The newest PricewaterhouseCoopers’ survey, Daubert Challenges to Financial Experts, confirms that business valuators do better against Daubert challenges than any other type of financial expert. Specific findings include:
- The number of challenges to financial expert witnesses rose to the highest level in the last 13 years, while the rate of successful challenges (45%) remained consistent with the historical average (46%).
- Challenges were concentrated in the 2nd, 5th, 6th, 7th, and 9th Circuits, which heard more than half (57%) of all challenges. The 2nd Circuit accounted for the highest percentage (15%) of the total challenges.
- In 2012, lack of relevance emerged as the most prevalent reason that a financial expert opinion was excluded. In the previous 12 years, lack of reliability was the top reason.
- Economists and accountants are the most frequently challenged financial expert witnesses. But in 2012, appraisers were the most likely to survive a challenge, while economists were the least likely to survive.
- Of all financial expert witnesses, intellectual property experts experience the highest exclusion rate.
- Exclusions more commonly result from the misuse of accepted methodologies than from the introduction of unusual or untested analytical methods.