Commercial disputes are very common and they will likely become much more prevalent in 2020 as the impact of COVID-19 on various businesses and business arrangements/agreements continues to unfold.
Disputes can arise due to a breach of contract, breach of tender, breach of fiduciary duty, patent infringement, estate dispute, business interruption, product liability, shareholder dispute or any other form of dispute between businesses or shareholders.
Chartered Business Valuators (CBVs) are frequently retained as independent experts in commercial disputes to assist with a business valuation or an economic loss quantification. This assistance can include, among other things, the preparation of an independent expert report or the review of an opposing expert’s report.
Commercial litigation support is an important part of the process. The expert’s duty in a commercial dispute is to assist the court in an independent and objective fashion. According to the Rules of Civil Procedure, an expert’s role is:
- To provide opinion evidence that is fair, objective and non-partisan
- To provide opinion evidence that is related only to matters that are within the expert’s area of expertise.
- To provide such additional assistance as the court may reasonably require to determine a matter in issue.
With many courts recently suspending most operations over the COVID-19 pandemic, it is unclear when pre-existing matters will be able to resume. It is also unclear how many new legal disputes may arise as a result of the COVID-19 pandemic.
Separate from retaining effective legal counsel skilled in the art of negotiation, retaining a CBV to prepare an independent, reasonable and supportable expert report can greatly assist in allowing a timely resolution out of Court. Some form of alternate dispute resolution (i.e. mediation or collaborative negotiation using video and/or teleconferencing technology) may be a viable alternative to the currently suspended and backlogged Court operations.
How can the independent expert CBV help?
An independent expert CBV can assist with the following:
- Financial loss / economic damages quantification
- Business or security valuation
- Expert report preparation
- Expert testimony
- Settlement negotiations
- Document management and production
- Interviewing key witnesses on financial matters
- Conducting company, industry and economic research
- Review and critique of opposing expert reports
According to a survey discussed in CA Magazine, 91% of litigators that had retained CBVs retained them to review opposing expert reports. When served with an expert report, it is beneficial for litigators (and their clients) to have an effective process for reviewing that expert report in an efficient manner. This will help to identify when it is appropriate to involve an expert and enable effective communication with the expert in order to manage costs for the client.
To assist in the process for reviewing an expert report, set out below is a 10-step process for reviewing an expert report which quantifies economic damages in commercial disputes:
| Step | Description |
| 1. | Review the author’s credentials and qualifications. |
| 2. | Identify any scope limitations and qualifications on the conclusions. |
| 3. | Identify and assess the assumptions underlying the conclusions. |
| 4. | Ensure the conclusions represent the expert’s opinion and not simply calculations. |
| 5. | Identify and assess the damages approach adopted by the expert. |
| 6. | Identify and assess the damages period assumed in the report. |
| 7. | Identify future damages and ensure they have been appropriately discounted. |
| 8. | Ensure the contract was considered by the expert. |
| 9. | Ensure that mitigation was considered and addressed by the expert. |
| 10. | Retain a CBV for an independent perspective and to prepare a responding report. |
Retaining an independent business valuation or loss quantification expert as part of your litigation support team can greatly increase the chances of a speedy resolution to your commercial dispute. A reasonable and supportable report prepared by an independent expert CBV can help to move an unreasonable party towards a reasonable settlement.
Call us at VSP for a complimentary consultation regarding your damages claim or regarding an opposing expert’s report containing a business valuation or loss quantification.
CALL US AT 905-305-VSPL (8775) FOR A COMPLIMENTARY CONSULTATION REGARDING YOUR DAMAGES CLAIM OR AN OPPOSING EXPERT’S REPORT.