An Unimpeachable Cure for Delusive Exactness
This 15th article of the unimpeachable neutrality series discusses the pathology, symptoms, and treatment for a bad case of delusive exactness.
Delusive exactness affects thousands of financial experts every day and can be fatal to a case if left untreated. On balance, delusive exactness, as described herein, refers to the testimonial delirium exhibited by a financial expert witness that overstates the strength of their conclusion of damages or value beyond that which can or should reasonably be drawn from the application of the methods, data, or sources of information relied upon, considered, or applied to the facts of the case. Experts afflicted with delusional exactness will be more likely to take advocating for oneâ€™s own expert opinion to unacceptable levels by claiming that the way they arrived at their conclusion, opinion, or position is the only true answer or way to achieve the right, correct, or proper result. The testimonial delirium that is regurgitated by experts in the form of delusive exactness must be diagnosed as nothing more than an infectiously communicable strain of biased expert testimony, as there is typically more than one generally accepted way to arrive at an estimate of damages or value and even more databases, studies, assumptions, methodologies, and rates that can be utilized in route to said estimate. This 15th article of the unimpeachable neutrality series discusses the pathology, symptoms, and treatment for a bad case of delusive exactness.
The pathology (cause) of delusive exactness relative to financial expert testimony, in part, stems from the precise nature of financial computations and math in general. Having the job title of â€śexpertâ€ť comes with an incredible amount of pressure, which demands a very high level of precision, but not perfection. While it is most certainly possible for a mistake to be made by a financial expert witness when determining a damage estimate or estimate of value, these computations more often than not involve some element of subjectivity, speculation, and informed professional judgment as a means of determining the appropriate approach, methodology, method, growth rate, discount rate, earnings base, benefit stream, and countless other variables, assumptions, or factors. Experts suffering from delusional exactness are unable to admit or realize this truth and, in turn, will claim that the opinions proffered, or data used to derive rates or variables for workforce participation, life expectancy, capitalization rates, or a plethora of discount rate variations is more or less precise, accurate, or even wrong.
The symptoms of delusional exactness are not always easy to identify, as most experts, judges, and attorneys fail to realize that they suffer from this infectious ailment. One tell-tell sign of delusional exactness is testimonial overstatement, which occurs upon any inference, implication, or representation by a financial expert that a particular data set, methodology, approach, or position taken to determine an estimate of value or damages is inherently superior, correct, or infallible in all cases or that any deviation is or would be an error, a mistake, or just flat wrong. The impending side effects of proffering such claims may result in jury drowsiness, legal headaches, and an overall tendency to overstate the strength of a financial expertâ€™s conclusions that can reasonably be drawn by the application of the methods they applied, or claim should have been applied to the facts. The most common symptom of delusive exactness often rears its ugly head when an opposing financial expert or their proponent falsely claims that there is only one way to estimate damages or value in a given case or situation. Another symptom of delusive exactness exhibited by many experts is the false notion that a particular data base, data set, study, or source of information is the best or only appropriate source. Despite appearing seemingly asymptomatic, delusional exactness can affect even the most tenured of experts, as it is brought on by an everlasting desire to become the authority on said matter. The truth is that there can be no authority over the unknown or unknowable, as the reality is that expert opinions of damages or value are typically needed in cases where there is no right, correct, or accurate answer to the task at hand.
The treatment for delusional exactness tends to be a large dose of humble pie and as much unimpeachable neutrality as possible. The Amendment to Rule 702 (Testimony by Expert Witnesses) may help to remedy some but not all delusive exactness risks. Under the amended Rule 702, the party presenting the expert testimony will be required to establish, with a preponderance of evidence, that the expert’s methodology and principles are reliable, and that the expert consistently applied them to the specific case being considered for the expertâ€™s testimony to be admitted. The change to Rule 702 would, or at least could, also deal with an issue known as an â€śoverstatementâ€ť of an expertâ€™s conclusion, as the above changes would prevent a witness, once qualified as an expert, from overstating the strength of their conclusions that can reasonably be drawn by the application of the methods they applied to the facts. This may help to immunize unimpeachably neutral experts from any delusively exact overstatement since testimony admitted must already be helpful to the trier of fact, based on sufficient facts or data, a product of reliable principles and methods, and reasonably applied those principles and methods to the facts at hand.
Unacceptable levels of delusive exactness should be avoided by all financial experts, as the unimpeachably neutral reality is that most damage computations or value estimates are inherently going to contain some element of speculation. If an expert finds themselves in close contact with an expert suffering from delusive exactness, the resulting impairment can blur the lines between questions of fact, fiction, and law. Questions of law are typically decided by judges rather than juries and pertain to the interpretation and application of legal principles, statutes, regulations, or precedents in determining the legal rights, duties, and obligations of the parties involved. Questions of fact relate to the specific circumstances, events, or evidence presented in a case and are generally decided by a jury or by a judge in a bench trial by weighing the evidence, evaluating witness credibility, and making factual determinations based on the applicable standard of proof. In cases where a financial expertâ€™s task involves estimating value or damages, delusive exactness can mislead the court or trier of fact into believing that a difference in professional opinions is a mistake. A balance must be struck that delineates differing expert opinions resulting from an error or omission made during a mathematical exercise and differences deriving from the exercise of professional judgment. In the meantime, if you or an opposing expert suffers from delusional exactness, it is critical that the expert showing signs be (cross) examined or rebutted with care.
Zachary Meyers, CPA, CVA, has been retained in over 2,600 cases as a testifying, consulting, or joint/court appointed expert. He has testified and been qualified as an expert specific to civil, marital, and criminal litigation. Mr. Meyers was elected to the NACVA Standards Board in 2016, appointed Vice-Chair in 2017, elected Chair in 2018, and in 2019, was re-elected as Chair, which promulgates professional standards for financial professionals, analysts, and experts. Mr. Meyers was appointed as NACVA Standards Board liaison representative for the Global Association of Certified Valuators and Analysts (GACVA) Advisory Council in 2020, which liaises with NACVAâ€™s international chapters in Africa, Canada, Europe, India, Taiwan, and Southeast Asia. In 2021, Mr. Meyers was elected to the Business Valuation Resource Panel of The Appraisal Foundation (TAF), whose purpose is preserving and improving the public trust in valuation.
Mr. Meyers can be contacted at (304) 690-2619 or by e-mail to czmcpacva@CZMeyers.com.