EXPERT WITNESS RULES, RULES AND MORE RULES PHILIP LEVI .

EXPERT WITNESS RULES, RULES AND MORE RULESThe role of the expert witness is to assist the court through the provision of anindependent and objective opinion about matters coming within the expertise of the witness.This duty is paramount. The new Rules streamline the qualification of experts and provide acode of conduct clarifying the duties and responsibilities of the expert witness in relation tothe Courts. Learn about the new Rules in Canada and the Provinces governing expertwitnesses, and how they may impact your investigation and testimony.PHILIP LEVI, CFE, FCPA, FCA, CPA/CFF, CA-IFAPartnerLevi & Sinclair, LLPQuebec, QuebecCanadaMr. Levi graduated in 1970 from McGill University and obtained his CA designation oneyear later and was licensed as a Certified Public Accountant in Maine, Florida and NorthCarolina in 1996. In 1991 Mr. Levi was recognized by the Ordre des Comptables Agréés duQuébec by conferring upon him the title fellow of the Ordre and in 2002, Mr. Levi waselected to the Board of Directors of the Quebec Order of Chartered Accountants and to itsexecutive committee in 2003.In 1992 he was named a Certified Fraud Examiner and became founding president of theAssociation's Montreal Chapter in 1994. He was re-elected as president in 1995 and selectedas the recipient of the Distinguished Achievement Award of the Association of CertifiedFraud Examiners in 1996. In 1997 Mr. Levi was elected to the Board of Regents of TheAssociation and was selected by the Regents to be Vice-Chairman of the Board. In 2007, Mr.Levi was selected by the 40,000 member Texas based Association of Certified FraudExaminers as the CFE of the Year.In 2000, Mr. Levi became one of 18 in Québec to be approved by the Alliance forExcellence in Investigative and Forensic Accounting of the Canadian Institute of CharteredAccountants and received the “Investigative and Forensic Accountant” designation . Mr.Levi was a member of the steering committee for the AICPA’s Annual Conference on Fraudfor several years and a member of its Fraud Advisory Committee. In 2008, Mr. Levi wasrecognized as “Certified in Financial Forensics” by the American Institute of CertifiedPublic Accountants.Mr. Levi has been invited to speak at Canadian and U.S. fraud conferences and has hadnumerous articles published on this subject. Mr. Levi has been a member of the teachingfaculty of the Association of Certified Fraud Examiners since 1995 and was the technologyeditor and is a member of the editorial board of its magazine, The Fraud Magazine. 2012

Mr. Levi has been engaged to provide expertise and testimony for the Crown Prosecutorof the Province of Quebec, The Quebec Provincial Police, the Montreal Police CommercialCrime Unit, the Syndic of the Order of Chartered Accountants of Quebec, Federal andOntario government agencies and numerous public & private Canadian Corporations. Duringhis 43 year career, he has testified in Federal Court in the States of New York, Pennsylvania,Texas, California, and Colorado, numerous times in the Quebec, Ontario and BritishColumbia court systems as well as the Supreme Court of The Bahamas and St. Kitts andNevis.“Association of Certified Fraud Examiners,” “Certified Fraud Examiner,” “CFE,” “ACFE,” and theACFE Logo are trademarks owned by the Association of Certified Fraud Examiners, Inc. The contents ofthis paper may not be transmitted, re-published, modified, reproduced, distributed, copied, or sold withoutthe prior consent of the author. 2012

EXPERT WITNESS RULES, RULES AND MORE RULESDefine Expert TestimonyIt is a time-honored rule of common law (and civil law)jurisdictions that witnesses ought only to relate theirpersonal observations of events. They are not to attempt toenter their opinions into evidence in a court of law. Themajor exception to this is the expert witness who, becauseof his knowledge or experience in a specific area, isallowed to give opinion evidence. Generally, the rationalebehind this is that judges can’t possibly be knowledgeablein all areas of human activity and in any event, many casesbefore the courts turn on a scientific issue or upon specialknowledge.“With respect to matters calling for special knowledge, anexpert in the field may draw inferences and state hisopinion. An expert’s function is precisely this: to providethe judge and jury with a ready-made inference which thejudge and jury, due to the technical nature of the facts, areunable to formulate. An expert’s opinion is admissible tofurnish the Court with scientific information which is likelyto be outside the experience and knowledge of a judge orjury. If on the proven facts a judge or jury can form theirown conclusions without help, then the opinion of theexpert is unnecessary.”—Supreme Court of Canada, R. v. Abbey, [1982] 2 S.C.R.24“Admission of expert evidence depends on the applicationof the following criteria:(a) Relevance;(b) Necessity in assisting the trier of fact;(c) The absence of any exclusionary rule; and(d) A properly qualified expert.”—Supreme Court of Canada, R. v. Mohan, [1994] 2 SCR 9 20122012 ACFE Canadian Fraud Conference1NOTES

EXPERT WITNESS RULES, RULES AND MORE RULESThe Voir DireA proposed expert witness has to first be qualified; aprocess of submitting the expert’s qualifications to thecourt, usually done by having the witness depose that hiscurriculum vitae, then tendered to the court, is truthful in allregards. If the judge accepts the witness as an expert withinthe stated area of qualification, that witness can then giveopinion evidence.The judge is not bound to any expert evidence and oftenhas to weigh and prefer the evidence of one expert againstthat of another.An expert must first produce an expertise report that isintroduced into the court record. Of importance is the rulethat the expert may only testify on what is contained in thereport. Therefore, it is important to consider all possibleissues that might need to be brought forward to the trier offact, and incorporate them into the report.Quebec Rule 402.1Except with leave of the court, no expert witness may beheard unless his written report has been communicated andfiled in the record in accordance with the provisions ofSections I and II of Chapter I.1 of this Title. However, inthe case of a motion other than a motion to instituteproceedings, a copy of the report must be served on theparties at least ten days before the date of the hearing,unless the court decides otherwise.The out-of-court testimony of an expert witness, filed intorecord in whole or as abstracts, may stand in lieu of hiswritten report. 20122012 ACFE Canadian Fraud Conference2NOTES

EXPERT WITNESS RULES, RULES AND MORE RULESBC Rule 11-7Reports must be prepared and served in accordance withrules:(1) Unless the court otherwise orders, opinion evidence ofan expert, other than an expert appointed by the courtunder Rule 11-5, must not be tendered at trial unless(a) That evidence is included in a report of that expertthat has been prepared and served in accordancewith Rule 11-6, and(b) Any supplementary reports required under Rule 115 (11) or 11-6 (5) or (6) have been prepared andserved in accordance with Rule 11-6 (5) to (7).PROFESSIONAL RULES AND CODESCICA Standard Practices for Investigative and ForensicAccounting Engagements (Nov 2006)100.02—These are the minimum standard practices thatshould be met by all chartered accountants conducting IFAengagements (collectively referred to in this document as“IFA practitioners”).100.05—IFA standard practices are different from IFAengagement procedures. Standard practices relate to theIFA practitioner’s professional skills, the performance ofhis or her engagement, and the preparation of his or herreport. IFA procedures are the specific acts or stepsperformed by the practitioner to attain his or her objectivesin the particular engagement.100.08—“Investigative and forensic accountingengagements” are those that:(a) Require the application of professional accountingskills, investigative skills, and an investigative mindset;and 20122012 ACFE Canadian Fraud Conference3NOTES

EXPERT WITNESS RULES, RULES AND MORE RULES(b) Involve disputes or anticipated disputes, or where thereare risks, concerns or allegations of fraud or otherillegal or unethical conduct.100.17—These IFA standard practices should be applied toall IFA engagements, and to work performed by allindividuals on such engagements.100.18—In the context of this document, work means thework of IFA practitioners, including that performed byother individuals, within the domain of the IFAengagement.100.21—IFA practitioners accepting IFA engagements in ajurisdiction other than Canada should have adequateknowledge of, and meet the relevant standards andregulatory and legal requirements applicable to, thatjurisdiction.The primary jurisdiction that Canadian practitioners willencounter is the United States. The U.S. Federal Rules ofCivil Procedure and the Daubert rules are described at theend of the course material. In addition, reference should bemade to AICPA Practice Aid 10–1 “Serving as an ExpertWitness or Consultant.”The remainder of the IFA standards consists of thefollowing sections:200. Engagement Acceptance300. Planning & Scope of Work400. Information Collection & Analysis500. File Documentation600. Reporting700. Expert Testimony 20122012 ACFE Canadian Fraud Conference4NOTES

EXPERT WITNESS RULES, RULES AND MORE RULESThe two most important sections are 400 and 600. Withoutlimiting the importance of the entire standard, some of themost relevant standards are highlighted below.400.04—IFA practitioners should consider the relevanceof all information that arises during the course of an IFAengagement.400.05—IFA practitioners should identify, analyze, assessand compare all relevant information, assess substance overform, and develop and test, as needed, hypotheses for thepurpose of evaluating the issues in the IFA engagement.400.10—IFA practitioners should evaluate thereasonableness and consistency of all estimates andassumptions having regard to the IFA practitioners’competence, expertise and other available relevantinformation.400.12—IFA practitioners should review all informationreceived during an IFA engagement, and consider itsrelevance, reliability, reasonableness, completeness andconsistency with other known engagement information.400.13—IFA practitioners should consider and addressreasonable alternative theories, approaches andmethodologies that may be relevant to their work.600.08—All reports should include the followinginformation:(a) the name(s) and professional designation(s) of the IFApractitioners and/or the firm responsible for the report;(b) who retained the IFA practitioner(s) and to whom thereport is directed;(c) the date of the report; 20122012 ACFE Canadian Fraud Conference5NOTES