacturing process? Who knows the most about how orders get filled? These are not questions a lawyer will necessarily know about her client immediately. The earlier in the discovery process these individuals can be identified, the better an attorney can manage the direction of the discovery phase, and hopefully help guide an optimal resolution before incurring the hefty costs of a trial.