Property insurance claims litigation often requires hiring several experts. Policyholders may need to retain a construction cost expert and engineer to give opinions on property damage, a bad faith expert regarding claims handling practices, and an accountant regarding business income losses. Depending on the case, the list can quickly grow to include an architect, a hygienist, and many more.

Insurers almost always challenge the insured’s experts and the admissibility of those experts’ opinions at trial by filing a “Daubert” motion requesting that the court disallow expert opinions. Experts retained by policyholders and their lawyers should always be aware of the Federal Rules of Evidence regarding admissibility of expert opinion, and the Daubert factors. This is especially so when writing the expert report. Failure to do so may cause your expert opinion to be disallowed at trial—causing a huge blow to the insured’s case, and a waste of time and money.

The trial court has broad discretion in admitting evidence under Federal Rule of Evidence (“F.R.E.”) 702, and the Daubert factors are helpful but not definitive. F.R.E. 702 provides:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:

(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods; and

(d) the expert has reliably applied the principles and methods to the facts of the case.

Under F.R.E. 702, a trial judge must ensure that scientific testimony is both relevant and reliable. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147 (U.S. 1999); Daubert v. MerrellDow Pharmaceuticals, Inc., 509 U.S. 579 (U.S. 1993). Rule 702 essentially codifies the principles declared in Daubert and the cases which follow it, which require expert testimony be reliable before it may be admitted. Rule 702 does not subject expert witnesses to the evidentiary requirement of first hand knowledge because of the supposition that an expert’s opinion will have a reliable basis in the knowledge and experience of the expert’s discipline. Daubert, 509 U.S. at 592.

The determination as to the relevance and reliability of expert testimony is committed to the discretion of the trial court. Goebel v. Denver & Rio Grand Western Railroad Co., 215 F.3d 1083, 1087 (10th Cir. 2000). The trial court judge must therefore act as a gatekeeper to ensure that expert testimony is both reliable and relevant. Khumo at 147; Alfred v. Caterpillar,Inc., 262 F.3d 1083, 1086 (10th Cir. 2001). “The gatekeeper inquiry under Rule 702 is ultimately a flexible determination, keeping in mind that rejection of expert testimony has been the exception rather than the rule.” Ruff v. Ensign-Bickford Industries, Inc., 171 F. Supp.2d 1226, 1232 (D. Utah 2001) citing Goebel, 215 F.3d at 1089. This is also consistent with the U.S. Supreme Court’s recognition that, on balance, a jury should be presented with the necessary relevant evidence it needs to resolve issues unfamiliar to it, and that any prejudice arising from the so-called “suspect” nature of that evidence can be overcome by vigorous cross-examination and careful instructions. Daubert, 509 U.S. at 596.

Once hired as an expert, you must make sure your investigation, report and the opinions you will give at trial can stand up to scrutiny under criteria set forth in Daubert.

In Colorado and the Tenth Circuit, the courts apply Daubert as four nonexclusive factors that may be considered by the trial court in assessing the reliability of the expert’s opinion: (1) whether the opinion at issue is susceptible to testing and has been subjected to such testing; (2) whether the opinion has been subjected to peer review; (3) whether there is a known or potential rate of error associated with the methodology used and whether there are standards controlling the technique’s operation; and (4) whether the theory has been accepted in the scientific community. Hauck v. Michelin North America, Inc., 343 F.Supp.2d 976, 980 -981 (D. Colo. 2004). “The gatekeeper inquiry under Rule 702 is ultimately a flexible determination. But we specifically hold that a district court, when faced with a party’s objection, must adequately demonstrate by specific findings on the record that it has performed its duty as gatekeeper.” Goebel, 215 F.3d at 1088.

However, the U.S. Supreme Court has directed courts to look beyond the analysis
identified in Daubert, making it clear that there are categories of expert testimony that should be admitted even if they do not meet the Daubert criteria. In Kumho Tire, the U.S. Supreme Court expressly reviewed the law concerning admissibility of evidence of “specialized knowledge” following Daubert. The Court noted that many types of specialized knowledge lie outside traditional scientific previews and are necessarily based on personal knowledge or experience, such as handwriting analysis, criminal modus operandi, land valuation, and other areas of expertise not amenable to precise scientific testing. Kumho Tire, 526 U.S. at 150. Thus, the Court noted, Daubert’s list of factors can only be “helpful, not definitive,” and the trial court should be granted “considerable leeway in deciding in a particular case how to go about determining whether particular expert testimony is reliable.” Id. at 151-152; see also Hauck, 343 F.Supp.2d at 981 (“The list is not exclusive, and district courts applying Daubert have broad discretion to consider a variety of other factors.”).

Experts—Keep In Mind:

  1. Can I show I have the knowledge, skill, experience, training or education to express this opinion (or these opinions)?
  2. Is my methodology reliable and recognized by other experts in the field?
  3. Have I defined the methodology precisely in my report?
  4. Did I employ that methodology in this specific case?
  5. Is my opinion based on sufficient facts and data?

Your belief based on your experience and expertise in your field is not sufficient.

Although an expert witness is permitted wide latitude in offering opinions, including those which are not based on first-hand knowledge or observation, the opinions must have a reliable basis. Under Rule 702, admissible expert testimony must be based on actual knowledge and not subjective belief or unsupported speculation.

Squires ex rel. Squires v. Goodwin, No. 10-CV-00309-CBS-BNB, 2011 WL 5331583 (D. Colo. Nov. 7, 2011) quoting Mitchell v. Gencorp, Inc., 165 F.3d 778, 780 (10th Cir.1999).

Keeping the above in mind during each of your expert investigations and in writing reports will ensure your continued good reputation and record at trial.