Expert Witness Weak Claims: How I Evaluate If a Financial Claim Is Worth Pursuing
Blog: Weak claims
This may include somewhat of a legal commentary, but as a financial expert witness I am
often asked if a claim has a likelihood of success in court. I’m asked sometimes by a hiring
lawyer, before I begin an engagement. I’m asked at the deposition phase, as a way to
diminish my findings or for other purposes. And I might ask myself the same question –
after all I can be an advocate for a very wide variety of things, even if I could also
argue/advocate for/analyze the opposite.
As a CPA, CVA, CFE, Esq. who has reviewed 150+ potential litigation engagements, here is how I evaluate weak vs strong financial claims before I accept the engagement – so
attorneys don’t waste $15k-$50k on an expert who later says damages are zero.
Reasons Why Claims Are Weak – The 3 Filters I Use
Filter 1: Limiting Conditions or Assumptions
Sometimes it’s a limiting condition or assumption – that is, I assume that abc happened,
then in that scenario what are the damages (or the value etc). This is common, nothing to
be surprised about.
In expert reports, we call this hypothetical: “Assuming Plaintiff proves liability for breach of contract, damages are $X.” That’s normal and allowed under CCP 2034 and FRE 702.
A claim is weak when assumption swallows the case: “Assuming defendant defrauded
plaintiff, assuming plaintiff relied, assuming $1M revenue would have continued for 10
years with no competition…” – If you need 5 assumptions to get to damages, jury won’t buy
it. I tell attorney up front: Your damages theory requires too many assumptions, consider
narrowing to direct out-of-pocket.
Filter 2: Not Financially Viable
However, I have seen or been engaged on cases that are either so small that it’s not
financially viable to pay lawyers/experts or others that seem extremely hard to win. Perhaps there is very little evidence or the claims are unclear or lacking evidence.
Math I do on intake call:
- Plaintiff says damages $75k
- Attorney fees to try case: $75k-$150k (even on contingency, time value)
- Expert fees: $15k-$30k (report + deposition + trial)
- Total cost to get to verdict: $90k-$180k to recover $75k
Even if you win, you lose economically. For plaintiff, better to go small claims (up to $10k in California) or limited civil ($35k) without expert, or settle pre-litigation.
Exception: When plaintiff is former employee for counsel or family friend – so this seemed
to be the reason for it being undertaken when plaintiff probably couldn’t pay full legal fees
on the case. Not to say there wasn’t a valid claim or the amount wasn’t material to them,
but it definitely raises some eyebrows by outsiders. I tell attorneys: If you take small case asa favor, consider flat-fee expert or consulting-only engagement (no testimony) to keep costs down. I offer $3,500 preliminary damages
assessment for small cases so attorney can decide if worth filing.
Filter 3: Evidence Is Circumstantial or Complex Without Internal Help
There are forensic cases which either seem so complex or with only circumstantial
evidence or which require an internal CPA to organize that at first they either seem
overwhelming, flimsy or otherwise.
Example: Partner says “My partner stole $500k over 3 years” but only evidence is bank statements with 10,000 transactions and no narrative (see my Where’s the Evidence page).
That’s not weak claim, that’s unprepared claim. It becomes strong after client writes 2-page narrative linking transactions to personal expenses.
Weak evidence patterns that often lose:
- No contemporaneous documents – all based on memory 5 years later
- Oral agreement for 50/50 partnership, no written operating agreement – then claim
for breach
- Cash business with no POS – can’t prove revenue
H2: Examples of Weak Claims I’ve Seen and How They Could Have Been Strengthened
Example 1: Small Lending Case
Some examples are a recent lending case I had – the claim was so small it didn’t seem
financially logical for it to be pursued. I looked into it and plaintiff was a former employee for counsel.
What made it weak: $25k loan, no promissory note, only Venmo memo saying “loan,” defendant says it was gift/bonus.
How to strengthen: If you lend even $5k to friend/employee, get 1-page promissory note: amount, interest, repayment date, signature. Takes 5 minutes, saves $15k litigation. I now give clients template.
Example 2: Elder Abuse – Financial vs Physical
The term ‘elder abuse’ has wide meanings, and can be physical or emotional, or even financial. I have a current case where it did become physical – but is this a crime or does it relate to a business. And if it somehow relates to a business then what is the penalty – is it personal, is it criminal or does the business get fined? I’ve had other cases in this area and some attorneys frown on this cause of action being used too often.
Elder abuse (Welfare & Institutions Code 15610.30) is powerful claim in California – allows attorney fees, pain and suffering even without physical injury, and avoids $250k MICRA cap in some cases. But because it’s powerful, judges scrutinize it.
Weak elder abuse financial claim: 85-year-old father gifts $100k to son who is also caregiver, other sibling says it’s undue influence. No bank records showing diminished capacity, father had estate attorney draft gift.
Strong elder abuse claim: 85-year-old with dementia diagnosis, caregiver isolates elder, new power of attorney signed 2 weeks after diagnosis, $300k transferred to caregiver’s personal account, no consideration, bank records show elder previously was frugal.
Difference is medical records + bank records + timing. As forensic accountant, I tie bank transfers to medical timeline.
Example 3: Forensic Cases That Seem Overwhelming
Forensic cases which seem so complex or with only circumstantial evidence or which require an internal CPA to organize – I get these weekly. Recent case: $3M revenue e-commerce business, partner says other partner took $400k via “ads” to company owned by partner’s wife.
Initial evidence: 20,000 transactions, no organization.
We turned it strong by:
- Getting internal bookkeeper to identify which vendors are legitimate (she knew)
- Pulling Secretary of State – wife’s company registered to same home address as partner
- Pulling Google Ads and Facebook Ads invoices directly from platforms – showed
only $50k actual ad spend, not $400k
- Calculating damages: $350k excess
Circumstantial became direct.
It Is Important for Expert Witnesses to Critically Evaluate
It is important for expert witnesses to critically evaluate the merits of a case as they perform their analysis. This will help them be a better advocate for their position/analysis. Understanding the overall case is also important in calculating damages/valuation/forensic analysis.
My intake process now:
1. 15-minute free conflict check: Who are parties, what court, am I conflicted?
2. 30-minute paid case screen ($750): Attorney sends complaint, 2-page narrative, and 1 year P&L. I give opinion: Strong, medium, weak, and why, and estimate of expert fees vs damages range.
3. If weak: I tell attorney why – not enough evidence, not economically viable, or damages theory requires too many assumptions. I suggest: get more docs, consider small claims, or get additional cause of action (e.g., add 496(c) for treble damages).
4. If medium/strong: Engagement letter with limiting conditions clearly stated: “My opinion assumes jury finds liability for fraud. If jury finds no fraud, damages are $0.”
This saves attorney and client $15k-$30k per case