Stout served as statistical and damages rebuttal expert in an international arbitration involving a warranty cost recovery dispute between automotive suppliers. The engagement focused on evaluating whether a claimed defect rate and related repair cost damages were supported by reliable statistical sampling, representative data, and appropriate extrapolation methods.

The analysis involved reviewing the opposing expert’s methodology for estimating an attributable defect rate across a large population of automotive component warranty claims based on a limited sample of inspected parts. We assessed whether the sample was representative of the broader claims population, whether the sampling methodology appropriately accounted for uncertainty and potential bias, and whether the extrapolation of sample results to the full population was statistically supportable. The work also evaluated whether binary fault assignments, failure-mode inconsistencies, sample-size limitations, and unmodeled causal factors affected the reliability of the claimed defect rate and damages estimate.

We further analyzed the reasonableness of repair cost assumptions used to quantify the claimed warranty recovery, including whether the costs assigned to estimated failures were sufficiently certain and supported by the underlying claims data. The engagement included expert reporting and testimony regarding the statistical reliability of the opposing expert’s analysis, the limitations of the sample-based extrapolation, and the appropriateness of the resulting damages calculation.