In many divorce cases, the finances can be sorted out by discussions between the people involved and their lawyers, without the need to instruct a third party to give an expert opinion. However, fairly frequently there are financial disputes that need a definitive answer on asset values, or advice on financial structures or options for the family after separation. This blog looks at the roles of experts within financial remedy cases.
Expert advice can be something as straightforward as valuing a house or other asset, so that a capital figure can be put on it. At the other end of the scale is detailed forensic analysis of complex business structures, pension funds or trusts to see how income streams, shares or capital might be extracted and divided to fund a settlement. It is also possible to use medical professionals to provide expert opinion on, for example, how a medical condition might affect a person’s ability to work, or on essential care and the cost thereof.
Experts can be used in a more informal capacity, such as using an estate agent to put a value on a house. During negotiations or alternative forms of dispute resolution, the parties can agree to use an expert to provide valuations or advice. This can be done very informally by simple verbal agreement, or by letter and a more formal process, depending on the circumstances.
The situation gets a little more complex when litigation is involved. Within the litigation context it is possible to divide experts into three categories: sole (or party) experts, single joint experts and shadow experts.
The first point to make is that permission of the court is required to use and rely on expert evidence within financial remedy proceedings. That applies whether the evidence is written or whether an expert will be called to give oral evidence at a hearing. Permission will only be given where the evidence is “necessary” to resolve the proceedings. In fact, until recently, the test was whether the evidence was “reasonably required”. The new test is aimed at tightening up the use of experts in divorce and dissolution cases in the interests of efficiency and economy.
Recently the Court of Appeal upheld a decision not to allow an expert to be instructed to value the husband’s management entities in what has been dubbed “England’s wealthiest divorce case”. This was because the evidence was speculative, and therefore not necessary to resolve the proceedings, and also the wife had not asked for it earlier in proceedings.
A sole, or party, expert is instructed by one spouse or civil partner only (who is also likely to bear the costs in full) and their role will be to provide information to enable the lawyers to advise the party as to a particular issue. The advice of such an expert, whilst not actually partisan, may well have a bias towards the position of the party instructing them. For example an accountancy expert instructed by a business owner may emphasise the difficulty of extracting money from the business to fund a settlement, whereas his or her opposite number instructed for the non-business owning spouse may emphasise the ease with which money could be extracted.
Even though instructed by one party, as the evidence is court-sanctioned, the expert has a duty to help the court, and not to mislead it. That duty overrides the duty to the party instructing and paying them.
A joint expert is one instructed by both parties, and the letter which instructs them must be agreed by both parties, and if necessary approved by the court. A single joint expert is impartial, and that is the most important aspect of their role. Courts are generally in favour of joint experts, rather than party experts, as they can help narrow the areas in dispute, rather than expanding them, as can sometimes happen when each party has their own expert. In any event, even where the parties want to submit evidence from separate experts, the court may direct that the evidence be given by a single joint expert.
A shadow expert is one who advises one or other spouse in the background as part of that person’s legal team, and is not approved or endorsed by the court; the court may not even know. The use of shadow experts will increase the costs of the person instructing them, but where one side has real concerns about, for example, the complexity of the financial situation and the use of a single joint expert, having a friendly expert on hand to offer guidance can be useful. She or he can review the joint expert’s report, and identify where questions should be asked or more evidence sought.
Your solicitor will speak to you about the need for evidence and the use of experts in your case at an early stage. If an expert is needed to shed light on a particular issue, it is important to identify the right person for the job, and where relevant to approach the other party’s solicitor to try to agree how best to proceed as soon as is practicable.
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