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Why Expert Witness Certifications Matter In Litigation

By: Kaitlin Cardozo

Certifications help signal that someone is knowledgeable and competent in a given subject matter or area. For expert witnesses, a certification can be valuable for emphasizing their competency and eligibility to serve as an expert witness in court. On the other hand, expert witnesses who lack credentials have an uphill battle in proving their knowledge and ability to serve as an expert witness.

The following examples highlight why hiring an uncredentialed expert can be risky to a case.

Estate of Hoenshied v. Commissioner

The U.S. Tax Court rejected an appraisal that had been prepared to value the charitable contribution of shares in a closely-held corporation. In their decision, the Court found that the appraiser had not conformed with the Tax Code’s definition of a qualified appraiser, which is defined as someone who:

  • Has earned an appraisal designation from a recognized professional appraiser organization or has otherwise met minimum education and experience requirements set forth in regulations […],
  • Regularly performs appraisals for which the individual receives compensation, and
  • Meets such other requirements as may be prescribed by the Secretary in regulations or other guidance.

The Court also noted several critical errors in the appraisal work product:

  • The report cited the wrong date for the date of the charitable contribution
  • The report wasn’t signed by the appraiser
  • The appraiser didn’t adequately describe the property being appraised
  • The appraiser didn’t list his qualifications
  • The appraiser didn’t adequately describe the methods used for valuing the shares
  • The appraiser didn’t explain the basis for the valuation

However, in addition to the errors the appraiser made, the Court also noted that the appraiser had no certifications from professional appraisal organizations. The lack of professional valuator credentials underlined the appraiser’s lack of authority in business valuation and contributed to the Court’s rejection of the valuation report.

Vieira v. Think Tank Logistics, LLC

A bankruptcy case in South Carolina saw the attempted exclusion of a business valuation expert based on his lack of credentials. The valuation expert had prepared a report that estimated the value of the defendant’s ownership interest in two business entities and the value of consideration received by the defendant for his guarantee of company debt.

The defense, moving to exclude the expert, pointed to the expert’s lack of valuation credentials as well as lack of membership status to the American Society of Appraisers (ASA) and National Association of Certified Valuators and Appraisers (NACVA).

The Court ultimately did not exclude the expert and instead stated that, “gaps in an expert’s knowledge generally go to the weight of the witness’s testimony, not its admissibility,” and that, after a review of the expert’s reports and CV, they found the expert to be qualified as an expert witness. Recent amendments to the Federal Rules of Evidence (as discussed below), however, could change this outcome in future similar cases.

Amendments to Federal Rules of Evidence 702

The Federal Rules of Evidence govern the admission and exclusion of evidence in both criminal and civil litigation proceedings. Per Rule 702, “Testimony by Expert Witnesses,” “a witness is qualified as an expert by knowledge, skill, experience, training, or education.”

On December 1, 2023, amendments to the rule took affect that raised the standards for including expert witness testimony. Now, attorneys should prove that it is more likely than not that the expert will aid the trier-of-fact in understanding the case or matter. This change gives more authority to judges to exclude expert witnesses from testifying. As a consequence, the standard for the inclusion of expert witnesses’ testimony is even higher. It now becomes more important for expert witnesses to demonstrate their knowledge and experience to the Court and that their methods used are reliable and backed by peer review.

Although it is too soon to determine to what degree judges will increase their exclusion of expert witnesses from testifying, the raised standard will likely make it more difficult for expert witnesses without professional credentials to have their testimony admitted in court.

Credentials Really Do Matter

Although credentials are not enough on their own, they do help distinguish their holders as having the requisite education and training to opine on the matter at hand.

Credentials are often a shorthand way for the trier-of-fact to determine whether the individual testifying conforms to the definition of an expert witness and whether they have the capacity to produce a credible opinion. As the examples above show, credentials do matter.

Need a Credentialed Professional?

Our Forensic, Valuation & Litigation Support Group includes Certified Valuation Analysts, Certified Fraud Examiners, Certified Public Accountants as well as professionals who are Accredited in Business Valuation.

Contact us online or call us at 800.899.4623.

Published May 8, 2024

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