Independent Valuation Litigation Support

This week I was asked to value a medical practice, relating to a dispute between shareholders. Before I head off to my secret fishing spot for the weekend, I want to share these thoughts about how independent valuation experts assist in the litigation or dispute resolution process.

Business valuation and transaction professionals are frequently engaged as independent financial experts for purposes of assisting in dispute resolution, litigation, or potential litigation. Litigation support services include any professional assistance provided to a client in a matter involving pending or potential litigation or dispute resolution proceedings before a trier of fact.

In rendering litigation support services, the expert may be retained to provide an expert opinion on the financial effects of facts and assumptions. In addition to forming an expert opinion, the expert may value a business, project future financial results, analyze the performance of a business operation, interpret financial data, opine on an impaired streamof earnings, or render other similar types of professional services.

In providing litigation-support services, an independent financial expert may play a role as:

  1. Expert. One who is qualified by knowledge, skill, experience, training, or education in performing business valuation services and/or related financial analyses.
  2. Expert Witness. An expert who is engaged to explain technical, scientific, or specialized knowledge in order to assist the trier of fact in understanding evidence.
  3. Arbitrator. An expert who serves as a trier of fact in an alternative dispute resolution context.
  4. Court-Appointed Expert. An expert who is engaged by a court to assist the trier of fact.
  5. Consulting or Advisory Expert. An expert who is engaged to review another expert’s work product or who is engaged to advise the client, lawyer or another expert witness about technical matters relating to the subject litigation, but who will not be called to testify at trial, and may or may not be independent. Accordingly, this Procedural Guideline may not apply to such an expert.

Source: ASA Business Valuation Standards, ©2009 American Society of Appraisers