Financial expert challenges and the reason for exclusions remain consistent with past years. What can financial expert witnesses do to avoid these common pitfalls in the future?
We are pleased to present the 2019 Daubert Study, continuing our annual analysis of Daubert challenges to financial experts. In the 19 years since the U.S. Supreme Court’s 1999 ruling in Kumho Tire Co. v. Carmichael, we have analyzed 2,623 financial expert challenges, including 213 financial expert challenges decided during calendar year 2018.
Accountants and economists continue to be the most frequently challenged financial expert witnesses. Accountant exclusion rates have continually declined since 2016 (62% to 41%), even with an increasing number of Daubert challenges. Economist exclusion rates have remained steady since 2016 (around 44%).
Lack of reliability, either on its own or in combination with other factors, continues to be the primary reason financial expert witnesses are excluded. The reasons for exclusions due to reliability were driven primarily by the lack of sufficient facts/data or the use of methods that are not generally accepted.
In 2018, Daubert challenges to financial experts most frequently occurred in the Second, Fifth, and Ninth Circuits. Daubert challenges of financial expert witnesses in the 5th Circuit decreased in 2018 from prior years, potentially driven by a decrease in the number of intellectual property cases filed in the 5th Circuit.
“Financial experts frequently face Daubert challenges when providing expert testimony. It is important for Counsel and financial experts to understand the Daubert criteria, as well as the common reasons for expert exclusions, in order to maximize their chances of withstanding a Daubert challenge.”