By Tom Pastore, CEO & Co-Founder of Sanli Pastore & Hill, Inc.
In the intricate realm of litigation, where the stakes are often high and the details complex, economic and forensic analysis emerges as a linchpin in uncovering critical evidence. Expert insights not only bolster legal arguments but also shed light on nuanced economic realities, proving indispensable in modern legal proceedings.
Increasing Demand for Expert Witness Testimony
The demand for expert witnesses in litigation has grown exponentially, particularly in complex cases requiring specialized knowledge. As the Department of Justice aptly notes: “The pursuit of complex litigation by the Department would not be possible without qualified experts to testify and to refute the non-legal particulars of individual cases”[1]. This underscores the irreplaceable role of experts in breaking down intricate economic and forensic matters for judges and juries.
Expanding Budgets and Rising Expectations
The need for expert witnesses has prompted significant budget increases to accommodate their services. For Fiscal Year 2025, funding for expert witness-related activities by the Federal Government is set to rise by 18.5%, from $270 million to $320 million, according to SP&H’s budget analysis. As noted in the Department of Justice’s budget request, “A program increase will assist the Department with continuing to provide expert witnesses in cases that have grown in volume, complexity, and scope”[2]. Moreover, “Given the increased need for expert witness services year-over-year and the contractual requirements associated to FEW related contracts, additional funding is anticipated to be needed in future years”[3].
Key Areas Driving Demand
Several areas of litigation are poised for substantial growth, further driving the demand for expert testimony:Intellectual Property Cases Related to AI Technology“Nearly half of respondents (46%) expect the increased use of AI technology to contribute to IP exposure over the next year”[4]. Regulatory Proceedings Against Technology Companies“More than half of technology respondents (51%) expect the number of regulatory proceedings commenced against their organizations to grow in 2024”[5]. SEC Enforcement Actions and Subsequent Litigation“The SEC’s rules[6] can be expected to lead to more litigation from the SEC, as well as shareholder class actions”. In addition, Jennie Wang Vongcannon, Partner at Crowell & Moring, adds, “experience has shown that SEC enforcement actions are often followed by DOJ enforcement actions and, ultimately, more litigation”[7]. AI-Related Antitrust Litigation“AI-related antitrust litigation is likely to grow. The volume of cases is rising, driven by a powerful mix of few legal precedents, a generative AI market that’s exploding, and increasing scrutiny for violations by federal authorities and the plaintiffs’ bar.”These trends highlight the convergence of technological innovation, regulatory pressures, and evolving legal landscapes, making expert witnesses indispensable in navigating these multifaceted challenges.
The Role of Economic Analysis in Litigation
Selecting the right expert in cases involving economic damages and forensic analyses is pivotal for attorneys and their clients. Here’s why:
Precision in Economic Damages: Thoroughly analyzed and precisely calculated economic damages are crucial for attorneys presenting their case. These calculations must be supported by independent, unbiased, and well-documented research to withstand scrutiny in court.
Experience Matters: An experienced expert witness who has testified in numerous trials and depositions brings unparalleled insights. With a long tenure in federal and state courts across the United States, these experts employ a wide range of evidence-based solutions to support legal arguments effectively.
Interdisciplinary Expertise: A broad background in business valuation, auditing, and forensic analyses equips an expert to tackle diverse economic damages. A CPA with expertise in financial reconstructions, lost profits analysis, and business valuation enhances the credibility and robustness of expert reports and testimony.
The 3 E’s of Expert Witness Selection: Experience, Expertise, and Excellence
Attorneys benefit most from expert witnesses who consistently deliver proven results over decades. The ideal expert embodies the 3 E’s:
Experience: A long-standing track record of impactful testimony in high-stakes litigation.
Expertise: A deep and interdisciplinary understanding of economic, financial, and forensic matters.
Excellence: A commitment to meticulous research, unbiased analysis, and clear communication.
Conclusion
As litigation becomes more complex and technologically advanced, the role of economic and forensic experts becomes increasingly vital. Their insights not only uncover critical evidence but also shape the trajectory of legal arguments, ensuring that the truth prevails. In a landscape where precision, integrity, and expertise are paramount, these experts stand as pillars of justice, unveiling the truth in even the most convoluted cases.
[1] Department of Justice, Fees and Expenses of Witnesses, FY 2025 President’s Budget
[2] Ibid.
[3] Ibid.
[4] Norton Rose Fulbright, 2024 Annual Litigation Trends Survey
[5] Ibid.
[6] The SEC introduced new rules regarding disclosure of cybersecurity and data breaches for publicly traded companies in July 2023.
[7] Crowell & Moring, LLP. Litigation Forecast 2024