Just last week, John Stockdale Jr. (Schafer & Weiner) presented a case law update to the annual meeting of the Michigan Society of CPAs in Detroit. In the midst of his slides, he included the “Top 10 Issues With Experts,” or the problems that he and his law firm colleagues frequently encounter when working with appraisal experts in cases ranging from bankruptcy to shareholder dissent and oppression.
"I was first asked to talk about ‘nightmares in valuation cases’ over the years, but when I started reading through those cases, I realized that case nightmares come under two varieties: 1) being excluded under Daubert, or 2) you’ve given the testimony but you are found not credible,” Stockdale said. Rather than talk about the individual cases that resulted in these two situations, Stockdale chose to focus on the issues that lead to them—and the ways experts can avoid them:
- Communicate with the lawyer (see points 2 and 3).
- Understand the standard of value. In contexts such as shareholder dissent and divorce, “Michigan has unsettled standards of value,” Stockdale explains. “So you’re going to want to talk to your lawyer.”
- Understand the case. Or even more importantly, understand your role on the litigation team. The attorney is the quarterback, and depending on the case, he or she may want to make the call regarding what standard of value is appropriate to apply.
- Draft your report clearly.
- Put your backup in your report.
- Don’t argue in depositions or on the stand.
- Have a complete and detailed CV. Stockdale recalls a recent case in which the expert listed his two schools and his many hours of CPE, without specifying what all those hours entailed.
- Avoid technical jargon whenever possible in your written report and in testimony.
- Provide the documents you relied on.
- Ensure your credentials are current. Stockdale told of another recent case in which the expert allowed his credentials to lapse between his retention and trial.