Last week we looked at the case of SK v TK. In that article we explored whether the wealth generating partner could justify a claim for more than half of the assets.
Another point arises from that case. Is the instruction of a single joint expert to value an asset, such as a company, helpful or even realistic?
The instruction of a single joint expert (also referred to as SJEs) is often required by Part 25.11 of the Family Procedure Rules and encouraged,explained and clarified in Practice Direction 25D. The thinking behind these rules are that the courts would control the expensive and voluminous evidence placed before it by couples going through divorce. If the courts forced the parties to work together with a single expert then the issues in dispute would surely be reduced. The alternative would be two competing expert opinions where each partner had instructed their own.
Unfortunately that is not how it turns out in many situations.
Consider this excerpt from SK v TK [2013]
66. I now turn to the most difficult issue in the case. At the First Directions Appointment, a standard order was made by Robinson DJ that the parties “do jointly instruct Lesley Howe of Mall & Co to report on the value of the Respondent’s holding in Limelight Ltd.”
67. Lesley Howe reported on 28th September 2012. She valued the company at almost exactly £10 million. Working on the erroneous calculation as to the Husband’s shareholding allowing for Mr Jennings’ interest, she put the value of the Husband’s interest, net of CGT at just over £5 million.
68. The Husband was not happy with her report. He asked detailed questions to her more than once. He then sought permission to rely on his own expert forensic accountant, Sally Longworth of Grant Thornton. Almost inevitably, the Wife then sought permission for her own expert, Peter Smith of Quantis.
69. Ironically, this meant that an attempt to reduce the accountancy evidence to one expert rather than two has led to there being three experts. This is not the first time this has happened before me. As far as I can see, it has become almost the norm in contested litigation in the Family Division where there is an issue as to the value of a privately owned business.
The goal in reducing the evidence placed before the courts is not met and, in fact, the direct opposite is achieved. Instead of there being less reports filed there are now more than ever.
This judgment might be helpful for clients who often approach a single joint expert with a degree of scepticism.
Clients often want to have their own appointed expert arguing for them and in their favour. While this is perfectly understandable, any expert, whether jointly or individually instructed is not meant to be perceived as a partisan hired gun.
Part 25.3 of the Family Proceedings Rules makes it clear instead that the expert’s overriding role is to assist the court as opposed to the person who commissioned them and will, of course, be paying their fees.
(1) It is the duty of experts to help the court on matters within their expertise.
(2) This duty overrides any obligation to the person from whom experts have received instructions or by whom they are paid.
Rule 25.11 states
- Where two or more parties wish to put expert evidence before the court on a particular issue, the court may direct that the evidence on that issue is to be given by a single joint expert.
The power is therefore elective – an option available to the court rather than something that they must do. Be aware that there is still strong emphasis on judges to exercise that discretion. It just might be, however, that the judicial comment within this case might help individuals and their representatives to encourage a judge to allow two independent expert reports instead of three.
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