In commercial damages cases, we as experts find ourselves relying on information provided by our clients that many times incorporates management’s own assumptions and assertions. This information can include items such as financial projections, business plans and growth plans.
Special consideration needs to be given to certain information if the expert intends to rely on that as a foundation for the damage calculation and that information contains significant assumptions and assertions made by management:
Based on a review of case law, the Courts have weighed a number of factors when evaluating the admissibility of expert testimony that is premised either in whole or in part on client supplied data, including:
Irrespective of whether the Courts have accepted or rejected an expert’s opinion, the key takeaway from the case law is that experts are in a better position if they can point to their own independent analysis to establish the reasonableness of client-supplied information. From a practical standpoint, testing and analysis that can help support an expert’s reliance on client-supplied information include, among others:
There is no formula prescribed by the Courts to ensure that an expert’s opinion will be allowed when relying on client-supplied information such as projections. However, if the expert understands how the information was put together, what key assumptions were used and has performed some level of independent analysis to establish the reasonableness of that information, the expert will be in a better position to defend his or her opinion at trial.
For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.