Commercial Disputes: Challenging Expert Reports

Commercial Disputes: Challenging Expert Reports

In what circumstances can a party to a commercial contract challenge an expert’s report?  The expert commercial lawyers at Bahamas firm ParrisWhittaker have years of experience advising and representing commercial clients on their contracts.

 

 

The UK’s Court of Appeal has handed down an important ruling in a case in which it examined the relevant principles that apply when a party challenges an expert’s report(1). 

What’s the background?

In this case, a valuation of an employee’s shareholding provided by expert valuers was valued at £4.2m.  The claimant company had terminated the shareholder’s employment contract following accusations of misconduct, but agreed to buy out his shareholding.  The company contested the valuation, claiming (among other things) that the valuation was flawed, it contained errors and could not be relied on, it was carried out on an erroneous basis, and the valuer had not complied with required procedure.

The shareholder successfully applied for summary judgment on grounds that the claim had no real prospect of success.  The burden was on the claimants to demonstrate that the expert valuers had materially departed from their instruction. 

What was the decision?

The Court of Appeal upheld the ruling and ruled:

  • the terms of the letter of engagement had been complied with
  • on a true construction of the valuation report, it was clear the experts had applied the instruction in the correct way
  • it was not arguable that the valuers had departed from their mandate

The ruling makes clear that such cases will be considered on their facts to determine the extent of the instructions given to the expert in question.  Where there is a challenge to an expert valuation, the principles applicable are to be based on the construction of the contract document by which the expert has been appointed (in this case, the letter of engagement).

What does this mean?

Whilst expert reports are invaluable in resolving commercial disputes, great care must be taken when experts are formally instructed.  The letter of engagement, or other form of instructions, must be clear and unambiguous – making clear the extent of what is required of the expert.

How can we help?

For expert, strategic legal advice when instructing experts in the court of commercial disputes, contact the Bahamas lawyers at ParrisWhittaker now for incisive assistance on how best to instruct your expert and formalizing contractual arrangements that adequately protect your commercial interests.


(1)Premier Telecom Communications Group Limited (2) Darren Michael Ridge v Darren John Webb [2014] EWCA Civ 994