Lawyer Monthly - January 2022 Edition

The precise date of a valuation is always important, as this affects the financial information available to consider. Now it is even more important than ever as the position on a valuation up to February 2020 is quite different to one after that date. The current situation is the most difficult and uncertain that I have ever encountered, with considerable market unrest and volatility and stock market changes with generally reductions in PEs and multiples. Past performance has a lot less relevance, with companies, even in the same sector, being affected differently and future prospects being very uncertain and even a real risk of total loss. A minority of businesses have been doing well in the pandemic, such as Zoom. After a shaky period, there has been considerable M&A activity, but buyers especially cash buyers are very cautious, in a strong position and looking for bargains. There is a greater emphasis on deferred consideration. In this situation a valuer would much prefer to give a range of values, rather than a specific figure, Court permitting, and would expect to give a material uncertainty declaration in their opinion. Emphasis will be on the current trading and financial position of the business in detail and the sector, with a view to using more than one valuation approach and reconciling these into a conclusion. 46 WWW.LAWYER-MONTHLY.COM | JAN 2022 EXPERT WITNESS Meeting time constraints, such as Court deadlines, is often a challenge and is something that I make sure I can meet. What other challenges do you often face as part of your role? As I mentioned above, one of the main challenges I face is cross-examination in Court. The opposing barrister will try to disrupt and discredit you and get you to contradict yourself. They will often use off-key questions to try to unsettle you, such as questioning your qualifications, independence or sources of information. I have on some occasions been in the witness box for a week being questioned by several barristers, and you need to be very careful to remember what you have said in response to previous points as well as remain consistent in your approach. Another challenge involves being asked by solicitors – usually ones