How important is expert objectivity when performing a notional business valuation?

By Ian Campbell | Last updated: September 15, 2023

I split business valuation advice and opinions into two distinct types. First, is advice given in circumstances where the expert is acting in an advocate role. The second is in circumstances where the expert is engaged as an objective litigation expert in preparation for mediation, arbitration, or a court hearing.

Examples of where a business valuation expert acts in an advocacy role include assisting in the negotiation of the sale of a business interest where everybody understands each negotiating party is acting out of self-interest or acting as a consulting expert. "Consulting expert" is a term that currently is more commonly recognized in the United States than it is in Canada. To clarify, where a litigator engages two experts, one may be a consulting expert to the litigator and his/her client who works independent of a second expert referred to as a litigation expert. That second expert is engaged to provide an independent, objective opinion and give expert evidence in support of that opinion. The litigation expert may not know that the consulting expert has been engaged, where part of the consulting expert’s role may be to advise the litigator and his client on the litigation expert’s draft expert report.

That said, where a business valuator acts as an expert in litigation, then objectivity has always been important. Expert objectivity also may be important in fact-specific non-litigation engagements including estate planning and generational business transition matters.

With respect to business valuation litigation and testifying experts, there is always the pregnant overhanging question of just how objective any given expert might be in any given case. In Canada’s Province of Ontario, this issue was brought to the forefront in January 2014 when and Ontario court judge in a decision referred to as Moore vs. Getahun turned Ontario litigators upside down by concluding that no longer could an expert of any discipline review his/her final draft opinion report with the litigator who had asked for it. In January 2015, the Ontario Court of Appeal overturned that lower court decision. Notwithstanding that Appeal Court decision, I think going forward it is going to be ever more important that litigation experts who give business valuation advice diligently practice and display objectivity not only in Ontario, in all Canadian courts, and I suspect in the courts of other countries.

I also think this increased emphasis on litigation expert objectivity applies to all expert disciplines, not only business valuation, and that all professionals and their clients need to be increasingly aware of the importance of that objectivity.


Share this

  • Facebook
  • LinkedIn
  • Twitter

Written by Ian Campbell

Ian Campbell

Ian R. Campbell, FCPA, FCA, FCBV is the president of Business Transition Counsel Inc. and the author of 50 Hurdles: Business Transition Simplified.

Ian is one of the most distinguished and recognized business valuators in North America. He has been instrumental in developing the practice of business valuation consulting in Canada through participating in the founding of the Canadian Institute of Chartered Business Valuators, lecturing and writing.

More Q&As from our experts

Term of the Day


Sandbagging is a clause in a purchase and sale agreement that gives the buyer the right to make an indemnity claim after…
Read Full Term

Subscribe To the Divestopedia Newsletter!

Stay on top of new content from Join one of our email newsletters and get the latest insights about selling your business in your inbox every week.

Go back to top