FTI Consulting's experts have experience of explaining economics, finance, accountancy and valuation concepts to lawyers. We leverage that experience to provide free training seminars and workshops for the legal community on these topics and on working with expert witnesses.
Examples are shown below. We are also happy to develop bespoke training around a particular topic on request. Our seminars usually run for 60 to 90 minutes.
Financial and Damages Topics
Introduction to damages
What is the framework for calculating losses? How does the date of
assessment affect loss calculations? What is discounted cash flow
analysis? This presentation explains the foundations of damages
calculations, considering these questions and others, with the
objective of giving lawyers the tools to address the quantification
of damages effectively.
Accounting for lawyers
We explain some of the basic accounting concepts that can underpin
damages calculations. We also describe different accounting
documents, which can help lawyers prepare disclosure requests,
understand what financial documents may be relevant and consider
the evidential weight that can be placed on different types of
documents.
The role of the expert in damages
analysis
We explain the role of independent experts in damages analysis and
the most efficient ways of working with experts. We consider when
to instruct an expert, how to work with an expert and the
attributes of a good expert. We also describe some red flags to
watch for in expert reports. We illustrate a number of the points
with "war stories" which help bring this to life.
Damages workshop
This is a hands-on seminar involving small groups of participants
working through a damages calculation. It helps lawyers understand
the choices that damages experts need to make, and the evidence
that is useful in making those choices.
Advocacy Training
We work with law firms to develop practical workshops on the cross-examination of experts. This involves a mock arbitration with FTI Consulting experts being cross-examined by participants on a case study. Sessions can be run over a lunchtime, or more frequently are extended over half a day, or across a series of two hour sessions.
More Focused Financial and Damages Topics
Valuation in the context of disputes
Of interest to practitioners who work with cases involving
questions of value, we explain key valuation concepts, common
valuation methods (including discounted cash flow and relative
valuation) and the approaches of arbitral tribunals and courts to
assessing value.
Valuation discounts and premiums
Various premiums and discounts applied in valuations can be the
subject of material disagreements, in particular those related to
the effects of control, liquidity and marketability. This
presentation explores some of these issues and explains how valuers
identify and apply appropriate premiums and discounts.
Discount rates
Discount rates are an important component of the discounted cash
flow approach to valuation. This presentation explores the key
parameters in the discount rate including beta, the "country
risk premium", and the "size premium".
Valuing early stage companies
Valuing a company with no track record can be challenging given the
need to assess its potential future performance and related risks.
This presentation considers techniques for examining that
uncertainty and producing a reliable valuation.
M&A disputes
We cover different types of M&A-related disputes such as:
completion accounts disputes, breaches of reps & warranties,
pre-contractual (disclosure) duties, fraud, earn-outs, MACs, and
others. We also discuss statistics from our proprietary M&A
disputes database to identify the factors that give rise to the
dispute: common types of warranty breaches , alternative types of
completion mechanisms, as well as red flags for fraud. M&A
disputes also give rise to specific damages valuation problems,
often different from those in other types of disputes (as the
parties have usually already valued the target business –
absent a breach – and agreed a price). We also cover lessons
learned from our work on M&A disputes, ie how a dispute could
have been avoided. This aspect may also be of interest to M&A
lawyers.
Interest and damages
The amount of pre-award interest can be a significant component of
a damages award. This presentation considers different rates of
interest and the basis for those rates. We consider other issues
relating to interest such as compounding, when interest should run
from, and the relationship between the currency of loss and
interest.
The use of hindsight in damages
calculations
The date at which damages are assessed can have a significant
effect on the loss quantified. In this presentation we consider the
differences between assessments at the date of harm and at the date
of hearing, and the consequences for the use of hindsight. We
explain some of the practical challenges in applying different
dates, and identify some common mistakes made when experts assess
losses at either date.
Damages and taxation
The treatment of tax on losses and on awards, and the treatment of
currency, can have a major effect on the value of awards, and yet
may not receive much attention. This session identifies and
explains the main considerations.
Calculating cartel damages
This seminar examines approaches to damages in cases where
infringement of competition law has been alleged or established. We
review economic theory and methods for assessing price overcharges,
pass-on and output effects. The session can be run with or without
a case study.
Intellectual Property
Valuation of IP
Intellectual property rights, including patents, brands and
copyright are often significant sources of value. In this
presentation we introduce the methods used to value intellectual
property rights for disputes, commercial transactions, taxation and
financial reporting.
Determination of royalty rates
There are two methods commonly used to determine royalty rates; the
comparables approach and the economic benefits approach. The
comparables method relies on similar licences or transactions. The
economic benefits method assesses the incremental value from the
licensee's use of the IP and divides it between the licensee
and the licensor. This presentation explains how to determine a
royalty using both methods and considers the issues that commonly
arise with each one.
Assessing royalties subject to FRAND
obligations
Standard essential patents (SEPs) are licensed on Fair, Reasonable
and Non-Discriminatory (FRAND) terms. FRAND royalties should both
fairly remunerate inventors and ensure all implementers have access
to the technology. This presentation covers the methods used to
assess FRAND royalties, including the 'top down'
apportionment of the aggregate royalty burden, the 'bottom
up' evaluation of incremental contribution and the comparables
approach. We highlight the issues to consider when valuing SEPS
versus non-SEPs and the challenges of valuing a portfolio of
SEPs.
Financial remedies for infringement of IP
rights
Remedies for infringement of IP rights under English law may be
assessed on the basis of lost profits or based on a reasonable
royalty or, as an account of profits. In this presentation we
consider each step of a lost profits calculation. We consider the
range of methods available to estimate lost sales. We explain the
key issues to consider when estimating incremental costs. We
discuss the primary approaches available for assessing a reasonable
royalty including the comparables approach and the economic
benefits approach.
IP as security
IP assets are often companies' most valuable assets. They may
be available to act as collateral for debt finance. In this
presentation, we explain the key issues affecting suitability. We
consider the characteristics of IP assets that are likely to be
appropriate assets to act as security and the issues relevant to
valuation of the assets and structuring of the associated debt
finance.
Statistics and Econometrics
Context
There is rapid growth in the use of techniques from statistics and
econometrics in expert evidence, driven by: (1) organisations
accumulating ever larger, more expansive and more complex datasets;
and (2) the expectation of courts, tribunals (and often the parties
themselves) that this data is put to use in an effective, thorough
and proportionate way.
This series of seminars will provide an intuitive understanding of how the most commonly used techniques work, and the circumstances in which they can be deployed – not only for assessing damages, but also factual causation and liability.
Format
The seminars will be heavy on intuition, light on equations and
theory, and instead provide real-life examples and case studies to
explain the concepts and their applications.
Content
Connecting cause and effect
How are analytical techniques from economics and statistics used to
assess factual causation?
A crash course in regression
Ordinary Least Squares (OLS) regression is the most widely-used
empirical technique for assessing causation: but how does it
actually work?
Testing, testing, testing
How is data used to quantify the range of uncertainty around a
number, and to test hypotheses?
Sample design in disputes
How can statistical samples be used in assessing liability and
damages in disputes, and what are the important considerations in
designing and analysing these samples?
A simple analysis of share prices
How can movements in share prices be used to assess damages, and
how can such evidence work alongside other approaches to assessing
damages?
Industry Sessions
Our team includes a number of experts who have previously worked as equity analysts, in-house or for regulators, focusing on a particular sector. These presentations draw upon that expertise to provide insight into industries that are often the focus of disputes.
Oil & Gas
Upstream oil and gas
Over the last few years there have been several high-profile
disputes involving upstream oil and gas companies, including the
$50bn arbitration award to Yukos shareholders. In this presentation
we describe the key features of the industry, including business
models and cost structures. We explain how such businesses are
valued and the factors influencing value.
Natural gas pricing disputes
The liberalisation of European gas markets, and the development of
gas trading "hubs", has led to an ongoing shift in the
way in which gas is priced in European markets, with the process
often requiring dispute resolution. This seminar describes the
European gas markets and explains the economic issues that commonly
arise in gas pricing disputes.
Clean Energy
Industry overview
The Clean Energy sector has grown rapidly and encompasses a number
of different renewable technologies including solar, wind and
biomass. In this presentation we present an overview of the key
renewable technologies, relevant and changing regulation in the
sector and an overview of the value chain and key players in the
Clean Energy sector.
Economics of the sector
Returns and margins in the sector have been evolving as business
models have changed in this rapidly changing and dynamic sector. We
present key ranges for returns, an understanding of the
'levelised cost of energy' concept, margins across the
value chain as well as some key parameters for valuing companies in
the Clean Energy sector.
Clean Energy disputes
As the Clean Energy sector has matured and with significant capital
now deployed in the sector, disputes are more commonplace. Disputes
include those resulting from unexpected/retroactive regulatory
changes, investment treaty related actions, warranty disputes,
construction disputes, pricing/ supply disputes, IP disputes, and
shareholder disputes/underperformance of assets.
Technology
The technology industry is subject to rapid change. New business models emerge quickly. Valuations are often volatile and established businesses can be affected by competition from new entrants. In this presentation, we explain the value chain of the technology industry, current trends, and the key valuation issues when considering businesses in the technology sector.
Leisure and Hotels
The leisure sector is diverse and comprises hotel owners and operators, gambling companies (retail and online), pub and restaurant owners and operators, tour operators, cruise lines and catering companies. In this presentation we consider the economic models underlying each of these sub-sectors, their growth drivers and risks, and how investors take these into account when valuing companies in the sector. We comment on current trends and illustrate the presentation by reference to recent disputes. The presentation can be tailored such that it deals with the entire leisure sector or particular sub-sectors.
Consumer Goods
The consumer goods industry comprises a number of subsectors, including food and beverage and home and personal care. The industry has gone undergone consolidation in recent years as companies have sought to expand market share and secure access to growth markets. In this training session we explain how brand strength, market presence, exposure to raw materials costs, and relationships with retailers impact value.
Telecoms
In recent years there have been a number of disputes relating to the telecoms sector, particularly in emerging economies. In this presentation we describe key features of the industry, including regulation, business models and cost structures. We explain how businesses are valued and factors influencing value. We also identify some common mistakes in DCF models of mobile telecoms businesses.
We have specialists in a number of other industries including aviation, healthcare, infrastructure and mining. Please let us know if you would like to arrange training on a particular topic.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.