Whitepaper 03 · Litigation supportPreparing a Financial Expert Under Rule 702.

Rule 702 codifies three Supreme Court decisions decided between 1993 and 1999. Counsel who retain financial experts should know what each one holds, because opposing briefs will quote all three.

Daubert v. Merrell Dow Pharmaceuticals (1993)

Decided June 28, 1993, Daubert held that the Federal Rules of Evidence, not the older Frye general-acceptance test, govern the admission of expert scientific testimony in federal trials. Under the rules, “the trial judge must ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable.”³ The Court listed considerations including whether the theory or technique can be and has been tested, whether it has been subjected to peer review and publication, its known or potential error rate, and whether it has attracted widespread acceptance within the relevant community. Relevance, which the Court called “fit,” asks whether the reasoning connects to the facts in dispute. The Court also reminded litigants that “vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof” remain the traditional means of attacking shaky but admissible evidence.³

General Electric Co. v. Joiner (1997)

Joiner, decided December 15, 1997, held that abuse of discretion is the standard for reviewing a trial court’s decision to admit or exclude expert evidence. It also rejected a rigid line between method and result: “conclusions and methodology are not entirely distinct from one another.” Nothing requires a court to admit opinion evidence “connected to existing data only by the ipse dixit of the expert,” and a court may conclude that “there is simply too great an analytical gap between the data and the opinion proffered.”⁴ The abuse-of-discretion standard means the hearing in the trial court is usually the whole fight.

Kumho Tire Co. v. Carmichael (1999)

Kumho Tire, decided March 23, 1999, settled that the gatekeeping obligation applies not only to scientific testimony but to testimony based on “technical” and “other specialized” knowledge.⁵ That is the category forensic accounting and fraud examination fall into. The Court treated the Daubert factors as flexible, to be used where they are reasonable measures of reliability, and stated the objective: the expert must employ in the courtroom “the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.”⁵

What the trilogy means for financial experts

Peer review and error rates rarely map neatly onto a bank-record reconstruction. The factors that do apply come from the 2000 committee note: whether the expert unjustifiably extrapolated from an accepted premise to an unfounded conclusion, whether the expert adequately accounted for obvious alternative explanations, whether the expert was as careful as in regular professional work outside paid litigation consulting, and whether the field is known to reach reliable results for the type of opinion offered.¹ Where a witness relies mainly on experience, the same note requires the witness to explain how that experience leads to the conclusion, why it is a sufficient basis and how it is reliably applied to the facts.¹

Rule 703 is the companion rule. An expert may base an opinion on facts or data the expert has been made aware of or personally observed, and inadmissible material may be used if experts in the field would reasonably rely on that kind of data.⁶ Summaries prepared by the client, interviews and third-party data can therefore support an opinion, but only if the expert can show why reliance on them was reasonable. Counsel retaining an examiner through the expert witness and litigation support practice should ask that question about every input before the report is drafted.

The admissibility standard is now nearly uniform. Disclosure procedure is not, and many avoidable problems are procedural: a report missing required contents, a late supplement, a draft that turns up in discovery.

Federal Rule 26(a)(2)(B)

A witness retained or specially employed to provide expert testimony must deliver a written report containing six elements: a complete statement of all opinions and the basis and reasons for them; the facts or data considered in forming them; any exhibits that will summarize or support them; the witness’s qualifications, including publications from the previous ten years; a list of cases in which the witness testified as an expert at trial or by deposition during the previous four years; and a statement of the compensation to be paid for the study and testimony.¹¹ Absent a stipulation or order, disclosures are due at least 90 days before trial, and rebuttal disclosures within 30 days after the other side’s.¹¹

The phrase “facts or data considered” is broader than “relied on.” Everything the expert reviewed belongs on the list, including documents that cut against the opinion. Drafts of the report are protected as trial-preparation material, and communications between counsel and a reporting expert are protected except to the extent they relate to compensation, identify facts or data counsel supplied that the expert considered, or identify assumptions counsel supplied that the expert relied on.¹¹ Those three exceptions are the communications opposing counsel will ask about.

The penalty for getting it wrong is concrete: under Rule 37(c)(1), a party that fails to provide information or identify a witness as Rule 26(a) or (e) requires may not use that information or witness at a hearing or trial unless the failure was substantially justified or harmless.¹²

Florida rule 1.280 and the 2025 amendments

Florida has no general expert report requirement. Under rule 1.280(c)(5)(A), a party may use interrogatories to require the other side to identify each expected trial expert, the subject matter, the substance of the facts and opinions, and a summary of the grounds for each opinion; disclosed experts may then be deposed under rule 1.390 without a court order.¹³ The same subdivision permits discovery of compensation, litigation experience, prior testimony and the approximate share of the expert’s work that is expert-witness work, but limits production of the expert’s financial records to unusual or compelling circumstances.¹³

The Florida Supreme Court’s civil case management amendments took effect January 1, 2025. They adopted almost all of the federal Rule 26(b)(1) proportionality text, added federal-style initial disclosures and a duty to supplement, barred a party from seeking discovery before meeting its own initial disclosure obligations, and extended rule 1.380 sanctions to failures to disclose or supplement. The initial disclosure requirement does not apply to actions commenced before that date.¹⁴ Two parts of the new rule touch financial experts directly. Initial disclosures must include a computation of each category of damages claimed with the supporting documents, and a party must supplement a disclosure or response in a timely manner if it learns it is incomplete or incorrect in some material respect.¹³ A damages expert retained late may find the client already committed to a computation in its initial disclosure.

Expert deadlines come from the case management order, which must include a deadline for completing expert discovery; in complex litigation under rule 1.201, additional experts after the naming deadline require good cause.¹³

Two Florida traps

First, rule 1.280(c)(5) has no counterpart to the federal protection for drafts and attorney-expert communications.¹³ Agree at the outset how drafts, notes and correspondence will be handled, and assume anything written may be requested. Second, section 57.071(2) bars taxing expert witness fees as costs unless the retaining party furnishes each opposing party a written report signed by the expert summarizing the opinions and their factual basis, including the documents and authorities relied upon, at least 5 days before the expert’s deposition or 20 days before the discovery cutoff, whichever is sooner, or as the court orders. The subsection does not apply to family law actions.¹⁵ How fees are billed and recovered is covered in our guide to expert witness fees.

Issue	Federal court	Florida state court
Admissibility standard	Rule 702 as amended December 1, 2023; proponent must show each element is more likely than not met.	§90.702 as amended in 2013 and adopted by the Florida Supreme Court on May 23, 2019; no express preponderance language.
Written report	Required from retained experts, with six required contents (Rule 26(a)(2)(B)).	No general report requirement. By interrogatory, a party must give the subject matter, the substance of the facts and opinions, and a summary of the grounds for each opinion (rule 1.280(c)(5)(A)).
Timing	At least 90 days before trial, rebuttal within 30 days, unless the court orders otherwise.	Set by the case management order, which must include a deadline for completing expert discovery (rule 1.200); complex cases follow rule 1.201.
Drafts and attorney communications	Drafts protected; attorney communications protected except compensation, facts or data supplied, and assumptions supplied.	No comparable provision in rule 1.280(c)(5). Plan on the assumption that drafts and communications may be sought.
Bias and compensation discovery	Compensation stated in the report; list of cases with testimony in the previous four years.	Scope of employment and compensation, litigation experience, prior testimony and an approximation of the share of work as an expert witness; financial records only in unusual or compelling circumstances.
Consulting (non-testifying) experts	Discoverable only under Rule 35(b) or exceptional circumstances.	Discoverable only under rule 1.360(b) or exceptional circumstances.
Failure to disclose	Rule 37(c)(1): the party may be barred from using the witness or information.	Rule 1.380 sanctions extend to failures to disclose or supplement after the 2025 amendments.
Taxable expert fees	Generally limited to statutory witness fees absent contract or statute.	Expert fees are taxable costs only if a signed written report summarizing opinions and their basis is served on time (§57.071(2)); this condition does not apply in family law cases.

Source: Fed. R. Civ. P. 26 and 37¹¹¹²; Fla. R. Civ. P. 1.200, 1.201, 1.280¹³; Florida Bar News¹⁴; Fla. Stat. §57.071¹⁵.

Most exclusion risks are settled before the expert writes a word of the report. The engagement should be designed so that, at a Daubert hearing, counsel can prove each Rule 702 element from the file.

1. 01

   Scope letter

   Define the questions, the role (consulting or testifying), the retaining party, the records to be supplied, conflicts cleared and how drafts and communications will be handled.

2. 02

   Data intake and custody

   Log every item received: source, date, format, hash value for electronic files, and completeness against what should exist.

3. 03

   Analysis in reproducible workpapers

   Every figure in the report traces to a workpaper and every workpaper to a source document, so a second examiner could rebuild the result.

4. 04

   Test the alternatives

   State the competing explanations, test each against the records, and run sensitivity checks on the assumptions that matter most.

5. 05

   Report and disclosure

   Draft to the applicable rule, phrase each opinion no more strongly than the analysis supports, and disclose before the deadline.

The stages track the elements of Rule 702 and Florida §90.702: data sufficiency, method, and reliable application.

The scope letter

The scope letter defines the questions the expert will answer, whether the expert is consulting or testifying, who the client is, which records counsel will supply and on what schedule, and what the expert will not do. It should state the role plainly: a consulting expert retained only for trial preparation is discoverable in federal court only under Rule 35(b) or on a showing of exceptional circumstances, and Florida applies the same limit through rule 1.280(c)(5)(B).¹¹¹³ Converting a consultant into a testifying expert later is possible, but everything the consultant considered then comes into play. In Florida, the letter should also record how drafts and communications will be handled, given the absence of a draft-protection rule.¹³

Chain of custody for financial data

Financial evidence is usually documentary, but the same discipline applies. Log each production: what it is, who produced it, when, in what format, and for electronic files a hash value that shows it has not changed. Record what is missing against what should exist, such as statement months, accounts referenced in transfers but never produced, or ledgers without the underlying bank records. That log is the expert’s answer to the Rule 702(b) question and to a section 90.705 voir dire.¹¹⁰

Reproducible workpapers

The test is whether a second examiner, given the file, could rebuild every number in the report. Each schedule should cite its source documents; each adjustment should be explained; formulas should be visible, not pasted as values. Workpapers built this way also make the “facts or data considered” disclosure straightforward.¹¹

Testing alternative hypotheses

Write the competing explanations down at the start and test them against the records: the other side’s theory, the innocent explanations for suspicious patterns, and the possibility that the records are incomplete. Run sensitivity checks on the assumptions that drive the result. If an assumption comes from counsel, identify it as such; in federal court, assumptions counsel supplies and the expert relies on are discoverable even when other communications are protected.¹¹ An opinion that survives its own alternatives is an opinion that reflects a reliable application of the method, which is what Rule 702(d) asks.¹