Economic Damages & Lost Profits Expert Witness Services

What Litigants and Attorneys Should Clarify Before an Economic Damages Report Begins

A damages report gets stronger when the liability theory, damages period, model inputs, and required work product are defined before the calculations begin. Early document preservation strengthens the damages case. The following financial and operational records are typically essential for a lost profits or economic damages analysis:

• Three to five years of financial statements (income statement, balance sheet, cash flow)
• Federal and state business tax returns for the same period
• Monthly sales and revenue records, including invoices, contracts, and purchase orders
• Bank statements (business and, in some cases, personal)
• Payroll records and owner compensation documentation
• Accounts receivable and accounts payable aging schedules
• Business plans, projections, and budgets prepared before the harmful event
• Industry benchmark data and comparable company financials
• Contracts, license agreements, and insurance policies relevant to the claim
• Damages-related communications (emails, board minutes, reports to investors)
• Prior expert reports or damages analyses from opposing counsel

Gaps in records can be addressed through forensic reconstruction techniques. See our overview of expert witness and litigation support services for how we handle incomplete documentation.

What Happens After the Damages Theory Is Scoped

Once the liability theory, damages period, and required work product are agreed upon, the engagement moves into document collection, analysis, and report preparation. The expert team reviews all financial records, identifies gaps, requests supplemental materials, and applies the methodology that best fits the data and the legal standard in play. Written expert reports and deposition or trial testimony follow on the agreed-upon schedule.

Expert Witness Testimony & Rebuttal — Daubert-Ready Opinions

Every economic damages engagement at Joey Friedman CPA PA is built from the ground up to withstand Daubert gatekeeping and vigorous cross-examination. Our testimony framework includes:

• Methodology grounded in AICPA and NACVA standards — All approaches are consistent with generally accepted forensic accounting and business valuation practice, not invented for litigation.
• Testable and peer-reviewed foundation — Each method employed has been accepted in the forensic and economic literature and by Florida and federal courts in comparable matters.
• Disclosed assumptions and sensitivity analysis — We state every assumption explicitly and test the damages range under alternative assumptions so the trier of fact understands the boundaries of the opinion.
• Conservative, data-anchored opinions — Opinions are supported by documentary evidence and stated to a reasonable degree of professional certainty — not speculation.
• Rebuttal capability — We critically review opposing experts’ reports for methodological flaws, cherry-picked comparables, unsupported growth assumptions, improper cost treatment, and calculation errors. Written rebuttal reports are available for use at deposition, in Daubert motions, or at trial.
• Full work product retention — Complete files are retained and available for opposing counsel review consistent with applicable expert disclosure rules.

Frequently Asked Questions

What is the difference between economic damages and non-economic damages?

Economic damages are objectively measurable financial losses — lost profits, lost wages, medical expenses, and repair costs. Non-economic damages compensate for subjective harm such as pain, suffering, and loss of consortium. A CPA expert witness quantifies economic damages; non-economic damages are typically argued by counsel without expert financial testimony.

How are lost profits calculated in a business interruption claim?

The most common approach is the before-and-after method: comparing the business’s pre-event revenue trend to its post-event actual performance, with adjustments for variable costs avoided, mitigation, and intervening causes. The yardstick method may supplement or replace this when comparable industry data is more reliable than internal history.

What financial records are needed for a lost profits analysis?

Typically three to five years of financial statements, tax returns, monthly revenue records, bank statements, payroll records, and any projections or budgets prepared before the harmful event. The more complete the records, the stronger the damages model. We can work with incomplete records using forensic reconstruction techniques.

Can Joey Friedman serve as a rebuttal expert against an opposing damages expert?

Yes. Rebuttal engagements are a standard part of the practice. We review the opposing expert’s report, identify methodological weaknesses, unsupported assumptions, or calculation errors, and prepare a written rebuttal opinion for use at deposition, in Daubert motions, or at trial.

What does “Daubert-ready” mean for an economic damages report?

A Daubert-ready report is one that satisfies the four-part admissibility test under Daubert v. Merrell Dow: the methodology is testable, has been subjected to peer review, has known error rates, and is generally accepted in the relevant professional community. All reports prepared by this firm meet that standard and are designed to survive Daubert challenges.

What is the difference between lost profits and lost business value?

Lost profits measures the recurring income stream the business would have earned for a defined period. Lost business value (diminution in value) measures the permanent reduction in the going-concern worth of the enterprise attributable to the defendant’s conduct. The applicable measure depends on whether the harm was temporary or permanent and on the controlling legal standard. We analyze which model fits the facts at the outset of engagement.

How long does an economic damages engagement take?

Simple wage-loss or single-year lost profits analyses can often be completed in two to three weeks. Multi-year business interruption or lost business value engagements typically require six to ten weeks, depending on document availability and case complexity. We work within court-ordered expert disclosure deadlines.

What industries do you handle?

The firm has analyzed economic damages across professional services, healthcare, construction, real estate, retail, technology, financial services, and food & beverage. Case types include commercial litigation, business interruption, intellectual property infringement, employment disputes, partnership dissolution, personal injury, and insurance subrogation matters.

Are your fees contingent on the outcome of the case?

No. Expert witness fees are strictly time-based, never contingent on case outcome. Contingency-fee arrangements for expert witnesses are prohibited by professional standards and would impair the independence of the opinion. A retainer is collected at engagement; billing continues on a time-and-materials basis as work progresses.

How do I retain Joey Friedman as an economic damages expert witness?

Contact the firm using the online contact form or by phone to discuss whether the engagement fits the matter. A brief conflict check is completed before any formal engagement begins.