Expert Witnesses in Canada – An Appraiser’s Perspective

2. Expert Witnesses in Canada – An Appraiser’s Perspective Peter McLean AACI, P. App – President Tom Fox AACI, P. App – President Elect Appraisal Institute of Canada European Valuation Conference Dubrovnik, Croatia May 17, 2019

3. Appraisal Institute of Canada (AIC) • The Appraisal Institute of Canada (AIC) is Canada’s oldest and preeminent body of valuation professionals. • With approximately 5,500 members, AIC appraisers (valuers) account for approximately 80% of the real property valuation professionals in Canada. • AIC issues two designations: • AACI P. App – for members involved in all property types • CRA P. App – for members working solely in residential properties • All work completed by AIC members is in accordance with our CUSPAP standards. • AIC and TEGoVA are signatories to an agreement recognizing the qualifications and standards of the respective organizations.

4. Because it’s Canada • Canada is a federation of 10 Provinces and 3 Territories – under the Constitution the Provinces and Territories have the authority for the civil courts. • Common Law forms the basis for the civil litigation process in all provinces and territories – save for Quebec which utilizes the Napoleonic Code. • Most civil cases are dealt with in provincial / territorial courts – on rare occasions, a matter may be dealt with by the Supreme Court of Canada. • While this can result in differences in rulings and precedent the role of an appraiser – as an expert witness – remains essentially consistent.

5. AIC Members as Experts • AIC members must be qualified as experts by the courts in all Provinces, Territories and by the Supreme Court of Canada. • AIC members are engaged in a wide variety of civil matters including: • Property acquisition / disposition including expropriation. • Family law including matrimonial disputes and estates. • Property tax assessments and appeals. • Any other matter where the value of real property is being disputed. • Some members based their entire practice on litigation work – for others it is a less regular partof their day to day work.

6. The Expert Witness One part tightrope walker and a second part tug of war

7. Walking a Line • An AIC member will typically be engaged by either the plaintiff or the defendant – and will often find themselves facing another member “on the other side”. • Regardless of who they are engaged by – the member’s client is, in fact, the court or proceeding where the matter is being heard. They must remain unbiased in their testimony and conclusions. • The member’s representation is limited by their ethical and technical obligations under civil law and CUSPAP. • In broad terms, a member is obligated to provide an unbiased opinion of value – and their role as a witness is to support and justify their findings.

8. CUSPAP References • Our CUSPAP standards specifically reference expert testimony in a number of areas including the Appraisal Standard. • The rules applicable to the preparation of an appraisal carry through to – and specifically reference - the provision of expert testimony. • CUSPAP Standard 7.1.4 reads as follows: • To the extent that it is both possible and appropriate, an oral report that addresses value, including expert testimony, must comply with this Standard.

9. The Role of Counsel • Lawyers are independently engaged and are primarily bound by their duty to their client. • In a typical litigation, the lawyer will seek to discredit the opinion of experts engaged by the “other side”. • This results in what can be a challenging line of questioning by the lawyer. • While AIC members are expected to defend their own opinion they have an ethical obligation to respect the opinion of another member • CUSPAP 4.2.2 – It is unethical for a member to knowingly engage in conduct that would prejudice his/her professional status, the reputation of the Institute, the appraisal profession, or any other Member;

10. Avoiding this scenario..

11. Advice to Appraisers • When AIC members seek advice on acting as an expert witness there are some key principles: • Answer the questions posed by counsel – but limit the answers to the questions raised. • Do your “homework” • Focus on the key facts and findings contained in your report. • Do not deviate from the findings in the absence of different information. • Recognize that opposing counsel is seeking to “discount or discredit” your report or findings. • “Keep your cool”

12. Answer the Question-Then Stop • Opposing counsel will look for any avenue to discount your testimony. • Too often, appraisers will provide too long of an answer – and by doing so may inadvertently provide counsel with an opportunity to draw your findings or testimony into question.

13. Do Your Homework • When preparing for a proceeding it is essential to fully review all of the background material for the assignment – the “work file”. • It is more important to articulate “why” and “how” you reached the opinion of value then to focus solely on “what” the value is. • For a real property appraisal this could include explaining why a comparable property was selected for analysis and how you went about making any adjustments to arrive at a final opinion of value. • This is likely one of – if not the – most important phases in the process.

14. Focus on Facts and Findings • A well prepared report will include some key facts and findings. • Testimony should focus on, and echo, those and, wherever possible, the appraiser should “circle back” to those in providing their testimony. • Testimony that deviates from the facts and findings (in the report) will take away from your case.

15. Don’t Flinch • As an expert witness, your role is to defend the opinion of value you have provided. • You should not deviate from the position you are supporting in the absence of any new or differing information.

16. Know the Enemy.. • Opposing counsel’s role is to represent their client – which they will do by “poking holes” in your report. • Understand that they likely have engaged their own experts to review and critique your report. • They will focus on any “weaknesses” they see and will attempt to get you to alter or change your conclusions. • Unless there is a change in material fact – that you were not aware of at the time – you should not be prepared to back away from the opinion of value.

17. Keep Your Cool

18. Expert Testimony – Good Work for Appraisers? • Serving as an expert witness is perhaps one of the more challenging and stressful assignments an appraiser can take on. • It is the one case where sole goal of “the other side” is to discredit or discount the opinion an appraiser has provided. • It is, by nature, adversarial and not all appraisers are equipped to carry out this work. • Serving as an expert requires strong subject matter expertise, some solid preparation and, above all, an ability to “think on your feet”.

19. Thank you