In recent years it has become more common for divorcing spouses to agree to jointly engage one expert to value the marital interest in a business or professional practice.  While choosing one expert is not suitable for all situations, the potential benefits of using one expert include saving time in the process, reducing the cost of the valuation and increasing the possibility of negotiating a resolution based on the opinion of value rendered by the expert.  Conversely, the greatest risk is that in this process the "in spouse," meaning the spouse working in the business or professional practice, who will be providing most of the information to the expert may tend to attempt to skew the results in his or her favor which typically means providing information that would support a lower value.

There are certain things that can be done to protect the interest of the "out spouse" in such a situation and increase the likelihood of this process producing a value that becomes the basis for a negotiated resolution.

First, an appropriate expert must be selected.  (See my article on Business Valuation in Divorce; Selection of Choosing a Valuation Expert).  In these situations, the expert that is chosen should be someone that your lawyer has worked with on a number prior occasions before where the expert was engaged jointly by the divorcing spouses.  Not all business valuation experts have experience serving in this role and in our practice we would suggest choosing one who did not have significant experience as a jointly engaged expert.

Next, it is important to establish procedures that create transparency in the process.  For example, no "ex-parte" communications should be allowed.  Neither lawyer should be permitted to communicate privately with the expert; all communications should be in a form of conference calls and any written communications should be contemporaneously shared with counsel for the other party.  Further, any information provided to the expert by either side must be contemporaneously provided to the opposing party and his or her counsel including any documents and financial records.

With respect to interviews that the expert will conduct, either both spouses should be present in person for all such interviews or the interviews can be recorded so that both spouses are completely aware of the information that each has provided to the expert and have the opportunity to rebut it.  All questions that the expert requests to be answered by either spouse should be put to both spouses in writing, simultaneously.

It is also very important to specify the expert's tasks at the commencement of the engagement.  Neither spouse should be put in the position of defining, limiting or controlling the scope of the expert's inquiry without the knowledge and consent of the other spouse.

As part of the process and in the engagement letter to be executed with expert, the expert should be required to provide a draft report to both sides and a comment period should be established so that each party has the opportunity to rebut information or conclusions contained in the draft report before a final opinion is rendered.

Finally, in these situations it is important to plan for an adverse result.  This can be done by establishing a deadline for the jointly engaged expert to provide his or her conclusion of value well in advance of any trial or hearing date.  Both sides should be given the opportunity to hire his or her own expert and the time necessary for that expert to not only review the work of the jointly engaged expert but to prepare his or her own report well in advance of the trial.

With the proper expert and by putting a proper system and procedure in place, the jointly engaged expert can help the parties reduce the time that it takes to value the community interest in a business or professional practice, save a significant amount of money and produce an opinion of value that can be the basis for a negotiated resolution.