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Table of Contents

Lead Story

Industry builders by association

News

Industry Update

NACHA proposes ACH rule changes

FTC raps processor for boarding scammers

TMR says Shark Tank exposure worth it

SpendTrend numbers bolster holiday optimism

Features

Execute your way to the top

The $800 million Braintree acquisition and PayPal's pursuit of the emerging digital marketplace

Patrick Carroll
First Annapolis Consulting Inc.

Selling Prepaid

Are GPR cards cheaper than checking

Views

Insights from an expert witness

Ken Musante
Eureka Payments LLC

New study on the Durbin Amendment claims consumers took it on the chin

Anne Leisz
Processingfinder.com

Education

Street SmartsSM:
Letting go of the inevitable no

Dale S. Laszig
Castles Technology Co. Ltd.

Your merchants need mobile-friendly websites

Michael Gavin
Merchant Warehouse

Virtual currencies and the law – a primer for ISOs

Adam Atlas
Attorney at Law

Company Profile

OnDeck Capital Inc.

Tecmark

New Products

PayAnywhere 2.0 for Android

Product: PayAnywhere 2.0 for Android
PayAnywhere

New Online Store

Product: New Online Store
Signature Card Services

Inspiration

Give yourself the gift of holiday skills

Departments

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

December 09, 2013  •  Issue 13:12:01

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Insights from an expert witness

By Ken Musante

Legal complications are a bane to business owners. You cannot eliminate them, but you can minimize them. Solid contracts (properly reviewed by an attorney), trained managers and clear job descriptions serve to minimize the possibility of legal entanglements. Litigation costs are enormous for defendants and plaintiffs, both of whom also must handle the lawsuit's distractions, schedule time for it and face an uncertain outcome.

Should a claim proceed, discovery ensues; both sides request documentation and information from the other and depose individuals who have pertinent evidence. Experts are sometimes hired because each side is making opposing claims, and a judge or jury, with little knowledge of our industry, must make a determination. Hiring an expert witness makes the process more expensive, but it may be necessary. Recently, I served as an expert witness in two cases and gained further insight into the process.

Our industry is little understood by those outside of it. Making a claim that you were treated unfairly or in a manner inconsistent with industry practices requires that you clearly state what the industry norms are. Industry contracts are full of terms like Acquirer, Industry Standards, Processing and Settlement. These are sometimes used to mean different things and are either unclear or not understood by those outside of our industry.

The expert's role

Regardless, though the arbitrators of a dispute (judges, arbitrators and juries) are outside of our industry, they determine which side is right. Some cases hinge on the expert's ability to convince the judge or jury of his or her opinion. I have found that both your answers and your perceived confidence in those answers are critical. While you are hired by an attorney for either the plaintiff or the defendant, your hiring attorney cannot tell you what to say.

Technically, as an expert, you cannot express opinions on specific facts until you are hired. While employed as an expert, your material, notes, emails and all documents reviewed are discoverable and available to both parties. Anything you use or prepare is fair game for both parties and must be presented if requested.

Before a trial, an expert is deposed by the opposing attorney, who needs to understand the relative strength and weakness of the expert, as well as how the expert will opine. The attorney may bring up past information to make a point or discredit the expert. In my experience, attorneys ask the same questions, at different times, to see if there is any discrepancy in responses, which could then be used to discredit the expert.

Because much of our industry is based on the Visa Inc. and MasterCard Worldwide rules, attorneys sometimes require individuals who are experts in certain aspects of those rules, as they existed at the time of the dispute.

Additionally, although payment processing practices are known to individuals within our industry, they are foreign to others. It can be difficult to describe common settlement, residual or reserve processes to those who do not understand common industry terms. Further, the expert must form and maintain an opinion without referring to any specific documents; after all, the expert is providing an opinion.

The deposition process

During a deposition, all comments are recorded. Typically, a stenographer types every word said. Sometimes a deposition can be videotaped. Upon compilation of the testimony, the expert is given an opportunity to amend anything that was said, but any correction is subject to further cross examination and may weaken the expert's testimony.

Further, counsel may object to questions asked during the deposition. Typical reasons for objecting are: the question has multiple parts, it is based on information that is not in evidence or it was previously asked and answered. Regardless, experts are usually advised that they can respond if they understand the question, but the objection is noted on the record.

The entire discovery process is expensive, time consuming and tedious. Perhaps the greatest thing businesses can do to avoid legal entanglements is know their partners. Doing business with like-minded individuals and companies will ensure that when issues arise there is a commitment to solving them amicably rather than pursuing a solution through our courts.

Ken Musante is President of Eureka Payments LLC. Contact him by phone at 707-476-0573 or by email at kenm@eurekapayments.com. For more information, visit www.eurekapayments.com.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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