A Cautionary Tale About Expert Testimony in Damages Calculations by Joel Glick, CPA/CFF, CFE, CGMA

Posted on September 19, 2023 by Joel Glick

A Pennsylvania judge recently vacated a plaintiff’s $25 million damages award based on the plaintiff’s expert failure to provide at trial “a sufficient factual basis” for the numbers he relied on for calculating lost profits.

Although the judge in Paramount Financial: Civil Action Communications, et al. v. Broadridge investor: Communications Solutions agreed with the jury’s verdict finding the defendant “breached the contract and did so with gross negligence and willful misconduct,” he found the plaintiff’s expert 1) did not attempt to independently investigate and verify the accuracy of the information provided to him by the plaintiff; 2)   did not introduce any evidence with a reasonable basis of the facts underlying his assumptions; and therefore 3) did not use complete data in his report.

Under the Federal Rules of Evidence 702, a witness qualified as an expert by knowledge, skill, experience, training or education may testify in the form of an opinion or otherwise if the following criteria are met:

According to the U.S. District Court for the Eastern District of Pennsylvania, plaintiff’s testimony was neither helpful nor based on sufficient facts under Federal Rule of Evidence 702. Moreover, “Although mathematical certainty is not typically required, the general rule in Pennsylvania, as in most jurisdictions, is that if damages are difficult to establish, an injured party need only prove damages with reasonable certainty.” ATACS Corp. v. Trans World Commc’ns, Inc., 155 F.3d 659, 669 (3d Cir. 1998).

“At a minimum, reasonable certainty embraces a rough calculation that is not ‘too speculative, vague or contingent’ upon some unknown factor.” Id. at 669-70 (citing Spang & Co. v. U.S. Steel Corp., 545 A.2d 861, 866 (Pa. 1988)).”

The Court in Paramount v. Broadridge found expert testimony insufficient evidence to reach a verdict as to damages. It subsequently ordered expert testimony to be stricken and the damages award vacated in toto while granting the defendant’s motion for a new trial as to damages under Rule 59.

The moral of this story is that legal counsel must exercise caution and understand that client-provided data must be verified and tested for accuracy by expert witnesses before calculating damages or bringing those opinions to trial.

The advisors and accountants with Berkowitz Pollack Brant’s Forensic and Advisory Services practice have extensive experience working with law firms, attorneys and their clients to conduct economic damages analysis, business valuations and accounting investigations and provide expert testimony in commercial disputes and matters involving corporate fraud.

About the Author: Joel Glick, CPA/CFF, CFE, CGMA, is a director in the Forensic and Advisory Services practice with Berkowitz Pollack Brant, where he serves as a litigation consultant and expert in forensic accounting matters relating to bankruptcy and receivership, economic damages and forensic investigations. He can be reached at the CPA firm’s Miami office at (305) 379-7000 or via email at