Legal Issues for Experts: How Lawyers Exclude Expert Witnesses and How to Avoid It
The 4 C’s for experts – clear communication, coachability, confidence, and candor. These are very important characteristics. Communication is obvious – it is important for experts, whether they are communicating with clients, lawyers, opposition or courts.
As a CPA, CVA, Esq. who has been expert witness in 150+ cases and now also an attorney, here are the legal issues that actually get experts excluded in California and Federal court.
How to Avoid Career Ending Traps for the Unwary
How to avoid career ending traps for the unwary – many of these relate to forming opinions on areas outside of one’s expertise or not using sound methods in expert witness work.
Trap 1: Opining Outside Your Lane
You are CPA, CVA – you can opine on business valuation, lost profits, forensic accounting. You cannot opine on legal conclusions: “Defendant breached fiduciary duty.” That’s for the judge/jury. You CAN opine: “Defendant took $500k in excess distributions not permitted under Section 5.2 of operating agreement, which reduced plaintiff’s pro-rata share by $250k.”
I have seen CPA’s excluded for opining on “intent to defraud” – that’s mens rea, legal conclusion. Instead opine: “Transactions show characteristics of fraud per ACFE: 12 personal expenses coded as business.”
Trap 2: Not Using Sound Methods
Under Sargon in California and Daubert federally, your method must be reliable and generally accepted. Lost profits must use before-and-after, yardstick, or market model – not just “I think they lost $1M.”
My lost profits reports typically show: historical revenue trend, industry growth rate, but-for revenue, actual revenue, incremental costs, and prejudgment interest at 10% (CCP 3287). That survives Sargon.
Trap 3: Inconsistent Opinions
Your deposition testimony must match report. Opposing counsel will have transcripts of every prior testimony. If you said gross margin is 40% in one case and 60% in similar case with no explanation, you lose credibility.
The Scope and Limits of Discovery and Your Options to Fight Back
The scope and limits of discovery and your options to fight back against unreasonable discovery requests and abuse – this relates more to requests of parties but any request of anyone should always be analyzed to make sure that it’s reasonable.
Under CCP 2034.210, expert discovery includes: CV, fee schedule, testimony list (4 years), all reports, and all documents considered.
What you DON’T have to produce:
- Attorney-client communications labeled consulting expert work (before you were designated testifying expert)
- Draft reports under FRCP 26 (in federal court, drafts are protected) – but in California state court, drafts ARE discoverable unless you have engagement letter protecting them. I keep no drafts, only final workpapers.
Unreasonable requests: Opposing counsel subpoenas 10 years of your tax returns and all client files. You can move for protective order under CCP 2034.250 – burden outweighs relevance. I have successfully limited subpoena to testimony list and reports, not entire practice.
How Lawyers Exclude Expert Testimony and What You Can Do to Prevent Being Excluded
How lawyers exclude expert testimony and what you can do to prevent being excluded – similar to traps above, it’s all about being thorough, staying in one’s lane and using sound techniques.
The 3 Main Exclusion Motions in California:
1. Sargon Motion (CCP 801) – California’s Daubert
Opponent argues your opinion is speculative, lacks foundation. Judge acts as gatekeeper. To survive:
- Show matter relied upon is type reasonably relied upon by experts in field (bank statements, tax returns, POS data)
- Show methodology is reliable – Cite NACVA standards for valuation, ACFE for fraud
- Show data is sufficient – Don’t calculate lost profits on 2 months data
2. Motion in Limine Under Evidence Code 801/802
Expert lacks qualifications. If you are CPA without CVA/ABV, opponent will move to exclude your business valuation opinion. That’s why I got the CVA – and now Esq.
3. CCP 2034.300 – Failure to Timely Disclose Expert
If you disclose expert late, you are excluded unless you show mistake, inadvertence. Don’t be late. California requires expert disclosure 50 days before trial, supplemental 20 days before.
What Lawyers Can and Cannot Ask You at Deposition and Trial
What lawyers can and cannot ask you at deposition and trial, and why – again this is more for the parties but some lawyers ask inappropriate questions of experts or try to trap experts into saying/thinking things that are not correct.
At Deposition (CCP 2025):
- CAN ask: All opinions, basis, documents considered, compensation, prior testimony, prior exclusions, assumptions given by counsel, communications with retaining counsel (after designation)
- CANNOT ask: Communications with retaining counsel when you were consulting expert (before designation), attorney work product, how much retaining counsel is billing client (irrelevant)
At Trial:
- Cannot ask you to opine on ultimate legal issue: “Did defendant breach fiduciary duty?” Objection – calls for legal conclusion.
- CAN ask: “Did defendant’s conduct fall below standard of care for CFO?” – That’s expert opinion on standard of care, allowed.
Fees, Length, Scope:
California depositions are 7 hours max (CCP 2025.290). Expert fees must be reasonable – $400-$750/hr for CPA/CVA in Bay Area is reasonable. You can require payment in advance. If counsel doesn’t pay, you can refuse deposition and move for protective order.
Instructions not to answer: Only for privilege. Expert cannot refuse to answer because question is “stupid” – must answer or counsel instructs not to answer for privilege and you go to judge.
How a Lawsuit Works and Ethical Rules Attorneys Must Follow
How a lawsuit works and the ethical and other rules the attorneys must follow – this is more important for lawyers but can be helpful for experts to be aware of.
Attorneys must be professional/civil to one another and have a duty of candor to tribunal under CA Rule of Professional Conduct 3.3. That means they cannot knowingly present false evidence or hide adverse legal authority.
For experts, this means: If attorney asks you to change opinion to fit theory, you must refuse. I have fired clients who asked me to “make number higher.” Your credibility is your license – CPA license and now Bar license.
Anatomy of civil trial:
- Pleadings (Complaint, Answer)
- Discovery (12-18 months) – expert designated at end
- Motions practice (MSJ, Sargon motions)
- Settlement/mediation
- Pre-trial (MILs, 402 hearings)
- Trial – expert testimony typically 2-4 hours direct, 2+ hours cross
How to Think and Speak Like a Lawyer and Understand “Legalese”
How to think and speak like a lawyer and how to understand “legalese” – this is somewhat important for experts, though it is even better for them to think and speak like an expert! There is much ‘legalese’ – names of documents/pleadings, types of discovery etc.
Key terms experts must know:
- Complaint vs Cross-complaint
- Special Interrogatories vs Form Interrogatories
- Request for Production (RFP) vs Subpoena
- Deposition vs Declaration vs Affidavit
- Motion in Limine vs Motion for Summary Judgment
- 402 hearing vs 402 motion (hearing on admissibility of expert)
The Significance of the December 2023 Amendments to Federal Rule of Evidence 702
The significance of the December 2023 amendments to Federal Rule of Evidence 702 – The Rule was amended to clarify and emphasize that expert testimony may not be admitted unless the proponent demonstrates to the court by a preponderance of the evidence that the proffered testimony meets all of the Rule’s admissibility requirements
This is the biggest change in 20 years and most CPAs don’t know it.
Old 702: Many courts let questionable expert testimony go to jury, with cross-examination as cure.
New 702 (Dec 1, 2023): Proponent must prove by preponderance (51%) that:
- (a) Expert’s knowledge will help trier of fact
- (b) Testimony is based on sufficient facts or data
- (c) Testimony is product of reliable principles and methods
- (d) Expert’s opinion reflects reliable application of principles and methods to facts
And new Rule 702(d) emphasis: Expert must not overstate opinion – must stay within bounds of what method allows.
What this means for you hiring expert in 2025-2026:
If opposing expert’s report says “lost profits are $1M” but data is only 3 months and method is not explained, move to exclude under new 702. Judges are now required to keep it out, not let jury decide weight. This is huge for defense.
I write every report now with 702 checklist on page 1: Facts, Data, Method, Application – so hiring attorney can show judge preponderance.
H2: Issues That Give Rise to Expert Witness Liability and Risk Management
Issues that give rise to expert witness liability and risk management strategies for experts – this is also something that should be researched.
Experts can be sued for negligence by retaining party (if expert is really bad), but more commonly, expert’s license is at risk with Board of Accountancy if they do valuation without CVA.
Risk management:
- Engagement letter with indemnity clause and limitation to fee
- Malpractice insurance that covers expert witness work (not all CPA policies do)
- Never opine on legal conclusions
- Keep workpapers 7 years
- Get CVA/ABV for valuation, CFE for fraud
If you are an attorney looking for CPA expert witness who understands Sargon, new FRE 702, and how to avoid exclusion, or if you are an expert who wants to avoid traps, contact me at hpaccounting.com. As CPA, CVA, Esq., I live in both worlds.