Instructing a business valuation expert: a guide for lawyers.

Instructing a business valuation expert means engaging an independent valuer — as a single expert or adversarial expert giving evidence, or a shadow expert advising behind the scenes — in family law, commercial or estate proceedings. The letter of instruction fixes the questions, valuation date and basis of value. Prismi prepares senior-reviewer-signed reports compliant with the applicable expert witness code of conduct, on fixed, never-contingent fees.

When a legal matter needs a valuation expert

Business valuations enter legal practice through four main doors. Family law property settlements, where a private company, trust or partnership interest sits in the asset pool and the parties cannot agree what it is worth. Shareholder and partnership disputes — oppression proceedings, buy-outs under a shareholders' agreement, partnership dissolutions — where an exit price must be determined. Estate matters, including family provision claims and executor sales, where a business interest must be valued at the date of death or another fixed date. And commercial litigation more broadly, where loss and damage turns on what an enterprise or a shareholding was worth before and after an event. In each context the basis of value matters: most engagements proceed on market value — the willing-but-not-anxious construct from Spencer v Commonwealth (1907), carried through IVS 104 — but shareholders' agreements sometimes prescribe fair value without minority discounts, and the letter of instruction needs to say which applies. Prismi provides the valuation evidence only; the legal strategy, and the application of that evidence to the proceedings, remain with the instructing lawyer.

Single expert or adversarial experts: who appoints whom

In family law financial proceedings, the starting position under Chapter 7 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 is a single expert witness — one valuer jointly appointed by the parties (or appointed by the court), instructed by an agreed letter, and answerable to the court rather than to either side. A party who wants to rely on their own adversarial expert on the same issue generally needs the court's permission, which is not given lightly. In commercial and estate litigation the position is closer to the reverse: party-appointed experts are the norm, and the court manages the contest through expert conclaves, joint reports and concurrent evidence. The practical consequences differ. A single expert appointment puts the weight on the letter of instruction and on each party's right to put written questions to the expert about the report. An adversarial appointment puts the weight on the rigour of the report itself, because it will be tested against an opposing expert under cross-examination. Prismi accepts both forms of appointment on identical terms: fixed fee, evidence-led, no alignment with the instructing party's preferred outcome.

The code of conduct and what compliance actually requires

Every Australian court that receives expert evidence imposes a code of conduct — Chapter 7 of the FCFCOA Rules in family law, the Harmonised Expert Witness Code of Conduct in the Federal Court, and equivalent schedules in the state Supreme Courts. The common core: the expert's paramount duty is to the court, not to the party paying; the report must state the expert's qualifications, the questions asked, the facts and assumptions relied upon, the materials considered, and the reasoning that connects the evidence to the conclusion; and the expert must acknowledge the code in the report itself. A valuation that states a number without exposing the reasoning is vulnerable regardless of who signed it. Compliance also has a fee dimension: an expert whose fee is contingent on the outcome is compromised from the outset. Prismi's fees are fixed at engagement and never contingent on the conclusion or the litigation result, every report carries an independence statement and senior-reviewer sign-off, and the working file — every input, every source — is retained for ten years and available if the report is tested.

What to put in the letter of instruction

The letter of instruction frames everything the expert does. It is usually annexed to the report and is discoverable, so it should be neutral, complete and precise. A model letter covers:

• ·The parties, the entity or interest to be valued (including the exact class of shares or units), and the percentage interest
• ·The valuation date or dates — and whether a retrospective date is required
• ·The basis of value: market value, or a contractually defined basis such as fair value under a shareholders' agreement
• ·The specific questions the expert is asked to answer, framed neutrally
• ·The purpose and the proceedings, including the court and any orders governing the appointment
• ·The documents provided, listed in a schedule, and the process for requesting further documents
• ·Any assumptions the expert is instructed to adopt, clearly labelled as instructed assumptions
• ·The applicable expert witness code of conduct, attached or referenced
• ·Timetable: draft report date, final report date, and any conclave or hearing dates already fixed
• ·Fee arrangements, confirming fees are fixed and not contingent on outcome

Shadow experts, critique reports and challenging the other side's valuation

Not every engagement produces a report for the court. A shadow expert works behind the scenes for one party — reviewing the single expert's draft, framing written questions, preparing cross-examination themes and testing settlement positions — without ever filing evidence. A critique report goes one step further: a written review of the opposing expert's report that examines methodology selection, the treatment of maintainable earnings and add-backs, the multiple or discount rate adopted, the use or absence of minority and marketability discounts, the arithmetic, and whether the reasoning actually supports the conclusion. Challenges rarely succeed on the ground that the number feels wrong; they succeed where the methodology is inappropriate for the entity, an input is unsupported by evidence, an instructed assumption was misapplied, or the reasoning from evidence to conclusion is missing. The most productive use of a shadow engagement is early — before the single expert's report is finalised, while written questions can still shift the analysis — rather than after the report has hardened into evidence.

Realistic timelines against court deadlines

Valuation timetables fail for predictable reasons: documents arrive late, the entity's records need reconstruction, or the appointment is made weeks before a compliance date that was set months earlier. Working backwards from a filing deadline, allow for document collection (one to four weeks depending on how well the entity is run), the engagement's stated turnaround, and a margin for the expert to answer written questions. Prismi's turnarounds run from the date the document completeness check is passed, not from the date of the phone call — 15–25 business days for a Comprehensive engagement and 25–35 business days for a Defensible Valuation File. Rush delivery is available at +30% of the base fee, subject to capacity, but rushed valuation evidence is a false economy in litigation: the working file is what survives cross-examination, and it takes time to build. The honest advice is to instruct the expert when directions are made, not when the deadline appears on the horizon.

Which engagement fits litigation work

For matters headed to court, the Essential report (from $1,495 + GST, 10–14 business days) is generally not the right instrument — it is designed for straightforward commercial purposes, not for evidence that will be tested. Most single-expert and adversarial appointments are served by the Comprehensive engagement (from $3,995 + GST, 15–25 business days), which tests multiple methodologies and documents the reasoning for selecting and rejecting each. Where the matter is high-value, hotly contested, or likely to involve cross-examination and expert conclaves, the Defensible Valuation File (from $8,995 + GST, 25–35 business days) builds the complete evidentiary file — every input sourced, every rejected methodology reasoned. Retrospective valuation dates, common in family law and estate matters, attract a surcharge of $495 per historical date; additional entities in a group are $750 each. For settlement strategy, the Valuation Range & Scenario Review maps how the supportable range moves under different assumptions — often what a negotiation actually needs. Every report is signed off by a senior reviewer, which is the standard litigation demands.