Avoid Losing a Daubert Challenge: Some Best Practices for Expert Witnesses

Abstract

Accounting experts, like other experts hired for litigation cases, are subject to Daubert challenges. While the use of Daubert challenges was primarily in jury trials, a recent U.S. Tax Court case, Boltar LLC v. Commissioner, used the Daubert standards to discredit an “absurd” appraisal. To avoid the potential detrimental reputational and potential financial consequences and adverse effects on the clients, accounting experts must be aware of Daubert challenges and the standards by which their testimony will be judged. In this article, we discuss the Daubert challenge and the standards by which a judge will evaluate an expert's testimony in considering the admissibility of, or weight placed on, the expert's testimony. We also discuss some best practices and discuss the potential growing application of Daubert challenges in bench trials, as well as the potential that similar challenges may exist outside of the U.S. jurisdictions.