Complex commercial disputes: Causation

Expert testimony regarding damages is often challenged on the basis that the expert has failed to properly consider causation. In some cases, the courts have ruled that the expert is allowed to assume causation and does not have to do further work to evaluate the causal linkage. In others, the courts have ruled that expert opinions should be excluded for failing to consider causation.

There are certain factors that may merit consideration, whether the expert assumes causation, or performs analyses around the causal linkage. In a situation where the expert has assumed causation, the courts appear to be more willing and likely to allow that testimony when:

  • The damages are most directly linked to the liability issues, such as in personal injury, wrongful death and business interruption matters
  • The expert has applied accepted methodologies to calculate the amount of damages
  • The calculation of damages does not rely on speculative assumptions, nor does it involve significant complexities that raise questions about alternative explanations of loss
  • No other obvious unaccounted-for causes of the damages are evident
  • Multiple experts have been retained, including an expert providing reliable opinions
    on causation.

In situations where the expert has specifically opined on causation, and was challenged, the courts appear to be more inclined to allow the testimony when the expert:

  • Has sufficient experience with the issues presented or relies on the expertise of others with sufficient, relevant experience
  • Calculates damages using multiple methodologies and then reconciles the calculations to evaluate whether the causal theory is supported
  • Evaluates alternative causes of loss, and either rules out other causes, or accounts for other causes in the analysis

The courts appear to be more inclined to allow expert testimony when causation is assumed when there is a ready link between the liability and damage issues, and alternative causes of loss are not evident.

Similarly, the courts appear to be more inclined to admit expert testimony on the causal linkage when the expert demonstrations application of the requisite expertise to the analysis, and has considered other potential causal factors.

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