This article is a companion piece to this podcast episode of our educational series on subrogation law, On Subrogation: Daubert & What Makes a Good Expert, hosted by our in-house podcast team of subrogation-focused attorneys, Steven Alsip and Rebecca Wright.
Oftentimes, subrogation attorneys need to hire experts to testify in their cases. Subrogation law frequently involves accidents. These accidents may require technical explanation in order for a judge or jury to determine what exactly caused an accident, or whether individuals involved in the case were negligent in performing their duties. In this article, we look at the standards a court will apply in determining whether or not an expert is qualified to testify in your subrogation claim. Then, given these standards, we examine what qualities to look for when choosing which expert witnesses your subrogating carriers can best rely on to strengthen their claim.
To understand what the legal rules governing expert testimony are trying to achieve, consider astrology. Certainly there are people who hold themselves out as experts in astrology. But should a lawyer be able to put an expert astrologist on the witness to testify, perhaps, that a plaintiff’s astrological sign makes them more inclined than others to behave in a particular way? Certainly, no subrogation client wants to rely this kind of evidence to persuade a court to find in their favor. So, how do lawmakers keep this – and other junk science – out of the courtroom?
Subrogation Law & Federal Rule 702
In general, subrogation witnesses – and, in fact, all witnesses – fall into two different categories: lay witnesses, and expert witnesses.
Lay witnesses testifies to their own perceptions of the events that led up to the subrogation claim. They describe things they actually saw or heard. A lay witness may be the insurance carrier’s insured claimant, a third party, or someone who witnessed the events leading to the subrogation claim.
Expert witnesses, on the other hand, are not involved directly in events of a claim. Rather, the expert is brought in to help explain what happened. Experts are qualified specifically by knowledge, skill, experience, training, or education. This language comes from Federal Rule 702, which is mirrored in most of the rules of evidence across the country, including the state courts, where so much of all subrogation litigation takes place.
Now, let’s consider our astrologist in light of the language in Rule 702. What if the proposed witness has been practicing astrology for 40 years and perhaps writing astrological columns in national publications? Compared to the average person, does such an astrologer have some sort of specialized knowledge? The answer is arguably yes. This astrologist may even have attended some sort of astrological education program. So, under Federal Rule 702, this person is qualified to testify as an expert, right?
Not so fast.
The federal & state rules of evidence require the expert’s testimony itself has to be based on sufficient facts or data and the product of reliable principles and methods. Furthermore, the expert witness must have reliably applied those principles and methods to the facts of the case. The court looks at the expert’s career path, and who the expert is, and the relevancy of their expertise to the case, but also the basis of the testimony itself. Above all, the expert’s testimony must be relevant – it must help the judge or jury to determine the outcome of a significant issue in the case.
Background: Understanding the Daubert & Frye Tests in Subrogation Claims
These requirements come from a series of cases that determined how courts should evaluate expert testimony.
Early on, courts evaluated experts based on whether they had success in the commercial marketplace. This requirement had flaws. Suppose your subrogation case involved property damaged by fire. Using that requirement, even someone who happens to run a successful business investigating the causes of fires, could testify as to whether or not a fire was started by arson, even if that witness lacked training in arson investigation. Being seen as an expert in the community was more important than having real expertise.
That all changed with Frye v. United States – a District of Columbia Federal Appeals Court case regarding a 1922 murder trial. Some rules of evidentiary law differ in criminal courts and the civil courts that hear subrogation claims, but these laws surrounding expert testimony apply in both settings. In Frye, the accused murderer took and passed a lie detector test, and he wanted to introduce the test findings at trial to prove his innocence. The court disallowed the introduction of the lie detector test. The defendant was found guilty, and on appeal he claimed it was legal error to disallow him to show the jury the evidence of his lie detector results.
Now, if you consider only the issue of relevance, the lie detector test should come in. It’s very clear that it is relevant to the defendant’s guilt or innocence, and it would obviously help the jury reach a decision. But the court in Frye disallowed the admission of the lie detector test, by shifting focus away from the credentials of the expert and looking instead toward the expert’s testimony. Instead of commercial success, the Frye court considered the view of the scientific community, and whether such evidence was “sufficiently established to have gained general acceptance in the particular field in which it belongs.”
The court decided that a lie detector test – and by extension any expert testimony – should only be admitted if the relevant scientific community accepts the validity of the scientific technique in question. This became known as the “general acceptance test,” and the court in Frye applied it to determine that because the validity of lie detector tests were a matter of debate in the scientific community, the test had been properly excluded.
Subrogation Lawyers Need to Understand the Daubert Test
The Frye general acceptance test was the standard across the country, in nearly every state, from the time it was decided in 1923 until the US Supreme Court’s decision in Daubert v. Merrell Dow Pharmaceuticals, Inc. in 1993. In Daubert, the Supreme Court held that the general acceptance test established in Frye was superseded by Rule 702, discussed above.
Additionally, Daubert asserted one more thing. The Frye court’s test only contemplated novel scientific evidence – new science. The Court in Daubert applied Rule 702 to all scientific evidence, not just novel evidence. Specifically, the Daubert decision created a two-prong test:
(1) Is the reasoning or methodology underlying the testimony scientifically valid?
(2) Can that reasoning or methodology be properly applied to the facts at issue?
That second prong is the relevancy test we discussed above: will the testimony of the expert help the trier of fact understand the evidence or determine a fact in issue?
Daubert vs. Frye: Merits & Pitfalls
What we see in Daubert is a movement away from the Frye test’s focus on the expert’s conclusions, and towards a focus on the principals and methodology that the expert used. Essentially, the Frye test allowed the court to punt to the scientific community to decide if a scientific method is acceptable. Now, the judge has to determine whether the proffered testimony is good science or junk science.
The Daubert standard is a much more of a scientific inquiry than was Frye. The standard that science sets up is a series of asking questions, forming hypotheses, performing tests, determining if the original hypothesis is supported or contradicted by said tests, and then repeating those tests to gain as much knowledge as possible. Scientific methods directly determine the veracity of a given claim. Simply put, if a hypothesis is “true,” and the testing methods are valid, anyone should be able to repeat that test in the same manner and garner similar/identical data.
Daubert has a system of analysis and verification the Frye test simply does not; with Frye, you aren’t considering any of that methodology. You’re just saying, “What do you all think in the scientific community?” And it has become extremely evident in the last few decades that the opinion of a few “experts” in any field of scientific research might easily be dispelled by factual data. In fact, ongoing advances in science often go one of two ways:
(1) The scientific community’s view evolves based on new evidence, tests, and findings, or
(2) the scientific community is divided along theoretical lines, either due to arguments about said findings or due to zealous adherence to outdated theory.
A clear example of how this evolution affects what’s accepted as expert testimony and what’s not comes from criminal law. Over the last 30 years, there’s been a shift away from what used to be considered good science in bite mark evidence. Today, bite mark evidence is rarely used at all, because the scientific community has concluded it is unreliable, but 30 years ago, a prosecutor could get a conviction based almost entirely on bite mark evidence. Examining bite marks not only reaches unreliable conclusions, but it uses poor methodologies, and because of this, such evidence is generally not admitted today.
An example of the problematic splitting and proliferation of expert opinions as science advances, is the admissibility of polygraphs in criminal law. It used to be that polygraphs were widely accepted as irrefutable evidence someone was telling the truth or lying. However, as dozens of serial killers have shown us, there are very simple methods and reasons that someone might either pass a polygraph whilst lying, or fail a polygraph whilst telling the truth. Today, behavioral and biological research scientists dismiss polygraphs as nothing more than possible clues, while law enforcement and, of course, polygraph administers, truly believe in their efficacy at determining someone’s honesty. This is where Daubert is an important development in evidential law; opinions (re: Frye) depend on points of view, whereas data collected via proper scientific methodologies doesn’t lie.
How Daubert Aims to Exclude Unverified Evidence in Subrogation Law
The Daubert decision lays out a series of questions for courts to consider when determine whether to exclude an expert witness’s testimony. These factors were not meant to serve as an exhaustive checklist; rather, Daubert suggested examining them as part of an inquiry into the merits of an expert witness. The court suggested examining:
- The testability of the theory or technique
- Whether it has been subjected to peer review and publication
- Known or potential error rates and standards used to control the operation of the technique
- Acceptance in the scientific community at-large
You will notice that the last item on the list looks a lot like the Frye test, and indeed, the Frye test was just one part of the court’s inquiry. Once judges started applying the Daubert test, they did indeed treat it as a checklist, despite the the Daubert court taking pains to clarify that this list was not intended to be an exhaustive legal standard. Judges therefore looked for a “yes” answer to each prong, and excluded experts who didn’t meet every criterion.
However, this can cause problems in certain cases. In the subrogation claims context, you can imagine a situation where you have a one-in-a-million kind of loss. An expert, therefore, might necessarily have limited experience. Therefore, with so little data and without a known error rate, that expert has one box that can’t be checked. Subrogation lawyers handling unlikely fact situations struggle with this. The rarity of a given event does not necessarily exclude a person from testifying as an expert, but it does serve to diminish the impact of that testimony.
It is important to remember, here, that while we tend to think of Daubert as making the court a gatekeeper in the case – the court’s way of keeping out junk science like astrology or looking into crystal balls – the Supreme Court itself specifically rejected this role. In Daubert, the Court expressed its hope that the adversary nature of our legal system could be used as a way to evaluate things like pseudo-science. They believed that cross examination, contradictory science, burdens of proof and dispositive motions would all sufficiently attack what they called shaky but admissible evidence.
In other words, in the case itself, the trier of fact – the jury or the judge – should be allowed to weigh certain evidence against all of the additional evidence presented in a case. An expert’s testimony shouldn’t be determined to be inadmissible just because it’s considered to be pseudo-science. The trier of fact – often a jury – should have the opportunity to decide for themselves if the expert testimony has validity. If a judge looks at two experts before the trial begins, and throws one of them out using Daubert, the jury never has a chance to hear from that expert. The judge has effectively hamstrung one of the parties and deprived the jury of all the information it might use to make an informed decision.
The Supreme Court decided Daubert in 1993. Since then, it has been modified a bit more in subsequent cases. The first was General Electric v. Joiner in 1997. In Joiner, the court held that an appellate court may review a trial court’s decision to admit or exclude expert testimony under the abuse of discretion standard, which is relatively deferential to the trial court judge’s determination. Furthermore, Joiner concludes that the trial court should not exclude testimony based on whether the judge agrees with the expert’s interpretations of the studies, rather, the judge is only evaluating the expert’s methods.
This helps move trial court judges away from deciding that an experts conclusions are simply incorrect and disallowing that evidence. Instead, if the methodology is sound, the triers of fact may hear from a given expert, and failure to follow this procedure is an abuse of the trial court’s discretion. Remember, we just discussed the expert testimony for a one-in-a-million accident that a subrogating insurance company might be handling. Joiner makes it easier for your subrogation attorney to argue the importance of admitting your expert testimony, so long as the expert’s methodology is sound.
Two years after Joiner, in 1999, the United States Supreme Court decided another case on this issue: Kumho Tire v. Carmichael. Kumho Tire is especially interesting, because the facts of the case get closer to something we see in our subrogation cases. In Kumho Tire, the Carmichael family was driving a minivan down the road when a tire blew out. This caused a serious motor vehicle accident in which one of the passengers died and the others were severely injured. The Carmichaels sued the manufacturer of the tire and the distributor, which are collectively referred to as Kumho Tire. The plaintiffs claimed that the tire was defective.
The plaintiff proffered an expert to testify about tire failure analysis. The expert gave an explanation of tire construction and technology. He included diagrams of how the tires were built, and the different structures within them, and how that design construction works. That part of his testimony was not in dispute. What the defense disputed was the expert’s determination of the cause of the tire failure.
The defendants challenged this expert at the district court level and the District Court judge applied the Daubert factors to the expert’s testimony. The judge questioned the testability of the expert’s theory, whether the theory had been subject to peer review or publication, the known or potential rate of error, and the acceptance within the scientific community. Unfortunately, there just wasn’t a lot of what you would think of as traditional scientific evidence dedicated to this kind of investigation. A lot of the expert’s testimony was based on experience. Consequently, the District Court ruled that the expert’s testimony should be excluded, and the plaintiffs appealed this issue, arguing that that the Daubert standard should not apply.
The 11th Circuit Court of Appeals agreed with the plaintiffs. They read the Daubert opinion, and they noted that the Supreme Court in Daubert explicitly limited its holding to cover only “the scientific context”. They said that Daubert only applies where the expert relies on the application of scientific principles, rather than skill or experience-based observation. It might seem counter-intuitive to argue that an engineer should not being considered a scientist, but if you’re talking about scientific studies and protocols, rather than skill or experience-based observation, the distinction makes sense.
The 11th Circuit Court concluded that the District Court drew the wrong conclusion and should not have excluded the plaintiff’s expert testimony based on Daubert. The defendants appealed this decision, and the case came before the Supreme Court. In its Kumho Tire decision, the Supreme Court determined that the Daubert test applies to all experts, but added that while the Court in Daubert may have limited its holding to the scientific context, the resulting standard should include not only scientific evidence, but also technical and other specialized knowledge.
The following year, Rule 702 of the Federal Rules of Evidence were expanded to include these other types of experts as well.
Expert Testimony for Subrogation Lawyers
You can see how these cases are very important for the litigation of subrogation cases. Often, when we have files that have to do with contractors and other types of subrogated property loss, you don’t need an expert with a PhD in a traditional scientific field; you need a roofer or a plumber to testify about common practices in the industry.
For example, a subrogation legal team might have a file against a roofer who didn’t tarp the roof correctly. These lawyers don’t need a meteorologist to come and testify as to the rain that comes into the house, and which direction it’s coming from; they need an experienced roofer to testify as to what’s common practice for properly putting up a roof. This applies to any number of professions, including mechanics in the numerous subrogated automobile cases that insurance companies handle every year. Subrogation attorneys often need expert witnesses who are not scientists.
When this standard for expert witnesses is not “are they scientists?” but “do they possess knowledge, experience, or skill that is beyond that of a layperson?” you can see why the Kumho Tire Court wanted to extend Daubert beyond scientific experts. Without extending Daubert to all expert witnesses, courts would lack a framework for evaluating experiential and industry-specific expert testimony.
The Supreme Court holdings in Frye, Daubert, Joiner, and Kumho Tire were federal jurisdiction cases. Thus, we know how the federal courts evaluate expert witnesses. But what about state courts? Subrogation lawyers argue cases before federal courts and also state courts across the country. The majority of state courts continue to apply the Daubert standard, but several still use the Frye test, and a handful of states have developed their own tests. Regarding whether a proposed expert’s testimony is going to be excluded, a subrogation plaintiff’s mileage will vary depending on which jurisdiction your case is in.
What Qualities Make a Good Expert Witness for a Subrogating Client?
When choosing an expert, keep Daubert challenges in mind from the very beginning. Subrogation lawyers want to look for expert witnesses whose work will best fit the requirements laid out by the relevant jurisdiction. The expert’s knowledge and methodologies should specifically fit the facts of the relevant subrogation file. The expert must be able to testify competently as to what went wrong that caused the damage, and demonstrate how their methodologies lead them to that conclusion.
Definitely, for an expert, you need someone who is ascribing to the specific methodology that is most accepted. In the subrogation property loss context, for example, you may need a fire cause and origin report. In that case, you want to an expert who follows National Fire Protection Association (NFPA) standards. Although this is not a requirement in every state, it brings you much closer to surviving a Daubert-style challenge. Any time a subrogation lawyer‘s expert can point to a generally accepted code or handbook that has been rigorously tested, the team can worry less about Daubert.
Let’s now turn our attention to a related practical issue: once you have confidence you can withstand a Daubert challenge, what makes a good expert witness? What are the characteristics to look for when putting together a witness list for a subrogation claim?
The number-one thing a subrogation legal team looks for is whether or not an expert is a person who is a good teacher who can clearly educate the court. Therefore, a subrogation lawyer should ask a proposed witness to educate them. Subrogation lawyers should evaluate whether the expert can make a layperson understand the technical, complicated, and specific aspects of the expert opinion and methodology.
In addition, there are some general factors that make anyone a good witness, whether a layperson or an expert. Subrogation professionals want someone who comes across as trustworthy or truthful, and someone who is pleasant to listen to on the stand. Even more important with an expert, look for someone who is knowledgeable, dynamic, and enjoyable to follow along.
Most commercially available experts for our subrogation clients are going to be very familiar with Daubert. Experts who make a living, in-part by testifying, offering up opinions, or making the kinds of reports that subrogation lawyers rely on to effectively litigate subrogation claims, do know the standard a court expects from their work. This may streamline some of the topics you review with the expert during the on-boarding process.
If there’s anything extra that your experts can prepare if you anticipate their testimony being a problem, or if they have any reservations about what is going into their report based on what they suspect to be a Daubert type challenge down the road, it’s best to plan a strategy early on. No subrogation legal team wants its client to pay for a report and come to find out later that the expert’s testimony may not fully support the report, or that there is information that they didn’t fully take into account. That can be a real practical problem. An expert may write a report and bill the client for their report, and then when it comes time for the subrogation attorney to prep them for deposition or trial, suddenly get cold feet and don’t feel they can testify to what they put in their report. In other cases, the subrogation lawyer may sense that an expert may have been a little wishy-washy from the beginning. You don’t want either one of those witnesses testifying; you want an expert with sound methodology; an expert who has taken everything she can into account at the beginning of the case; an expert who can stick to her guns and testify compellingly when it matters.
We have noticed in our years of experience as subrogation lawyers that some of that wishy-washiness comes from the way a scientific or professional expert tries to make sure they are accurately conveying scientific considerations. If this is their profession, they want their opinions to hold up in their community based on sound science. This is a good thing, but they also need to actually commit to an opinion and say it.
Often, subrogation professionals see experts applying a heightened scientific standard to their opinions. In the law, we don’t require findings to be so sure and unequivocal. The legal process requires reaching a decision regarding a particular set of facts. Judges realize that we may never reach 100% certainty in answering a question. In subrogation cases, the legal standard is typically “more likely than not,” and the language the law uses regarding the admissibility of an expert’s opinion is “do you have an opinion to a reasonable degree scientific certainty.” This differs from the scientific community, which demands something closer to an absolute degree of certainty. Sometimes, subrogation lawyers get experts who hear the legal language but nonetheless want to draw only conclusions they can make with scientific certainty. The legal standard may make them uncomfortable.
How Certainty Weighs Differently in Law & Subrogation than in Science & Research
As any lawyer with a subrogation practice knows, there’s rarely overwhelming certainty in any contested case, especially when something – or several things – has gone very wrong, and the team is trying to piece everything together after the fact. When you get an expert report that feels very wishy-washy, it’s worth reviewing the facts with that expert. Ask the expert why he feels so uncertain.
Often, subrogation lawyers effectively evaluate their experts by offering up alternate theories for whatever has gone wrong. Say a plumbing fixture has exploded. There are a number of different ways this could happen: bad installation, poor materials, etc. A successful expert will explain, “Here’s what I think happened with a reasonable degree of scientific certainty. Here are the other explanations for what else could have caused this, and here is why I don’t think those caused loss.” Then, the expert goes through and systematically eliminates each theory of causation she believes lacks merit. These experts acknowledge the counterfactuals.
This is a practical lesson to take away from the Kumho Tire expert. The specific issue that the defendant took with Plaintiff’s expert was neither his experience nor his explanation of tire construction and technology; it was the fact that, when he concluded that the tire blew because of a defect in the tire, he did so by completely ignoring the fact that the tire had thousands of miles on it. The expert essentially said, “Well, I’m not even going to address whether or not the fact that the tire had quite a bit of wear had anything to do with this accident.”
The defendant’s objection turned on a question of methodology. An expert’s methodology can’t be “Let’s just ignore whatever doesn’t work for our side.” An expert has to be able to instead explain why the other factors were unlikely contributing factors. In any court case, and especially in subrogation claims cases about loss and liability, ruling out other possible causes and points of responsibility is just as important, and perhaps more, than trying to validate the affirmative claim. Without that kind of analysis, an expert is not going to survive a Daubert challenge. As much as a legal team might enjoy ignoring inconvenient facts, experienced subrogation attorneys know that a judge won’t do so. The ideal expert witness won’t, either.