Why Do Initial Damages Assessments?

by Carol Ludington, CPA, CFF, CLP, ACIArb

“You’ve got to think about big things while you’re doing small things, so all the small things go in the right direction.”

- Alvin Toffler

An Initial Damages Assessment (“IDA”) identifies the big things so a dispute goes in the right direction, and focuses the small things in directions that matter most.

An IDA is an effective and efficient approach to addressing damages. It identifies potential damages measures, likely damages magnitudes, and key damages issues, resulting in informed decision-making, earlier resolution of disputes, streamlined discovery, and significant savings of time and costs.

  • Informed decision-making
  • Early dispute resolution
  • Streamlined discovery
  • Reduced time and cost
 

Frequently Asked Questions

What are the benefits of an ida?

An IDA facilitates informed decision-making and early resolution of disputes, better matches dispute efforts to potential economic value; and streamlines case preparation by identifying and prioritizing needed discovery. IDA typically results in less time spent by lawyers, experts and parties and provides significant cost savings.

What is the ida process?

The process is intentionally flexible to properly tailor the process to what is needed in each case, but generally involves a combination of interviews and research of publicly available information. The IDA results are then typically communicated verbally, although a written report can be provided, if requested.

What documents are necessary to perform an ida?

Few, if any, documents are typically necessary to perform an IDA.

How long does it take to complete an ida?

The IDA is typically completed within a week or two of its start.

Who should conduct the ida?

The IDA should be conducted by an experienced damages expert retained as a consulting expert or appointed as a neutral. The experience of the damages expert enables quick and efficient identification of issues and solutions.

When is an ida done?

An IDA should be done as early as possible, but can be beneficial at any point in the life of a dispute.

What are some examples of ida uses?

An IDA is conducted for pre-litigation due diligence, to assist formulation of litigation strategy, to facilitate settlement, and to streamline discovery.

Pre-litigation due-diligence

An IDA is conducted prior to litigation commencing to identify potential damages magnitudes and issues. In some instances this resulted in resolution of disputes before suit being filed.

Assist formulation of litigation strategy

An IDA is performed before and during litigation to assist the formulation of litigation strategies and to prioritize efforts.

Facilitate settlement

An IDA facilitates settlements by identifying damages magnitudes and issues, by identifying potential settlement options, and by articulating arguments.

Streamlining Discovery

An IDA facilitates focused and streamlined discovery, resulting in cost-savings and efficiencies.

Does ida add to the cost of disputes?

No. Although IDA does involve some up-front cost, those costs are quickly offset by cost-savings that result from early resolution, efficiencies that result from the focus on key issues, focused discovery, and fewer discovery disputes. [1]

[1] Carol Ludington, has extensive experience in financial and business analysis, including consideration of damages, related to complex commercial and intellectual property disputes. She frequently serves as an expert witness and consults regarding initial damages analysis, alternative dispute resolution and licensing and has served as an arbitrator. Over the past thirty years she has been involved in traditional litigation, domestic arbitration and international arbitration, has testified as an expert witness and has served as a sole arbitrator and as a member of arbitral panels. She can be reached at cludington@ludingtonltd.com