Rebuttal analysis applied to commercial contract dispute litigation: methodology, deliverables, and case-specific considerations.
A lost profits report is tested on causation, incremental cost treatment, the period of loss, and the discount rate. The economist checks whether the but-for revenue rests on pre-dispute projections and the company's history or on assumptions made for the claim, whether the costs deducted are the incremental costs of earning that revenue or a fraction of fixed costs, whether the loss period is bounded by the contract and the market, whether mitigation was credited, and whether the discount rate reflects the risk of the earnings stream. Each correction is quantified so counsel can see which assumptions carry the number.
Critique of an opposing economic damages, valuation, or forensic accounting report for plaintiff or defense counsel. The review tests the assumptions, data sources, discount rates, worklife and life expectancy inputs, growth rates, mitigation treatment, and arithmetic behind the opposing number, identifies the errors that matter, and quantifies how the conclusion changes when they are corrected. The result supports cross-examination, a rebuttal report, or a motion directed at the reliability of the opinion.
The claim typically consists of lost profits on the contract itself, measured as the revenue that would have been earned less the costs that would have been incurred to earn it; lost profits on related business that depended on the contract, where the record supports the connection; reliance costs incurred in preparation for performance; and in some matters the diminished value of the business when the breach reduced its ongoing earnings capacity. The drivers are the contract and its performance history, historical financial statements and tax returns, budgets and projections prepared before the dispute, customer and pricing records, and the cost structure that determines what portion of lost revenue would have been profit.
We issue a rebuttal report where one is disclosed and provide deposition and trial testimony, cross-examination outlines, and support for motions directed at the opinion.
Whether each cost was classified from the general ledger and the company's actual cost behavior or assumed, and whether fixed costs were deducted or left out to inflate the margin. The review reclassifies contested costs and shows the effect on the lost margin.
By comparing the period claimed with the contract's remaining term, the time the business would reasonably need to replace the volume, and the market conditions during the period. The review shows the loss under the period the record supports.
Request a consultation on Rebuttal or call (201) 343-0700. Plaintiff and defense counsel.