Financial Expert
Witness Issues:
How to Handle the Dangerous
Financial Expert Witness
Decosimo Advisory Services
& Baker D...
FINANCIAL EXPERT
WITNESS ISSUES

DANGEROUS TO
WHOM?
• You want your financial expert
witness to be the financial expert
witn...
FINANCIAL EXPERT
WITNESS ISSUES

SO JUST WHO
ARE THEY?
• Who qualifies as a “dangerous
expert witness?”
• How do we unmask ...
FINANCIAL EXPERT
WITNESS ISSUES
DOES A LARGE FEE
AUTOMATICALLY INDICATE
BIAS ON THE PART OF THE

FINANCIAL EXPERT
WITNESS ISSUES

• The defense’s financial...
DANGEROUS EXPERT
WITNESS CATEGORY #1

FINANCIAL EXPERT
WITNESS ISSUES

•
•
•
•

Experienced,
Knowledgeable,
Qualified,
Uses...
FINANCIAL EXPERT
WITNESS ISSUES

DANGEROUS EXPERT
WITNESS CATEGORY #1
• Sells himself out by:
– Ignoring evidence which is...
FINANCIAL EXPERT
WITNESS ISSUES
DANGEROUS EXPERT
WITNESS CATEGORY #2

FINANCIAL EXPERT
WITNESS ISSUES

•
•
•
•

Experienced,
Knowledgeable,
Qualified,
Uses...
FINANCIAL EXPERT
WITNESS ISSUES

Dangerous Expert Witness
Category #2
• Substandard work often a result of one or
more of ...
FINANCIAL EXPERT
WITNESS ISSUES
FINANCIAL EXPERT
WITNESS ISSUES

DANGEROUS EXPERT
WITNESS CATEGORY #3
• Experienced,
• Knowledgeable,
• Qualified, but…
o D...
DANGEROUS EXPERT
WITNESS CATEGORY #3

FINANCIAL EXPERT
WITNESS ISSUES

•
•

Ignores or “tweaks” accepted
methodologies as ...
FINANCIAL EXPERT
WITNESS ISSUES
FINANCIAL EXPERT
WITNESS ISSUES

DANGEROUS EXPERT
WITNESS CATEGORY #4
• Inexperienced,
• Unqualified,
• Looking to expand h...
DANGEROUS EXPERT
WITNESS CATEGORY #4

FINANCIAL EXPERT
WITNESS ISSUES

•

Everyone has to start somewhere...
– Usually fee...
FINANCIAL EXPERT
WITNESS ISSUES
FINANCIAL EXPERT
WITNESS ISSUES

TOP 10 SIGNS YOU MIGHT
BE DEALING WITH A
DANGEROUS EXPERT
WITNESS
10. “Expert reports are...
FINANCIAL EXPERT
WITNESS ISSUES

TOP 10 SIGNS YOU MIGHT
BE DEALING WITH A
DANGEROUS EXPERT
WITNESS
5. “You’ll never hear a...
FINANCIAL EXPERT
WITNESS ISSUES

EXCLUDING THE FINANCIAL
EXPERT WITNESS
– OR BEING SURE YOUR EXPERT
SURVIVES
FINANCIAL EXPERT
WITNESS ISSUES

MANTRA FOR THE
FINANCIAL EXPERT
• “Identify key variables, always
describe methodology, r...
DAUBERT CHECKLIST:
QUESTIONS FOR YOUR
EXPERT AND THE
OPPOSING EXPERT

FINANCIAL EXPERT
WITNESS ISSUES

•

Has anyone perfo...
DAUBERT CHECKLIST:
QUESTIONS FOR YOUR
EXPERT AND THE
OPPOSING EXPERT

FINANCIAL EXPERT
WITNESS ISSUES

•

Does the work yo...
DAUBERT CHECKLIST:
QUESTIONS FOR YOUR
EXPERT AND THE
OPPOSING EXPERT

FINANCIAL EXPERT
WITNESS ISSUES

•

Have you conside...
Financial Expert Witness Issues:
How to Handle the Dangerous
Financial Expert Witness

CONTACT US
SHERI FOX
1800 REPUBLIC ...
Upcoming SlideShare
Loading in...5
×

Financial Expert Witness Issues: How to Handle the Dangerous Financial Expert Witness

617

Published on

Financial Expert Witness Issues: How to Handle the Dangerous Financial Expert Witness by Decosimo Advisory Services & Baker Donelson

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
617
On Slideshare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Financial Expert Witness Issues: How to Handle the Dangerous Financial Expert Witness

  1. 1. Financial Expert Witness Issues: How to Handle the Dangerous Financial Expert Witness Decosimo Advisory Services & Baker Donelson
  2. 2. FINANCIAL EXPERT WITNESS ISSUES DANGEROUS TO WHOM? • You want your financial expert witness to be the financial expert witness who is dangerous to the opposing side • You don’t want your financial expert witness to be dangerous to your side
  3. 3. FINANCIAL EXPERT WITNESS ISSUES SO JUST WHO ARE THEY? • Who qualifies as a “dangerous expert witness?” • How do we unmask and expose them?
  4. 4. FINANCIAL EXPERT WITNESS ISSUES
  5. 5. DOES A LARGE FEE AUTOMATICALLY INDICATE BIAS ON THE PART OF THE FINANCIAL EXPERT WITNESS ISSUES • The defense’s financial expert witnesses in the Michael Jackson wrongful death case were paid $825,000 in fees • CPA testifying for plaintiffs as to what Jackson could have earned from a potential world tour had been paid over $322,000 - Jeff Gottlieb, Los Angeles Times, Michael Jackson trial: Pop star was ‘tapped out,’ millions in debt, August 12, 2013 Jeff Gottlieb, Los Angeles Times, Michael Jackson’s survivors vs. AEG: a gold mine for witnesses, August 3, 2013
  6. 6. DANGEROUS EXPERT WITNESS CATEGORY #1 FINANCIAL EXPERT WITNESS ISSUES • • • • Experienced, Knowledgeable, Qualified, Uses accepted methods, but… o Sells himself out by becoming intellectually dishonest
  7. 7. FINANCIAL EXPERT WITNESS ISSUES DANGEROUS EXPERT WITNESS CATEGORY #1 • Sells himself out by: – Ignoring evidence which is unfavorable to the opinion which he plans to express and often doesn’t share such evidence with his counsel – Misrepresenting the evidence used in his report and conclusions to the court – Often very pompous and verbose
  8. 8. FINANCIAL EXPERT WITNESS ISSUES
  9. 9. DANGEROUS EXPERT WITNESS CATEGORY #2 FINANCIAL EXPERT WITNESS ISSUES • • • • Experienced, Knowledgeable, Qualified, Uses accepted methods, but… o Does a deficient job by performing substandard work
  10. 10. FINANCIAL EXPERT WITNESS ISSUES Dangerous Expert Witness Category #2 • Substandard work often a result of one or more of these occurrences: – Lack of review of subordinates – Does not have or take adequate time to properly assess evidence and prepare his report and similarly his testimony – Often a result of the low fees being charged by the expert or an overly restrictive budget imposed by counsel
  11. 11. FINANCIAL EXPERT WITNESS ISSUES
  12. 12. FINANCIAL EXPERT WITNESS ISSUES DANGEROUS EXPERT WITNESS CATEGORY #3 • Experienced, • Knowledgeable, • Qualified, but… o Does NOT follow the accepted standards and methodologies
  13. 13. DANGEROUS EXPERT WITNESS CATEGORY #3 FINANCIAL EXPERT WITNESS ISSUES • • Ignores or “tweaks” accepted methodologies as a result of: – “Working backward” to reach a particular amount or goal in damages and makes calculations that result in that goal – Usually very persuasive in their testimonies – Often speak in very bold generalities “all smaller companies have poor accounting records” – Likes to tell all he knows, not just what the court needs to know
  14. 14. FINANCIAL EXPERT WITNESS ISSUES
  15. 15. FINANCIAL EXPERT WITNESS ISSUES DANGEROUS EXPERT WITNESS CATEGORY #4 • Inexperienced, • Unqualified, • Looking to expand his/her practice
  16. 16. DANGEROUS EXPERT WITNESS CATEGORY #4 FINANCIAL EXPERT WITNESS ISSUES • Everyone has to start somewhere... – Usually fees are lower and therefore can be attractive alternatives to clients – Often in smaller, seemingly less complex cases – Adequate training is paramount – Training can be evidenced by professional certifications and credentials
  17. 17. FINANCIAL EXPERT WITNESS ISSUES
  18. 18. FINANCIAL EXPERT WITNESS ISSUES TOP 10 SIGNS YOU MIGHT BE DEALING WITH A DANGEROUS EXPERT WITNESS 10. “Expert reports are due next Friday? Hey, that’s no problem.” 9.“…and my fees are a fourth of what those other guys are going to charge.” 8. “Sure, I can show damages of that amount.” 7. “No…, I can’t say that I’ve ever been an expert for the defense.” 6. “Don’t’ worry. There’s never been a case where I couldn’t come up with economic damages.”
  19. 19. FINANCIAL EXPERT WITNESS ISSUES TOP 10 SIGNS YOU MIGHT BE DEALING WITH A DANGEROUS EXPERT WITNESS 5. “You’ll never hear anything negative about your case from me!” 4.“I’ve been thinking about going to some format 3. “You don’t need to get another appraisal expert for that equipment. I’ve worked with lots of manufacturers in my career.” 2. “I don’t like to get too detailed in my report. I’ll just explain everything in my testimony.” 1. “Tell me the opinion you need and then I’ll tell you my fees. ”
  20. 20. FINANCIAL EXPERT WITNESS ISSUES EXCLUDING THE FINANCIAL EXPERT WITNESS – OR BEING SURE YOUR EXPERT SURVIVES
  21. 21. FINANCIAL EXPERT WITNESS ISSUES MANTRA FOR THE FINANCIAL EXPERT • “Identify key variables, always describe methodology, reason for its use and consistency of its application, cite published materials that support methodology and include causative factors of lost profits if appropriate.” - American Bar Association, “Expert Witnesses: Selecting, Retaining, Deposing and Examining Experts.”
  22. 22. DAUBERT CHECKLIST: QUESTIONS FOR YOUR EXPERT AND THE OPPOSING EXPERT FINANCIAL EXPERT WITNESS ISSUES • Has anyone performed a review of your work to see if it appears reasonable? • Have you followed all relevant standards? • Have you used proven methodologies? • If you have used an unusual method, has it been exposed to peer review, and if so, is there a basis upon which the method would gain general acceptance? • Is the methodology generally endorsed by experts in the field?
  23. 23. DAUBERT CHECKLIST: QUESTIONS FOR YOUR EXPERT AND THE OPPOSING EXPERT FINANCIAL EXPERT WITNESS ISSUES • Does the work you have done fit the facts of the case? • Is the underlying data you used reliable? Did you take reasonable steps to ensure the accuracy of the information on which the conclusions were based? • Have you considered alternative scenarios in reaching your conclusions? • How have you dealt with the facts that are inconsistence to those you used? • Have you been given relevant statutory or case law to assist you in developing your damage theory?
  24. 24. DAUBERT CHECKLIST: QUESTIONS FOR YOUR EXPERT AND THE OPPOSING EXPERT FINANCIAL EXPERT WITNESS ISSUES • Have you considered the track record of the relevant industry and the performance of comparables within that industry? • Are the assumptions used consistent with the facts?
  25. 25. Financial Expert Witness Issues: How to Handle the Dangerous Financial Expert Witness CONTACT US SHERI FOX 1800 REPUBLIC CENTRE 633 CHESNUT STREET CHATTANOOGA, TN 37450 (423) 209 - 4230 SHARON P. HAMRICK & MIKE COSTELLO TALLAN FINANCIAL CENTER SUITE 1100, TWO UNION SQUARE CHATTANOOGA, TN 37402 (423) 756-7100
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×