The Case That Every Litigation Team Should Read
On December 23, 2025, the National Company Law Appellate Tribunal (NCLAT) dismissed an appeal by a global consulting firm against a real estate development company. The case involved a USD 367,353 fee dispute over expert witness services provided for an ICC London arbitration. On its face, this is an insolvency law decision. But beneath the surface, it's a masterclass in what can go wrong when expert witness engagements don't plan for the one thing that regularly happens — the expert moves on.
This article unpacks the judgment from the perspective of the expert witness industry and draws lessons for law firms retaining experts, expert witness firms managing talent, and individual experts navigating career transitions.
What Happened: The Facts in Brief
A global consulting firm was engaged in February 2020 to provide independent expert services to a real estate development company in connection with an ICC London arbitration. The engagement was structured around four phases: preliminary review, expert report preparation, response to opposing expert evidence, and trial support including testimony.
The critical detail: the entire engagement was built around one individual — a Senior Managing Director at the consulting firm, who was designated as the "primary contact" and the person to be "contacted for all queries." He was the named expert witness in the ICC proceedings.
The Trigger Event: The expert left the consulting firm on January 14, 2022. The client followed the expert, not the firm. They continued working with him through his new independent consultancy for the same arbitration — paying him over INR 2.07 crores through that entity.
The consulting firm continued issuing invoices between May 2022 and February 2023 — after the expert's departure. The client had already paid approximately USD 469,600 to the firm, but stopped paying the remaining invoices totaling USD 367,353. The firm issued a demand notice under Section 8 of the Insolvency and Bankruptcy Code in July 2024, and when the client disputed the claim, filed a Section 9 application to initiate insolvency proceedings.
Both the NCLT and the NCLAT rejected the firm's application, holding that a genuine dispute existed and that the IBC could not be used as a recovery mechanism for a contested commercial claim.
The Expert Witness Angle: Why This Case Matters Beyond Insolvency Law
Strip away the insolvency law framework and this case exposes a structural vulnerability in how expert witness engagements are contracted, staffed, and managed. Here are the deep insights.
1. Expert Engagements Are Personal — Stop Pretending Otherwise
Let's start with the uncomfortable truth that this case makes impossible to ignore: the client hired the expert. They contracted with the consulting firm because that's where the expert worked. When he left, they followed him. This isn't unusual — it's the norm.
The expert witness industry works the same way the legal industry does. Clients retain individual lawyers within law firms. The firm provides institutional support — research teams, administrative infrastructure, brand credibility — but the relationship lives with the individual. No general counsel switches outside counsel because the firm changed its logo. They switch when their trusted partner moves.
Expert engagements are no different. An attorney retaining an expert for testimony in a high-stakes arbitration is betting on that person's credibility, subject matter depth, and courtroom presence. No contractual clause that says "the firm is the service provider" will change the practical reality that if the expert leaves, the client's instinct — often their only viable option — is to follow.
The engagement letter in this case tried to frame it as an institutional relationship. It named the expert as "primary contact" but also listed another Senior Managing Director as co-responsible. In practice, the named expert was the engagement. When he departed, the firm's argument that it could still perform the contract rang hollow — and the tribunal saw through it.
The real question isn't how to make engagements less personal. It's how to structure the commercial and contractual terms to protect all parties when the inevitable personnel change happens.
2. Engagement Letters Need a "What If the Expert Leaves" Playbook
Since expert engagements are inherently person-centric, the engagement letter needs to explicitly address what happens when the named expert becomes unavailable — whether through departure, illness, conflict, or any other reason. Most engagement letters today are silent on this. The one in this case was.
This isn't about pretending the contract is with the firm rather than the expert. It's about building a set of agreed rules for a scenario that everyone knows is possible.
What engagement letters should address:
For the expert firm's protection:
The engagement letter should specify that if the named expert departs, the firm has the right to propose a qualified replacement within a defined timeframe. If the client declines the replacement, the firm should be entitled to payment for all work completed to date — including work in progress — plus a reasonable wind-down fee. This is the clause the consulting firm in this case desperately needed and didn't have. Without it, the firm was left arguing that it could still perform a contract whose commercial purpose (the expert's testimony) it plainly could not fulfill.
For the client's protection:
The client should have a clear termination right if the named expert becomes unavailable, with a defined notice period and a cap on wind-down costs. The engagement letter should also address work product ownership and transition — if the client needs to engage the same expert through a different entity, what materials can be transferred? What can't? This protects the client from being held hostage to a firm that can no longer deliver, while giving them a clean path to re-engage the expert they need.
For the departing expert's protection:
This is the dimension most engagement letters ignore entirely. The expert who leaves a firm mid-engagement is in a precarious position. They may have non-compete or non-solicitation obligations to the firm. The client may approach them directly. Work product they developed at the firm may be claimed by both the firm and the client. The engagement letter — or, more realistically, the expert's employment agreement with the firm — should address active matter transition protocols, including how ongoing engagements are handed over, what the expert can and cannot do during a cooling-off period, and how work product ownership is allocated.
Lesson for law firms: If you have a problem with an expert's invoice, say so immediately and in writing. Silence is ambiguous — it can be read as acceptance or as a dispute that simply wasn't articulated. Contemporaneous documentation eliminates this ambiguity and protects both parties.
Lesson for expert firms: If invoices are going unpaid, don't just send follow-up emails asking for payment. Seek written confirmation that the client acknowledges the amount owed. An unpaid invoice with no written objection is stronger than an unpaid invoice where the underlying relationship has clearly fractured.
4. The "Follow the Expert" Dynamic Is a Contractual Minefield
Perhaps the most fascinating aspect of this case is what happened after the expert left the consulting firm. He set up an independent consultancy and continued providing the exact same services to the client for the exact same arbitration. The client entered into a new agreement with the expert's new entity dated June 1, 2023, and paid him approximately INR 2.07 crores through that entity.
The NCLAT noted that the new agreement covered overlapping work phases, and that Phase 1 under that agreement was already "complete" by the time the letter was signed — meaning the work had started well before the formal agreement date.
This creates a three-way problem:
For the original firm: Lost revenue and a disputed claim for work that may have been duplicated by their former employee — through a new entity — without any contractual framework governing the transition.
For the client: Potential exposure to claims from both the original firm and the new entity for overlapping work. The client ended up paying over INR 3.88 crores to the expert through the original firm and a further INR 2.07 crores through his new entity — for what was essentially the same matter.
For the departing expert: Questions about non-compete obligations, client solicitation, and the use of work product developed during the original engagement. The judgment doesn't explore this dimension, but it's the elephant in the room.
What needs to happen: When an expert leaves a firm mid-engagement, there should be a structured transition — not a free-for-all. The original firm, the departing expert, and the client all need clarity on what happens next. Who owns the work product? What fees are owed for completed work? Is there a cooling-off period? Can the client engage the expert through a new entity immediately, or is there a handover process?
None of this existed in the engagement at issue. The result was predictable: overlapping invoices, disputed payments, and litigation.
5. Insolvency Proceedings Are Not a Collections Tool for Disputed Fees
The consulting firm's strategic decision to pursue insolvency proceedings rather than civil litigation or arbitration backfired. The NCLAT was emphatic: Section 9 of the IBC is designed for undisputed operational debts. The moment the client raised a plausible dispute — and the tribunal found it was more than plausible — the insolvency route was closed.
The tribunal relied on the Supreme Court's Mobilox Innovations test: the dispute need not be likely to succeed on merits, but it must be more than a "patently feeble legal argument or an assertion of fact unsupported by evidence." The client's defense — frustration of contract, overlapping services by the expert's new entity, payments already exceeding the original cap — cleared this bar comfortably.
The takeaway for expert firms: When there's a genuine dispute about scope, performance, or payment, choose your forum carefully. Civil courts and arbitration allow for detailed examination of contractual obligations and evidence. Insolvency proceedings are a blunt instrument designed for clear-cut defaults, not complex commercial disagreements. Choosing the wrong forum wastes time and money — the consulting firm was also ordered to pay costs of INR 25,000.
6. The Fee Cap Argument: Scope Creep Without Written Authorization Is Dangerous
A subtle but important element of the client's defense was that the original engagement capped Phase 1 fees at USD 30,000, yet the consulting firm received payments of USD 219,600. The client argued they had already paid nearly seven times the capped fee and that no further amounts were due.
This highlights a recurring problem in expert witness engagements: work expands beyond the original scope, but the engagement letter isn't updated to reflect new fee arrangements. When a dispute eventually arises, the original cap becomes a weapon in the client's hands.
Best practice: Every time the scope of work expands, get a signed addendum or amendment to the engagement letter. An email approval of a revised budget is helpful but not as strong as a formal amendment. An addendum in this case apparently existed but was insufficient to cover all the work the firm claimed to have performed. Document every scope expansion with corresponding fee authorization.
Broader Implications for the Expert Witness Industry
This case is a window into a set of systemic issues that the expert witness industry has not adequately addressed.
Expert mobility is increasing. Senior experts move between firms, start their own practices, and shift affiliations more frequently than ever. The industry needs standardized protocols for handling mid-engagement transitions — not after-the-fact litigation.
Engagement letters are stuck in the past. Most expert witness engagement letters assume the named expert will see the matter through to completion. They need to anticipate departures and build in transition mechanics that protect the firm's revenue, the client's continuity, and the expert's professional mobility.
The "institutional vs. individual" framing is a false choice. The answer isn't to make engagements less personal — that's fighting human nature and market reality. The answer is to accept the personal nature of these relationships and build commercial structures that work when the person moves on. Think of it like a law firm's partnership agreement: everyone knows partners leave, so the agreement governs what happens when they do.
Clients need better visibility into expert affiliations and transitions. When a law firm is about to retain an expert who recently changed firms, they need to know that — and understand the implications for any prior engagements. Platforms that provide transparency into expert affiliations, engagement histories, and firm structures help attorneys make more informed retention decisions.
Practical Checklist
For Law Firms Retaining Experts | For Expert Witness Firms |
|---|---|
Confirm who the named testifying expert will be and negotiate what happens if they become unavailable — including termination rights and wind-down costs | Include "expert departure" clauses in all engagement letters: right to propose replacement, payment for completed work, and defined wind-down process |
Document invoice disputes immediately and in writing — never let disputed invoices accumulate silently | Ensure employment agreements address active matter transitions, non-solicitation for ongoing engagements, and work product ownership |
Get written confirmation of scope expansions and revised fee authorizations at every stage | Invoice promptly, follow up consistently, and seek written acknowledgment of outstanding amounts |
Before engaging a recently departed expert through a new entity, understand your obligations under the original engagement | Build team depth on engagements so that personnel changes don't collapse client relationships entirely |
If the named expert leaves the firm, negotiate a clean transition with both the firm and the expert — don't just start a new engagement and hope the old one goes away | Choose the right recovery forum — civil courts for disputed claims, not insolvency proceedings |
Final Thought
This case isn't just a fee dispute. It's a case study in what happens when the expert witness industry's most predictable risk — the expert leaving — meets an engagement structure that didn't plan for it.
The solution isn't to pretend expert engagements aren't personal. They are, and they should be. An expert's individual credibility, expertise, and courtroom presence are exactly what clients are paying for. The solution is to build commercial and contractual frameworks that acknowledge this reality and create clear rules for when the relationship between the expert and their firm changes.
Because in this industry, it's not a question of if it will happen. It's when.
This analysis is published by Exlitem as part of our commitment to bringing transparency and actionable intelligence to the expert witness industry. For more insights, visit exlitem.com.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. The analysis is based on a publicly available 2025 NCLAT judgment. Party names and identifying details have been anonymized.
