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Proposed changes in Federal Evidence Rules.

Marvin L. Stone, CPA, Denver, Colorado, a litigation services veteran and a member qfthe American Institute of CPAs litigation services sub-committee, describes proposed changes in, federal miles that could affect CPAs who offer services as expert witnesses.

There is growing dissatisfaction among lawyers, judges and the general public with the cost and slowness of our system of dispute resolution. Two efforts to streamline court procedures have been proposed. The more widely publicized effort, spearheaded by former Vice-President Dan Quayle, was developed by a special working group chaired by former Solicitor General Kenneth W. Starr at the behest of the President's Council on Competitiveness. With the recent change of administration, it appears unlikely this proposal will be given serious consideration. The other equally comprehensive proposal was developed by the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States. After public hearings, the Judicial Conference approved a slightly amended version in September 1992. The U.S. Supreme Court is now reviewing the proposed amendments to the Federal Rules of Civil Procedure, which must be transmitted to Congress by May 1, 1993. If Congress approves the amendments, the rule changes will take effect December 1, 1993.


The amendments contain general recommendations that would indirectly affect CPAs who provide litigation services by

1. Limiting the number (and, at the judge's discretion, the length) of depositions and the number of interrogatory requests.

2. Requiring voluntary disclosure of "core" information regarding disputed facts.

The amendments also set forth specific recommendations, summarized below, related to expert testimony.

Limit opinion testimony. There is widespread concern over some of the novel theories--sometimes characterized as "junk science"--propounded by expert witnesses in court proceedings. While disaffection with such testimony is aimed primarily at fields other than accounting, new limitations will affect CPAs.

Current rules permit experts to provide information that will assist the trier of fact; new rules would admit information only if it is "reasonably reliable" and will "substantially" assist the trier of fact.

Mandate pretrial disclosure. The committee would require experts to provide opposing counsel all information on which they have relied and to produce advance copies of all charts and exhibits. % eliminate surprises, the committee would prevent experts from testifying on information not previously disclosed and would require disclosure of any changes in the expert's opinions that occur during pretrial discovery.

Permit deposition of experts. Experts now may be deposed only if permitted by the court. While permission is usually granted, the committee recommends that such depositions no longer be subject to court discretion. Litigants would be entitled to depose opposing experts subject only to the general constraints on the number and length of depositions mentioned above.

Alter testimony rules. The committee would require the expert to provide a detailed, written report to adverse parties before the expert's deposition and would authorize judges, in nonjury cases, to require submission of an expert's direct testimony as a written report, subject to oral cross-examination.


Extensive discussion in Congress and in the press makes it likely some changes in the federal rules of civil procedure will occur. Since most state courts generally conform to the federal rules, practice throughout the nation's courts will likely be affected in the not-too-distant future despite considerable opposition from both plaintiff and defense lawyers.


CPAs offering litigation services will be greatly affected by enactment of these proposed rule changes. Because of the new voluntary disclosure requirements, a CPA assisting an attorney in a litigation engagement is likely to be engaged much earlier than is presently the case, even if the CPA is not to testify as an expert witness.

The new rules require that the identity of a CPA testifying as an expert witness be disclosed at least 90 days before trial. The disclosure must be accompanied by a written report, signed by the CPA, detailing the testimony to be offered. The report must be delivered before the CPA's deposition and must include

1. A complete statement of all opinions to be expressed and the bases for them.

2 . The supporting data and other information on which opinions are based.

3. The exhibits to be used to support them.

4. The witness's qualifications, including a list of all publications within the last 10 years.

5. The compensation to be paid the witness for the study or testimony

6. A list of other cases in which the witness has testified as an expert a deposition or trial within the last 4 years.

The report of a CPA whose expert testimony is intended solely to contradict or rebut another witness's testimony must be disclosed within 30 days after the other witness's disclosure. A CPA must supplement his or her written report or deposition testimony at least 30 days before trial if the practitioner becomes aware that previous disclosures may have been materially incomplete or incorrect.

The proposed rules' onerous disclosure requirements may well deter some plaintiffs from filing lawsuits, thus diminishing the number of potential litigation engagements. 0n the other hand, many of the suit brought will require more and earlier participation by CPAs who provide litigation services. Whether the new rules produce quicker and cheaper dispute resolution remains to be seen.


* GROWING dissatisfaction among lawyers, judges and the general public with the existing system of dispute resolution is behind two efforts to streamline court procedures.

* RECOMMENDATIONS that would affect CPAs who provide expert testimony include those that would limit opinion testimony, mandate experts' pretrial disclosure, permit deposition of experts and alter testimony rules.

* IT IS LIKELY some changes in federal rules of evidence will occur during the next 12 months, which could affect practice throughout the nation's courts.
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Article Details
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Author:Stone, Marvin L.
Publication:Journal of Accountancy
Date:Feb 1, 1993
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