In the US, most courts require expert witnesses to prove damage amounts with “reasonable certainty.” In other words, has the plaintiff’s expert presented sufficient evidence to make a fair estimate of damages? To offer an opinion under Rule 702, an expert must satisfy the court that his or her opinion is:
• Guided by principles, and
• Methods are regularly applied by others damages experts
Reasonable certainty means that profits that form the basis of economic damages need not be absolutely certain in order to calculate damages that have a reasonable basis. The question is: do “uncertain” profits differ from “certain” profits? Neither court nor jury is required to attain “certainty” in awarding damages; and this is just as true with respect to “value” as with respect to “profits.” Note that “uncertain profits” or “speculative value” are each a characterization of the evidence and not a classification of profits or value.
Reasonable certainty in damages cases is a question of whether the plaintiff has evidence and can value the impact by the probability of success. There is a borderline between permissible speculations to that of intolerable guesswork. A damage calculation need not prove that all elements are certain, but such calculations must be:
• Moored in facts
• Use sound methodologies
• Yield reasonable results
This Video outlines the rules, factors and guidelines for what is considered reasonable certainty.
Reasonable Certainty: new AICPA guidance on litigation’s favorite oxymoron