BayesiaLab
Reasonable Certainty Why Courts Should Use Bayesian Belief Networks to Estimate Economic Damages

Reasonable Certainty — Why Courts Should Use Bayesian Belief Networks to Estimate Economic Damages

Presented at the 7th Annual BayesiaLab Conference at the North Carolina Biotechnology Center.

Abstract

In 2010, Robert M. Lloyd wrote, “In an ideal world, a court would be able to hear the evidence, estimate the plaintiff’s damages, and quantify its own confidence that the estimate was accurate.” This presentation argues that Bayesian networks can move the legal world very close to Lloyd’s ideal. Using an actual court case, this presentation demonstrates how expert witnesses can use Bayesian belief networks (BBNs) to estimate economic damages with "reasonable certainty" as required by case law, challenges the mythology that point estimates offer higher certainty than value ranges, and illustrates how courts, arbitrators, and negotiators can use BBNs to "quantify their own confidence" in damages estimates.

Presentation Video

About the Presenter

Kurt S. Schulzke, JD, CPA, CFE
Associate Professor of Accounting & Law
University of North Georgia
Email: kurt.schulzke@ung.edu

Kurt Schulzke, JD, CPA, CFE, teaches forensic accounting and audit analytics at the University of North Georgia. He has published on revenue recognition, materiality, expert witnessing, economic damages, and business valuation through a Bayesian networks lens in a variety of outlets, including the Columbia Journal of Transnational Law, Vanderbilt Journal of Transnational Law, Journal of Forensic Accounting Research, Tennessee Journal of Business Law, and The Value Examiner. With an M.S. in Applied Statistics from Kennesaw State University, he is equally adept as counsel, expert witness, or neutral in valuation-related matters.

Kurt S. Schulzke, JD, CPA, CFE


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