llan Beatty, AACI, P. App, Fellow achieved his AACI designation in 1988 and was awarded his Fellow in 1998. He served on the Appraisal Institute of Canada’s National Board of Directors from 1990-1998 and was its president from 1996-1997. He has chaired such committees as Insurance, Admissions, Finance, Strategic Planning and Restructuring, and is currently Chair of Appeal. From 1999-2007 he also served on the Standards Board/Committee. Allan is currently affiliated as an independent contractor with Kent Macpherson Appraisals in Kelowna, BC, having relocated in 2006 from Saskatchewan.
1) In your current position, how are you involved in expert witness work?
AB: At Kent Macpherson Appraisals, each of us tends to focus on a few specific areas of expertise. Over time, my expertise has gravitated towards more complex valuation problems. These types of problems warrant the involvement of an appraiser only when two sides cannot agree on the answer to a valuation issue and result in a dispute. The issues and property types are very diverse, and with the expansion of alternative dispute resolution techniques, fewer of these cases are ending up in an actual ‘court’ of law. Many more involve some type of quasi-judicial hearing, and others settle before a hearing is necessary.
2) What types of property or real estate situations/transactions are typically involved in expert witness?
AB: Expert witness work can be everything from a single-family residential property to large, special purpose developments. What drives the need for expert witness involvement is the complexity of the valuation problem. Generally, this is where experience in the profession is an asset. Perhaps more important is the ability to both tackle the challenge of the valuation problem, figure out a solution, and articulate the answer. The reasons that an appraiser might be asked to provide an opinion as an ‘expert’ have also expanded in recent years. Expert witness work really covers any assignment where testimony may be required, including quasi-judicial forums such as assessment appeals, and commercial arbitration.
3) Can you give us examples of expert witness cases on which you have worked?
AB: In the past five years, I have completed appraisals on (potentially) stigmatized residential properties, including a home infested with bats, an undisclosed grow-op, a dwelling with foundation problems, and a property with contaminated ground water. Heavy industrial assignments have included two pulp mills and a meat packing plant. Institutional property types have included work on two military bases and an institutional site with restricted title rights. I have also been involved in fi ve diff erent lease arbitrations, including everything from retail to a golf course site. They have all been interesting, to say the least.
4) What role does an appraiser typically play in a real estate situation where an expert witness is involved?
AB: The appraiser is usually asked to provide his or her opinion on value or rent, then to critique the opinions offered by others – usually another appraiser. Th e type of review of the other expert opinions can be everything from helping counsel to prepare cross-examination to a full, formal review of the opposing opinion. I have increasingly encouraged counsel to allow a technical review of the other opinion(s) so that there is a formal structure to the review.
5) What unique challenges does an appraiser face as an expert witness?
AB: Without reservation, retaining objectivity is the biggest challenge. Th is is clearly the case when it comes to reviewing the opinion of the other experts. Th e reason you end up in a hearing is because the opinions are too diverse to reconcile. While you have already expressed your own opinion, you must also be mindful not to unduly criticize the other opinion, where possible. However, your responsibility is to assist the trier of fact, and your opinion will be more credible if you can demonstrate that it is provided on a professional and unbiased basis.
6) What are the rewards and/or drawbacks to expert witness work?
AB: There are a number of rewards. Th is type of work usually pays more than a typical day-to-day appraisal assignment – I charge $50 to $75 more per hour for expert witness work. Th ere is also a high degree of validation if the body rendering the decision relies upon your work. Th is type of work is often uniquely challenging and will stretch your technical abilities. Th e drawbacks are frequently the other side of the same coin. If you underestimate the difficulty of an assignment and have quoted a fixed fee, the initial report may not be so lucrative (although the appearance at a hearing is usually in addition). Sometimes, the decision goes against your opinion, even though you are convinced you are right. Stretching your technical abilities lays you open to challenges, which sometimes takes the form of challenging your credibility. You should be prepared for that type of challenge, whether or not it is justified.
7) What skill-set does an appraiser require in situations involving expert witness?
AB: While it is nice to have experience in the property type at the centre of the dispute, it is not always possible, considering the unique nature of some valuation problems. Experience in a broad array of property types is important. Previous testimony as an expert is also an asset, but not a prerequisite. I recommend that anyone who is expecting to testify in some forums (e.g., assessment appeal), should keep abreast of recent rulings and developments in the law within the area of expertise or property type involved. This is helpful in both responding to the appraisal problem and in preparing for the questions that might be asked in a hearing.
8) Is there significant demand for appraisal services involving an expert witness?
AB: There seems to have been an increase in the number of cases since the market meltdown in 2008. Th is is true for both the number and diversity of problems that involve the potential for a hearing. I have nine files on the go at the moment, and seven of them have potential to go to some type of hearing.
9) What can appraisers do to promote their business in the area of expert witness?
AB: There is almost no way to explicitly promote yourself as an expert. I get 65% or more of my expert witness work through referrals from colleagues, clients and counsel with whom I have worked. You should include expert witness as a service specialty on your member profile on the ‘Find an Appraiser’ section of the AIC website. Attending conferences, where you can discuss and share experience on difficult assignments, also builds some awareness with your peer group and a support network for really tough problems.
10) What advice would you give an appraiser thinking of getting into expert witness work?
AB: When asked, challenge yourself in areas where you have the competence to provide a sound, professional opinion. Pay attention to leading cases and legal developments in the areas of your practice in which you might be called to give expert evidence. Participate in association events and get the word out on unique and challenging work you have completed. Most importantly, resist the temptation to take sides in a dispute, as some appraisers have come under criticism for advocating for their client rather than presenting an unbiased and balanced opinion. Never lose sight of the fact that your role as an expert is to assist the court, arbitrator or hearing panel in reaching a sound decision, not to infl uence the decision to the favor of one side or the other.
The Canadian Property Valuation Magazine, published by the Appraisal Institute of Canada, features Allan Beatty, AACI, P.APP, FELLOW and Associate at Kent-Macpherson.