BVWire—UK notes an increasing effort by leaders of the UK BV profession to educate the business public on the value of independent business valuations. An example from last week comes from Kroll/Duff & Phelps and Ogier.
Colin Everson, associate managing director at D&P, and David Welford, partner, BVI Dispute Resolution, Ogier, released their thoughtful summary of the UK business valuation profession in Global Banking and Finance Review, directed at the commercial litigators who continue to generate so many valuation engagements. BV analyses combine “scientific methods of financial analysis with deep market knowledge and professional judgement to provide robust measures of value,” Everson and Welford write. “Commercial litigators are likely familiar with the broad concepts involved—but perhaps not with how valuation principles can be deployed in contentious cases.”
They go on to describe the power of business valuation to “assist in the resolution of disputes … so the legal team can get on with the substance of the claim” in actions related to fraud or recovery of debt, disputes following a merger or acquisition, insolvency proceedings, and unfair prejudice petitions pitting minority against majority shareholders.
Independence is mission critical: They also explain how independence (and especially conflicts of interest) are essential. Lawyers frequently neglect or hedge the fact that, as this article explains point blank, “the obligations of a valuation expert are to the court, not to fight the client’s case. At the same time, the expert must be prepared to robustly defend their methods and conclusions against challenge from the other side, in particular when giving live evidence. The credibility of any analysis depends on the expert’s ability to stand behind it without lurching into advocacy of the client’s position.”
Kudos to Welford and Everson for yet another effort to help the business community understand how business valuation in the UK, and globally, has become a separate professional specialisation. Business leaders are not served well by simply “letting the auditors sort it.”
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