1. Financial Expert Witness Issues: How to Handle the Dangerous Financial Expert Witness Decosimo Advisory Services & Baker Donelson

2. FINANCIAL EXPERT WITNESS ISSUESDANGEROUS TO WHOM? You want your nancial expert witness to be the nancial expert witness who is dangerous to the opposing side You dont want your nancial expert witness to be dangerous to your side 3. FINANCIAL EXPERT WITNESS ISSUESSO JUST WHO ARE THEY? Who qualies as a dangerous expert witness? How do we unmask and expose them? 4. FINANCIAL EXPERT WITNESS ISSUES 5. DOES A LARGE FEE AUTOMATICALLY INDICATE BIAS ON THE PART OF THEFINANCIAL EXPERT WITNESS ISSUES The defenses nancial expert witnesses in the Michael Jackson wrongful death case were paid $825,000 in fees CPA testifying for plaintis as to what Jackson could have earned from a potential world tour had been paid over $322,000 -Je Gottlieb, Los Angeles Times, Michael Jackson trial: Pop star was tapped out, millions in debt, August 12, 2013 Je Gottlieb, Los Angeles Times, Michael Jacksons survivors vs. AEG: a gold mine for witnesses, August 3, 2013 6. DANGEROUS EXPERT WITNESS CATEGORY #1FINANCIAL EXPERT WITNESS ISSUES Experienced, Knowledgeable, Qualied, Uses accepted methods, but o Sells himself out by becoming intellectually dishonest 7. FINANCIAL EXPERT WITNESS ISSUESDANGEROUS EXPERT WITNESS CATEGORY #1 Sells himself out by: Ignoring evidence which is unfavorable to the opinion which he plans to express and often doesnt share such evidence with his counsel Misrepresenting the evidence used in his report and conclusions to the court Often very pompous and verbose 8. FINANCIAL EXPERT WITNESS ISSUES 9. DANGEROUS EXPERT WITNESS CATEGORY #2FINANCIAL EXPERT WITNESS ISSUES Experienced, Knowledgeable, Qualied, Uses accepted methods, but o Does a decient job by performing substandard work 10. FINANCIAL EXPERT WITNESS ISSUESDangerous Expert Witness Category #2 Substandard work often a result of one or more of these occurrences: Lack of review of subordinates Does not have or take adequate time to properly assess evidence and prepare his report and similarly his testimony Often a result of the low fees being charged by the expert or an overly restrictive budget imposed by counsel 11. FINANCIAL EXPERT WITNESS ISSUES 12. FINANCIAL EXPERT WITNESS ISSUESDANGEROUS EXPERT WITNESS CATEGORY #3 Experienced, Knowledgeable, Qualied, but o Does NOT follow the accepted standards and methodologies 13. DANGEROUS EXPERT WITNESS CATEGORY #3FINANCIAL EXPERT WITNESS ISSUES Ignores or tweaks accepted methodologies as a result of: Working backward to reach a particular amount or goal in damages and makes calculations that result in that goal Usually very persuasive in their testimonies Often speak in very bold generalities all smaller companies have poor accounting records Likes to tell all he knows, not just what the court needs to know 14. FINANCIAL EXPERT WITNESS ISSUES 15. FINANCIAL EXPERT WITNESS ISSUESDANGEROUS EXPERT WITNESS CATEGORY #4 Inexperienced, Unqualied, Looking to expand his/her practice 16. DANGEROUS EXPERT WITNESS CATEGORY #4FINANCIAL EXPERT WITNESS ISSUESEveryone has to start somewhere... Usually fees are lower and therefore can be attractive alternatives to clients Often in smaller, seemingly less complex cases Adequate training is paramount Training can be evidenced by professional certications and credentials 17. FINANCIAL EXPERT WITNESS ISSUES 18. FINANCIAL EXPERT WITNESS ISSUESTOP 10 SIGNS YOU MIGHT BE DEALING WITH A DANGEROUS EXPERT WITNESS 10. Expert reports are due next Friday? Hey, thats no problem. 9.and my fees are a fourth of what those other guys are going to charge. 8. Sure, I can show damages of that amount. 7. No, I cant say that Ive ever been an expert for the defense. 6. Dont worry. Theres never been a case where I couldnt come up with economic damages. 19. FINANCIAL EXPERT WITNESS ISSUESTOP 10 SIGNS YOU MIGHT BE DEALING WITH A DANGEROUS EXPERT WITNESS 5. Youll never hear anything negative about your case from me! 4.Ive been thinking about going to some format 3. You dont need to get another appraisal expert for that equipment. Ive worked with lots of manufacturers in my career. 2. I dont like to get too detailed in my report. Ill just explain everything in my testimony. 1. Tell me the opinion you need and then Ill tell you my fees. 20. FINANCIAL EXPERT WITNESS ISSUESEXCLUDING THE FINANCIAL EXPERT WITNESS OR BEING SURE YOUR EXPERT SURVIVES 21. FINANCIAL EXPERT WITNESS ISSUESMANTRA FOR THE FINANCIAL EXPERT Identify key variables, always describe methodology, reason for its use and consistency of its application, cite published materials that support methodology and include causative factors of lost prots if appropriate. - American Bar Association, Expert Witnesses: Selecting, Retaining, Deposing and Examining Experts. 22. DAUBERT CHECKLIST: QUESTIONS FOR YOUR EXPERT AND THE OPPOSING EXPERTFINANCIAL EXPERT WITNESS ISSUESHas anyone performed a review of your work to see if it appears reasonable?Have you followed all relevant standards?Have you used proven methodologies?If you have used an unusual method, has it been exposed to peer review, and if so, is there a basis upon which the method would gain general acceptance?Is the methodology generally endorsed by experts in the eld? 23. DAUBERT CHECKLIST: QUESTIONS FOR YOUR EXPERT AND THE OPPOSING EXPERTFINANCIAL EXPERT WITNESS ISSUESDoes the work you have done t the facts of the case?Is the underlying data you used reliable? Did you take reasonable steps to ensure the accuracy of the information on which the conclusions were based?Have you considered alternative scenarios in reaching your conclusions?How have you dealt with the facts that are inconsistence to those you used?Have you been given relevant statutory or case law to assist you in developing your damage theory? 24. DAUBERT CHECKLIST: QUESTIONS FOR YOUR EXPERT AND THE OPPOSING EXPERTFINANCIAL EXPERT WITNESS ISSUESHave you considered the track record of the relevant industry and the performance of comparables within that industry?Are the assumptions used consistent with the facts? 25. Financial Expert Witness Issues: How to Handle the Dangerous Financial Expert WitnessCONTACT US SHERI FOX 1800 REPUBLIC CENTRE 633 CHESNUT STREET CHATTANOOGA, TN 37450 (423) 209 - 4230SHARON P. HAMRICK & MIKE COSTELLO TALLAN FINANCIAL CENTER SUITE 1100, TWO UNION SQUARE CHATTANOOGA, TN 37402 (423) 756-7100