Daubert and Kumho Tire case digests added to BVLaw™

It’s been ten years since the U.S. Supreme Court expanded its ruling in Daubert v. Merrell Dow Pharmaceuticals, Inc. to all types of technical expert testimony—including financial experts and business appraisers—in Kumho Tire v. Carmichael. PriceWaterhouseCoopers has just released its new Daubert Challenges to Financial Experts: A Ten-year Study of Trends and Outcomes, 2000 to 2009. After examining over 5,200 Daubert challenges to expert witnesses of all types, in federal and state courts, the PwC study concludes:

  • Since Kumho Tire, the number of challenges to all types of expert witnesses has increased rapidly, rising from 253 in 2000 to 704 in 2007 to a record 869 in 2009.
  • The number of Daubert challenges to financial expert witnesses has also increased every year: For example, financial experts met 168 challenges in 2009, representing an 8% increase over 2008, which saw a 34% increase from 2007.
  • Economists, accountants, and appraisers are more frequently challenged than all other financial experts, accounting for 23%, 21%, and 8% of all challenges to financial experts, respectively, during 2000–2009.
  • Although more frequently challenged, economists, accountants, and appraisers were more likely to survive a Daubert challenge, enjoying a 51% higher success rate than other financial types.
  • Courts excluded appraisers much less frequently in 2009 compared with the 10-year average. Conversely, courts excluded economists more frequently.
The frequency of Daubert motions also vary widely by jurisdiction, the PwC study found, and plaintiff’s experts are challenged two to three times more often than defense experts (but notably, their exclusion rate is lower).

The Daubert standard applies in most courtrooms today (some states still apply the “general acceptance” or so-called Frye rule). The Supreme Court’s discussion of the Frye rule, the gate-keeping function of trial judges generally—and its four-part test for admissibility of expert evidence under the Federal Rules—is a critical reading for any financial expert.

The full-text of both opinions are now available at BVLaw™.