Responding to ‘AI Usage in Valuation: A View From the Bench’
This is a letter to the editor from a veteran valuation expert in which he makes some insightful and thought-provoking comments on the above titled article that reveals the concerns judges have with the use of AI by testifying experts.
AI Usage in Valuation: A View From the Bench
Judges are increasingly concerned about artificial intelligence (AI) and its implications for the legal system and its use by testifying experts. Programs are being developed internally to educate the courts and lawyers on AI’s role in legal processes, and the valuation profession can play a key role in this effort, according to judges who spoke during a session at a recent conference.
Business Valuation Case Law Yearbook, 2025 Edition
February 2025 PDF (192 pages)
BVR (editor)
Business Valuation Resources, LLC
Worried judges grapple with AI, ask for help
Judges are increasingly concerned about artificial intelligence (AI) and its implications for the legal system and its use by testifying experts.
T.G. v. Cmty. Health Network (In re Civ. Commitment of)
Though this case did not deal with valuation or economic damages issues, it was nonetheless important in the application of the general rule governing who was an expert witness. The proposed expert here was a new resident in psychiatry. She was an M.D. who had focused her training on psychiatry. She actually treated the patient who was the subject of the hearing. The trial court allowed her as an expert saying that, “[g]iven the evidence of Dr. Bimberg's education, training, knowledge, and experience as well as the deference given to trial courts in these circumstances, we cannot say the court erred in qualifying Dr. Bimberg as an expert witness under Evidence 702(a).” The Indiana rule had an almost identical wording as FRE 702 did. In other words, an expert did not have to have gray hair in order to qualify as an expert.
Indiana Appellate Court Affirms Trial Court Decision to Allow New Psychiatry Resident to Testify as an Expert
Though this case did not deal with valuation or economic damages issues, it was nonetheless important in the application of the general rule governing who was an expert witness. The proposed expert here was a new resident in psychiatry. She was an M.D. who had focused her training on psychiatry. She actually treated the patient who was the subject of the hearing. The trial court allowed her as an expert saying that, “[g]iven the evidence of Dr. Bimberg's education, training, knowledge, and experience as well as the deference given to trial courts in these circumstances, we cannot say the court erred in qualifying Dr. Bimberg as an expert witness under Evidence 702(a).” The Indiana rule had an almost identical wording as FRE 702 did. In other words, an expert did not have to have gray hair in order to qualify as an expert.
Court KO’s AI-assisted damages analysis
The featured case in the January issue of Business Valuation Update is a New York matter in which a damages expert used an artificial intelligence tool to help with his analysis.
Tales From the Trenches Episode No. 2—Who Wrote the Report?
In a very contentious litigation, I was called to testify as to the reasonable compensation for a receiver. A limestone quarry company had been involved in a family dispute over ownership, and the court had appointed a receiver to operate the company and conduct a sale of the company.
Matter of Weber
The Surrogate Court of New York (i.e., essentially a probate court), in a case of first impression, determined the testimony of an expert witness to be unreliable and set standards for admission of testimony and reports based in part on the use of AI, including disclosure of the use of AI and the conduct of a Frye (similar to Daubert) hearing.
New York Surrogate Court Finds Testimony Based on AI as Unreliable and Sets Standards for Admission of AI-Based Testimony
The Surrogate Court of New York (i.e., essentially a probate court), in a case of first impression, determined the testimony of an expert witness to be unreliable and set standards for admission of testimony and reports based in part on the use of AI, including disclosure of the use of AI and the conduct of a Frye (similar to Daubert) hearing.
Supreme Court Unanimously Includes Life Insurance Proceeds Intended for Redemption of a Shareholder in the Value of the Corporation in the Estate
The U.S. Supreme Court ruled unanimously on June 6, 2024, that “[a] corporation’s contractual obligation to redeem shares is not necessarily a liability that reduces a corporation’s value for purposes of the federal estate tax.” Let's take a closer look at this ruling.
Business as usual (so far) under tougher Rule 702
The first reported appellate decision to cite the new Rule 702 changes has appeared, but there’s no sea change to report.
What to Do When You Have Too Little Information
A recent California appeal of a divorce case demonstrated a proper way of managing a situation where the valuation analyst had received insufficient information to allow for a conclusion of value as to an asset or assets.
The Wisdom of the Pastrami Sandwich: The Secret Sauce for Delivering Compelling Expert Testimony
In this workshop, forensic expert Michael Kaplan and jury trial consultant and communications specialist Jesse Wilson identify and explore the powerful storytelling skills that transform technically accurate, matter-of-fact testimony into a story that will persuade the jurors. Through the expert testimony of our attendee volunteers, Jesse and Michael demonstrate the incorporation of these skills into expert testimony, transforming otherwise factual and accurate testimony into powerful stories that become compelling expert testimony.
Business Valuation Case Law Yearbook, 2024 Edition
January 2024 PDF, Softcover (222 pages)
BVR (editor)
Business Valuation Resources, LLC
Working Effectively With Attorneys (How to Be a Better Expert)
You’ve honed your valuation skills through education, training, and experience and have been educating clients about what their businesses have been worth for years. Now litigation counsel is asking you to educate judges and juries about the economics of a complex commercial dispute. The best way to be an effective expert, in addition to having those well-honed skills, is to gain an understanding of both the litigation forum and the general needs of counsel. This ...
Storytelling for the Expert Witness (A BVR Workshop)
In this webinar, forensic expert Michael Kaplan and jury trial consultant and communications specialist Jesse Wilson introduce you to the powerful storytelling skills that will transform technically accurate, matter-of-fact testimony into a compelling and persuasive story.
New Rule 702 crackdown already impacting expert witnesses
Although they don’t officially go into effect until December 1, expert witnesses are already feeling the effects of the changes designed to strengthen Rule 702, which is the federal rule of evidence regarding testifying experts.
Paramount Fin. Commc’ns, Inc. v. Broadridge Inv’r Commc’n Sols., Inc.
In a post-judgment order and opinion, the court struck the testimony of the plaintiff’s damages expert witness and ordered a new trial on damages. The plaintiff moved for reconsideration of the order. The court denied the plaintiff’s motion in this breach of contract case. There was insufficient evidence in the record to support the damages calculation.
On Reconsideration, Court Affirms Decision to Exclude Testimony of Damages Expert
In a post-judgment order and opinion, the court struck the testimony of the plaintiff’s damages expert witness and ordered a new trial on damages. The plaintiff moved for reconsideration of the order. The court denied the plaintiff’s motion in this breach of contract case. There was insufficient evidence in the record to support the damages calculation.
A Good Example of a Powerful Visual for a Valuation Report
At the recent New York State Society of CPAs’ Business Valuation and Litigation Services Conference, Chris Mercer (Mercer Capital) gave a good example of an effective visual designed to convey a complex issue to a client or trier of fact.
Golock Capital, LLC v. VNUE, Inc.
The plaintiffs sued for breach of obligations on convertible promissory notes issued to the defendant. The defendant admitted it had not repaid the loans but contended that the rates of interest on the loans were “criminally usurious” and were, therefore, void. Following a bench trial, the U.S. District Court (New York) found that the interest rates were not usurious and ruled in favor of the plaintiffs, including an award for attorneys’ fees.
U.S. District Court (New York) Rules Interest Rates on Loans Are Not Usurious
The plaintiffs sued for breach of obligations on convertible promissory notes issued to the defendant. The defendant admitted it had not repaid the loans but contended that the rates of interest on the loans were “criminally usurious” and were, therefore, void. Following a bench trial, the U.S. District Court (New York) found that the interest rates were not usurious and ruled in favor of the plaintiffs, including an award for attorneys’ fees.
Business Valuation Case Law Yearbook, 2023 Edition
January 2023 PDF, Softcover (195 pages)
BVR (editor)
Business Valuation Resources, LLC
Business Valuation Update Yearbook, 2023 Edition
January 2023 PDF, Softcover (426 pages)
BVR (editor)
Business Valuation Resources, LLC