Canadian Lawyer

44 A P R I L 2 0 1 7 w w w . C A N A D I A N L a w y e r m a g . c o m "What was the expert asked to do, and what documents was she given to do it? Start off with the engagement letter." Osborne also asks the valuations expert what she asked for, and what she actually received from her client, which can indicate what she was denied. Like Osborne, Christopher Richter, a partner in the litigation boutique firm of Woods LLP in Montreal, says he asks about the adverse expert's instructions. "Often wrapped up in that is what was the expert asked to do? That can sometimes be a useful area of cross-examination. If there were limits put on his scope of expertise, if he was asked to make certain assumptions or set in a certain direction in his retainer agreement, that can affect the validity of his result and his credibility." Understanding an adverse expert's methodology can be key to undermining it — or at least getting the valuation expert to agree with you. "What overall approach was used here?" Osborne asks. "Is it an income- or market- or asset-valuation approach? Is the expert to apply a discount or a premium? I would want to understand what adjustments were made to their conclusion at the end of the day." Brent Olthuis, a litigator at Hunter Litigation Chambers in Vancouver, notes that "like fashions, [approaches to providing valuations] tend to change over time. I'd look at what ques- tions were asked [in the report], what factual information was given to the expert and what methods did the expert follow in applying those facts or assumed facts in generating value." In general, says Richter, the biggest mistake valuation experts make is not taking into account all the facts, "because they were not given all the facts by their client when they were retained." They may have been asked to make certain assump- tions that are not correct, he says. Challenging facts and assumptions, rather than challenging the expert's expertise, makes evaluating the evidence easier for the judge, he adds. Richter provides an example of a faulty assumption. "If you're talking about a piece of property, and you're comparing it to other buildings in the neighbourhood, has that building [in question] been renovated recently? If your building has not been renovated in 30 years but ones you're comparing to have been, that's a fact R esearching the qualifications of the adverse expert is some- thing every practitioner does — or should do. Osborne says he does a Google search on every witness and proceeding, but especially experts, including any reported opinion they may have given evidence in, and whether their evidence, or rec- ommendations, were rejected. Sometimes, that can lead to discovering that a valuation expert is no longer accredited by the Canadian Institute of Chartered Business Valuators, for example, or that their evidence has been "thoroughly debunked" by a court previously, as Olthuis says he once discovered. And Osborne cross-examined an expert whose licence had been revoked in Ontario due to disciplinary proceedings but who had not divulged that to the court; "we made a great deal of that on cross." Osborne thinks of the cross-examination of a business valuation expert as a four-stage escalation of questions, though he hopes not to have to move through all four stages. Stage 1 is a non-confrontational review of financial statements. Stage 2 is qualifying the evidence in chief. Stage 3 is challenging the expert's opinion or methodology but not the value of the expert witness herself: "They made a mistake." And Stage 4, should the first three stages be unsuccessful in reaching resolution, is an attack on the expert's credibility, challenging the court to find the expert unreliable. Practitioners agree that there's a lot of subjective analysis in busi- ness valuations. "I'll test the temperature of the water incrementally, [and] I tend to try to decide early on whether I have a 'push-cross' or 'pull-cross.' If the expert is reasonable, and intellectually honest, . . . can I pull her toward my conclusion?" Osborne says. A "push-cross" won't agree on anything, "so I want to push her away from me as far as I can, to the point of letting her agree with me on the most basic statements, to undermine her." His favourite cross is when he has no questions at all, "and it's better to make the expert look OK for the evidence in chief," Osborne says. "It's a much harder hill to climb to call the expert a liar." The art of cross-examining an expert: research, research, research L E G A L R E P O RT \ L I T I G AT I O N Check out in-house counsel's best networking tool! The 2016/17 Lexpert CCCA/ACCJE Directory & Yearbook online edition is a user-friendly, outstanding key resource for all in-house counsel. Along with immediate access to more than 4,100 listees at more than 1,500 organizations, you'll also find fresh editorial content, information on deals and links to important resources. Directory listees and CCCA members can also receive log-in credentials for access to detailed contact information to be able to connect with colleagues or research the in-house bar. ANYWHERE. ANYTIME. ANY DEVICE. CONNECT WITH IN-HOUSE COUNSEL COLLEAGUES AT LEXPERT.CA/CCCA ntitled-1 1 2017-03-10 9:44 AM

• Cover