At Rodgers Reidy, we often provide shadow valuation services to support legal proceedings and dispute resolution or test the robustness of existing expert reports. In doing so, we frequently uncover recurring issues and biases that can undermine the credibility and accuracy of valuation conclusions, particularly in the SME (small to medium enterprise) sector.

A common issue is the lack of peer review, resulting in simple errors or unjustified assumptions slipping through. Without a second set of eyes, valuation reports may contain fundamental flaws that significantly affect outcomes.

We also encounter questionable valuation methodologies. These include unjustified weighting of historical earnings, inappropriate data exclusions, or reliance on broad rules of thumb without proper rationale. This can lead to outcomes skewed in favour of a particular party—especially problematic in contentious matters such as family law disputes.

Another critical issue is inadequate use of market data. Robust valuation requires comprehensive analysis of relevant market transactions and guideline company data—an area where many reports fall short.

Finally, we sometimes find that the valuation purpose is misunderstood, such as confusing the valuation of a trading entity with a holding company.

These pitfalls highlight the importance of engaging a valuation expert with a clear, independent process and access to high-quality data. At Rodgers Reidy, our team ensures that every valuation is objective, defensible, and aligned with the intended purpose—because getting it right the first time matters.

For more information, please see the full article by Martin Speiwak on LinkedIn.