August EWJ 24 - Flipbook - Page 68
decommissioning costs of £120 million, equating to a
value of negative £5 million.
Due to potential legal obligations, regardless of the
method of valuation, the entity is going to be required
to carry out the decommissioning now estimated at a
cost of £120 million. Therefore, the highest and best
use is likely to be to continue to operate the assets to
minimise the total losses.
In a simple calculation, the damages here would be
£55 million, therefore, more than the initial purchase
price and it is possible that a scenario exists where you
get back more than you paid.
Final thoughts
In considering the title of the article, it might seem
unusual to get back more than you paid in a transaction dispute. In comparison to a normal commercial
transaction, why should a dispute mechanism allow
you to retain an asset or business and receive more
than you initially paid for such asset or business.
Whilst not common there are scenarios where the
information provided induces a buyer to pay a positive
sum for an asset or business that is a liability, being that
the best course of action is that the buyer will need
to inject more than the purchase price to close or
maintain that asset or business.
When considering the correct approach to damages,
careful consideration will need to be given to the right
valuation approach and depending on the legal and
factual background, one that provides the highest and
best use. There may also be factual evidence to consider, particularly as transactions at a negative value
are rare and therefore the buyers might have made a
different decision had they had full and complete
information.
Mr Carl G Woodroffe
Chartered Insurance Practitioner and Insurance
and Risk Management Consultant
How Crowe can help
The Crowe Forensic Team work on a significant
number of forensic cases, of varying sizes; we are always happy to have an initial no obligation discussion
on any matters where we can add value and advice.
For more information, please contact Alex Houston.
alex.houston@crowe.co.uk
BA (Hons), FCII, MCI Arb., QDR (Expert Determiner), CUEW, MAE,
Chartered Insurance Practitioner
Carl is a Chartered Insurance Practitioner, Fellow of the Chartered Insurance Institute,
Member of the Chartered Institute of Arbitrators, a Cardiff University Accredited Expert
Witness, a full Member of the Academy of Experts and a Qualified Dispute Resolver.
He holds a First Class Classification Honours Degree in Insurance Management (highest
mark in year).
Carl’s insurance broking experience spans over 45 years and has included senior positions
with national and provincial brokers (please refer to his CV). As Technical Director of
the MCIS insurance broking group, Carl was responsible for all such matters, including
broking, education and training and was its FSA (now FCA) regulatory compliance
officer. He has written articles for “Your Witness” and “Insurance Age”. He is also a
Senior Consultant to Flaxman Partners Limited, service providers to BIBA (as claims
advocates dealing with difficult and/or complex claims).
Have an expert opinion or
article you wish to publish,
want to contribute?
Expert Adviser and Expert Witness:
As an expert adviser, Academy of Experts and Cardiff University accredited expert
witness, Carl is instructed by solicitors, and provides advice and as necessary, procedurally
compliant reports on insurance disputes. In the recent past his work has included a
number of high profile alleged insurance broker/intermediary breach of duty/negligence
claims, involving issues of failure to properly assess client demands and needs,
incorrect/inadequate advice, non-disclosure, inadequate cover/explanation of policy
warranties, conditions or exclusions and inadequate business interruption cover. Many
CPR compliant reports have been prepared and advice given to solicitors since 2002.
Please send it to our editor.
CPD points are valid on all
published articles.
Expert Determiner:
As an Academy of Experts Qualified Dispute Resolver (Expert Determiner), Carl is also
able to assist parties that are in dispute and are agreeable to Expert Determination of
their dispute. Expert Determination enables the parties to a dispute to obtain a resolution
without recourse to law that is quick, inexpensive, private and binding.
Please send your paper
or article to
admin@expertwitness.co.uk
EXPERT WITNESS JOURNAL
Contact
Tel: 0121 353 4012 - Mobile: 07904 995 677
Email: carl.woodroffe@tcep.co.uk - Fax: 0121 353 4012
The Central Expert Partnership, 259 Little Aston Road, Walsall, WS9 0PB
66
AUGUST 2024
