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Banking litigation is usually complex and includes issues that are difficult for the typical juror to understand. Even cases that may at first appear to deal with simple issues, such as checking account cases, actually involve innumerable subsidiary issues that promise to confuse even the most sophisticated juror - and judge, for that matter.

What Banks Do Now

In most cases, a bank on the defendant side of a lawsuit chooses to do one of three things:

Go it without an expert themselves and try to discredit the other side's expert. Offer an "expert" that is from within the bank. Offer an "expert" from the bank down the street.

Unfortunately, all three choices are bad ones for a bank and virtually always cause them to needlessly shoot themselves in the foot. Consider that in choice 1, a bank assumes a defensive position and offers no offensive position, foregoes offering any independent support for its positions, places itself in the undesirable position of badgering the other side's expert - perpetuating the "bully" stereotype that many jurors secretly hold, and give jurors the idea that the bank cannot find anyone to support its positions.

In choice 2, a bank choosing an inside "expert" is kidding itself. By making this choice, a bank is essentially choosing to rely on the risky "We've always done it this way" defense. Banks do this because they like to have complete control over the witness, and feel that their unwillingness to acknowledge any possible problem renders it moot. However, jurors easily see through this contrived tactic and will never believe that an employee of a bank is going to go into court and say anything negative about the employee that signs their paychecks. Not only does this practice insult the intelligence of the jurors, it short-changes the bank by depriving it of being able to present an independent and objective opinion that reflects what other banks do in the pertinent circumstances. In-house "experts" cannot offer the industry-wide experience that can be offered by an independent expert consultant.

Likewise, choice 3 is ineffective in the same way as choice 2 in regard to the lack of an industry-wide view. And similarly, it is well known that it is unheard of for an employee of one bank to go into court and speak disparagingly against a competing bank down the street. The plaintiff's attorney is offered a fertile field to criticize the "Conspiracy of Silence" theory regarding the banking industry policy of bankers not testifying against each other.

It is a mystery and a serious tactical error for a bank involved in litigation not to seek the assistance of an expert witness consultant. There is no reason who banks should feel exempt from this practice that is standard throughout the rest of the world of litigation.

Three Reasons Why Banks Need Expert Consultants

1. A knowledgeable and objective expert consultant can explain the actions taken or not taken by the bank. This is clearly preferable to an explanation by either an insider of the bank or a banker down the street who the jury may think is hoping to protect himself from a similar situation or either earn a quid pro quo for use in future litigation that may be directed toward his own bank.

2. Again, an objective opinion from a qualified outsider regarding the reasonableness of the bank's actions, policies, etc., is more convincing to a jury than a similar opinion voiced by an interested party, such as an in-house expert to or a quid pro quo expert.

3. An expert consultant with broad exposure throughout the banking industry can offer convincing opinions that other banks faced with similar circumstances have correctly chosen the same actions as those chosen by the bank in the instant case.

What Banks Should Do

1. Hire an independent expert consultant who can say that not only what the bank did was correct but that it is done that way elsewhere. Contrast this with the in-house bank "expert" who can only testify about his or her own institution's practices.

2. Be truthful and open with the expert, and grant him or her access to any information they may need or request in order to formulate their opinions.

3. A bank should use its own expert to help find holes in the testimony of the other side's expert. This is particularly helpful during the deposition phase. If a bank has its expert on-hand for the plaintiff expert's deposition, immediate feedback can be offered regarding areas of weakness. 4. If it is decided that the situation is one where the bank will likely have to pay damages, do not hesitate to use an expert to critique the plaintiff's damages estimate.


Considering that the stakes are usually large in banking cases, and that one loss can precipitate additional similar lawsuits, including a knowledgeable banking consultant in you litigation strategy is a wise choice.

  * Don Coker has over 20 years experience in banking, financial economics and as a high-level financial institution regulator. He serves as a consultant and expert witness to plaintiff and defense attorneys in banking litigation.