Instructing a Valuation Expert: Lessons from Recent Case Law

Inspired Education v Crombie [2025]

In Inspired Education Online Ltd v Crombie [2025] EWHC 1236 (Ch), the High Court rejected the claimant's business valuation expert evidence in an unfair prejudice petition. The judge identified three fatal flaws: instructions not consistent with commonly used definitions of market value; a lack of rigour in approach to evidence; and a somewhat partial approach to the valuation.

Instruction Consistency

Your letter of instruction must use standard valuation definitions. Specify the basis of value (market value, fair value, open market value per RICS Red Book) and the valuation date. Do not instruct the expert to reach a particular value or to adopt assumptions favourable to your client's case without justification.

Independence Requirements

Under CPR Part 35 and the Ikarian Reefer principles, the expert's duty is to the court. The expert must provide independent opinion regardless of the instructing party's position. Instructing solicitors should not seek to influence the expert's conclusions and should ensure the expert has access to all relevant documents, including those unfavourable to the instructing party's case.

Market Value Definitions

Market value, fair value, fair market value, and open market value have distinct meanings in different legal contexts. Your instructions must specify which standard applies and the expert must apply that standard consistently throughout the report. Confusion between standards was a key failing in the Inspired Education case.

Documents to Provide

Provide the expert with: court orders and directions; pleadings; all relevant financial statements and accounts; property information (for business valuations including property); comparable transaction data; prior valuations; and any expert reports from the opposing party. Incomplete instructions lead to incomplete reports.

Avoiding Partial Approach Errors

The expert must address evidence that contradicts their conclusion. A report that ignores unfavourable comparables, dismisses alternative methodologies without analysis, or adopts only the assumptions most favourable to the instructing party risks being rejected by the court as partial.