CVA Litigation Support and Expert Testimony Flashcards

In U.S. federal courts, the admissibility of expert testimony is governed primarily by:

Answer: Federal Rule of Evidence 702 and the Daubert standard

FRE 702 and the Daubert trilogy require that expert testimony be based on sufficient facts, reliable methodology, and proper application to the case facts.

Under the Daubert standard, a judge evaluating a valuation expert's methodology may consider:

Answer: Whether the methodology has been tested, peer-reviewed, and has a known error rate

Daubert factors include testability, peer review, known error rate, and general acceptance in the relevant professional community.

A CVA retained as a 'consulting expert' (non-testifying) in litigation:

Answer: Is typically protected from discovery and helps counsel understand valuation issues

Consulting experts are generally shielded from discovery under FRCP 26(b)(4)(D) and serve to advise counsel rather than present opinions to the court.

The 'reasonable certainty' standard applied to damages in business litigation generally requires that:

Answer: The fact of damages must be proven with certainty, but the amount may be estimated with reasonable probability

Courts distinguish between certainty of the existence of harm (required) and precision of the amount (reasonable probability suffices), giving experts flexibility in methodology.

Lost profits damages in a breach of contract case are typically calculated using which framework?

Answer: But-for revenues minus actual revenues, less saved costs, discounted to present value if future losses are included

Lost profits are measured as the difference between what the plaintiff would have earned 'but for' the breach and what it actually earned, net of mitigated or avoided costs.

Which of the following is a key distinction between 'lost profits' and 'lost business value' as damages theories?

Answer: Lost profits compensate for a finite stream of lost earnings; lost business value compensates for permanent destruction of the going concern

Courts generally do not allow double recovery; lost profits apply when the business survives but profits are temporarily impaired, while lost business value applies when the enterprise is destroyed.