Ask the Expert: Part 2 | Who should value the business?

In the second part of our Ask the Expert: Valuing a business for divorce series, we explore who should value the business, and understanding the importance of expert roles.

Q: Who is typically responsible for valuing a business during divorce proceedings? 

There are three main roles a valuation expert might take on in divorce cases: as a party expert, a single joint expert, or a shadow expert. The right role depends on the complexity of the case and the level of cooperation between the parties. 

Q: What’s the difference between these roles?

• Party Expert: Appointed by one spouse to support their case. This expert is paid by that party and presents a valuation aligned with their interests. 

• Single Joint Expert (SJE): Appointed jointly by both parties (or the court) to provide an independent valuation. The SJE’s duty is to the court, not either party, and fees are usually shared. 

• Shadow Expert: Typically used in high-value or complex cases. This expert works behind the scenes for one party, reviewing the SJE’s report and identifying any issues or biases. It can be a more adversarial role but sometimes necessary.  

Q: Can you give an example of how expert opinions can differ?

Certainly. In one case, a couple disputed the value of a successful restaurant business. One expert valued it at 6x earnings, the other at 9x. The judge ultimately applied a 6.5x multiple, noting that expert opinions often differ significantly.

This case highlights how critical it is to have a practical and fair approach, and how much impact the choice of expert can have on the outcome.

Q: What’s your advice for choosing the right expert?

Choose someone with experience in divorce-related valuations and a clear understanding of the legal context. Whether you’re seeking a neutral valuation or a second opinion, the right expert can make a substantial difference – not just financially, but in helping the process move forward constructively.