Before a court can determine a financial remedies claim following divorce it will obviously need to know the value of the various assets of the family, in particular the former matrimonial home. After all, how can a court decide upon a fair division of the assets without knowing what they are worth? The issue of asset values also goes to the question of the parties’ needs – for example, if a party needs £x to rehouse themselves, then the court must know what proportion of the assets will provide them with that amount.
Thankfully (and you will see in a moment why I use that word) the value of the assets is usually agreed between the parties. This can happen either because the parties agree a figure directly between themselves, usually after taking expert advice, or because they agree to jointly instruct one expert valuer, and then be bound by that valuation.
However, sometimes the parties cannot agree a valuation, and it is therefore up to the court to decide upon a figure. Now, obviously a court will not normally give much weight to any figure that a party comes up with on their own (even if that party is an expert on the subject, there is still the issue of possible bias), so each party will normally be required to provide the court with their own independent expert valuation. If the two experts agree then that will usually be the end of the matter, but if there is a disparity between their valuations then the court will have to make a decision.
This is just what happened in the Northern Ireland High Court case D v D. Here, the husband argued that the former matrimonial home was worth £250,000 and the wife maintained that it was worth £325,000. The case went before Master Bell, who heard from the expert valuer of each party. I’m not going to go through what each valuer said, but suffice to say that despite slightly preferring one expert Master Bell pretty well split the difference between the two valuations, and assessed the value of the property at £290,000.
So, how much did this whole exercise cost the parties? The experts would have charged a fee for attending court (in addition to their original fee for providing a valuation) and both parties were represented, apparently by counsel. The total costs would have been in the hundreds, if not thousands, of pounds.
Now, I know that there may sometimes be a good reason not to split the difference, for example if one valuer is not to be trusted for some reason, such as lack of qualifications or bias (for further details of such matters, see paragraphs 23 to 27 of the judgment). However, the simple fact of the matter is that in the vast majority of cases the court will simply split the difference between the two valuations. If one thinks about it, the reason for this is simple: judges are not valuation experts. If, as will more often than not be the case, there is nothing to choose between the expertise and impartiality of the two experts, then the obvious thing for a non-expert to do is split the difference.
Accordingly, if you find yourself in this situation, you must ask yourself: is there really any reason here why the court will not just split the difference between my valuation and the other party’s valuation? You could just save yourself a considerable amount of money.
To take a step back, parties who can’t agree a valuation need to consider why they can’t agree. There are, of course, cases where each party genuinely believes that their valuation is the correct one. However, there is usually a correlation between the party’s belief and whether it is in their interests that the valuation be high or low, as the case may be. There are also many cases where the parties argue over valuations simply because they argue over everything. If you proceed without a good reason for not agreeing a valuation, then you could be costing yourself a lot of money.
In short, agree valuations if you can, and if you can’t then why not split the difference? It’s almost certainly what the court will do anyway.
The full report of D v D can be found here.