Joint Appraiser: The Underrated Tool for Resolving Business Disputes
In many legal matters — such as shareholder disputes and divorce cases — business valuation experts play a critical role in determining the value of privately held companies. While some cases evolve into prolonged and costly litigation, there are scenarios where both parties can agree to jointly retain a single business valuation expert. This approach can offer significant advantages to the parties, their counsel, and the court. Below are five key reasons why engaging a joint business appraiser can be beneficial in litigation:
1. Cost Savings
The most obvious advantage of hiring a single expert is cost. Retaining two separate valuation experts typically doubles the fees for professional services. If the case extends over time or proceeds to trial, any necessary updates or revisions to the valuation report will also be less expensive with only one expert involved.
Additionally, attorney fees may be reduced because there is less time spent coordinating, exchanging information, and debating between two opposing experts.
2. Neutrality and Independence
All recognized business valuation credentials (such as ABV, ASA, or CVA) require appraisers to maintain independence and objectivity. When multiple experts are retained, each may act independently — but they often receive different information from the parties. This may happen unintentionally, as business owners sometimes feel threatened or hesitant to share information with an opposing expert.
With a single joint appraiser, both parties provide information to the same neutral professional, eliminating concerns about selective disclosure and reducing client pressure to “get a certain result.”
3. Increased Efficiency
Valuation engagements often depend on the availability of multiple stakeholders — experts, attorneys, clients, and sometimes third parties. When there is only one expert to coordinate with, the engagement timeline can be shortened significantly. Scheduling is simplified, document requests are centralized, and the likelihood of completing the project in a timely and organized manner increases.
4. Better Collaboration and Understanding
In many alternative dispute resolution settings, engaging one financial expert is standard practice. In a joint valuation engagement, the appraiser has the opportunity to explain valuation methods and subjective vs. non-subjective decisions to both parties and their counsel. This transparency fosters understanding, reduces unnecessary disputes, and allows for meaningful discussions around the valuation conclusions.
5. Value Beyond the Final Number
A joint appraiser can often contribute beyond simply delivering a valuation conclusion. They can run “what-if” scenarios, assist in structuring settlements, and help manage both parties’ expectations. This broader involvement can lead to more creative and practical resolutions, particularly in complex shareholder or marital cases.
Conclusion
Litigation is inherently complex and often contentious. Hiring a joint business valuation expert can help simplify the process, reduce costs, and improve the quality of information and decision-making. It is essential, however, to select a qualified and experienced valuation professional who is accustomed to working in joint expert roles and understands the nuances of litigation and dispute resolution.