Wednesday, November 28, 2012

Critiquing an Expert Report: Step 4 - Nature of the Opinion

You have finished researching the author’s credentials, checking for scope limitations and identifying the major and minor assumptions underlying the conclusions. 
The fourth step in reviewing an expert report involves considering the actual conclusion itself and seeking to ascertain whether it reflects an expert opinion or merely calculations based on representations provided by management.  The extent to which the expert has relied upon inputs from management for underlying assumptions will affect the report’s credibility and the extent to which it can be relied upon as expert evidence.
According to the Rules of Civil Procedure, it is an expert’s duty to:
  1. Provide opinion evidence that is fair, objective and non-partisan;
  2. Provide opinion evidence that is related only to matters that are within the expert’s area of expertise; and
  3. Provide such additional assistance as the court may reasonably require to determine a matter in issue.
Has this duty been fulfilled if the expert report is based on input assumptions provided by management?  Has the expert provided opinion evidence?  Has the expert been objective and non-partisan?  Has the expert provided evidence within his/her area of expertise?  Has the expert provided the court with additional assistance required to determine a matter in issue?
To address these questions while reviewing the report a list of the assumptions that have been based upon information provided by management should be created.  The greater the reliance on assumptions provided by management the greater the likelihood that the conclusion represents calculations as opposed to "opinion evidence".
On this issue, The Litigator’s Guide to Expert Witnesses states that it is important to identify the basis upon which the expert has undertaken his/her work and the way in which the resulting analysis and conclusions can be used. [1]
The nature of an expert’s opinion depends on whether it is based on:
  1. Facts and assumptions provided to the expert specifically for the purposes of calculation; or
  2. Facts and assumptions drawn from independent research.
In the first instance, the quality of the expert report would not be improved with independent research since the underlying assumptions are subject to proof by other experts or by the introduction of facts.  Accordingly, any opinion rendered can only relate to a calculation conclusion and not the reasonability of the financial information included in the calculation. 
The second instance requires the expert to perform independent research with respect to the quality of all information being used to arrive at an opinion.  The quality of this research will often be the deciding factor in the acceptance with which the expert’s opinion meets.
The above two scenarios represent the extremes.  In reality, many expert reports will be based on a combination of these situations.  An effective reviewer will be able to identify the assumptions that the expert should have corroborated with independent research but chose to rely on information provided by management.  The greater the number of these types of assumptions the greater the chances that the report provides calculations as opposed to independent expert opinion evidence that can assist the court.
1.  The Litigator’s Guide to Expert Witnesses, Mark J. Freiman and Mark L. Berenblut, 1997, pages 83 and 84.

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