A financial expert witness builds on a solid foundation constructed by a reputable source to reach a reliable conclusion. At times, multiple sources are used to reach a conclusion, and these are the assumptions and sources underlying the expert’s opinion. However, in order to survive a Daubert challenge in federal court, an expert requires the opportunity to question assumptions provided by management or the attorney, or to perform independent analyses and research.
Four Requirements for Expert Admissibility
Under Rule 702 of the Federal Rules of Evidence, federal courts are gatekeepers against expert testimony that is not sufficiently reliable or relevant, or that is offered by a person who is not sufficiently expert in the field of study that his or her testimony concerns.
Pursuant to this rule, either a plaintiff or defendant may raise a Daubert motion to exclude an expert’s opinion from evidence. A court will admit an expert’s opinion into evidence only if:
- The expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
- The testimony is based on adequate facts or data;
- The testimony is the product of reliable principles and methods; and
- The expert has reliably applied the principles and methods to the facts of the case.
If the economist’s testimony is not seen as reliable or relevant, the expert may fail the four-prong Daubert test because he neglects to apply his own principles and methods to the facts of the case. Courts are granted “great latitude” in determining whether an expert’s testimony is sufficiently reliable for a jury to consider. Regardless of the economist’s impressive credentials, his analyses would not help the trier of fact to better understand the evidence at hand.
Respect Your Expert’s Independence
Every expert witness opinion is based on some assumptions and limiting conditions, but clients and attorneys are likely to see their strategies backfire if they ask an expert witness to create a made-as-instructed opinion.
Avoid the temptation to perform your own in-house calculations to achieve a desired outcome or save costs. Financial experts must be free to perform their own independent analyses and research, as well as to critically evaluate the assumptions that underlie an opinion. An expert who merely rubber stamps a client’s economic damage projections will likely not survive a Daubert attack. To learn more about expert valuators, contact Filler & Associates.