The Federation Press

Experts’ Reports in Corporate Transactions


Experts’ reports have become a key factor in providing shareholders and others with independent, objective information about many modern corporate transactions.
Sometimes required by law, sometimes voluntary, their rising importance in major transactions has brought increased scrutiny. Is the report sustainable? Is it contestable?

This book discusses the critical issues, analysing them with reference to the Corporations Act, ASIC policy, case law and industry codes.

The authors are led by Professor Ian Ramsay, member of the Takeovers Panel and author of the recent report to the federal government on auditors’ independence, and Jon Webster, a member of the ASX’s Listings Advisory Panel and a former Chairman of the Law Council’s Corporations Committee.


This book goes a long way to filling the void between past experience and current best practice. ... The team of authors provides the reader with a broad grasp of the salient aspects of the expert’s definitions and tasks, as well as the downside of liability and the defences provided at law and in contract. ... What constitutes a good expert report, be it fair and reasonable, fair value or some other such concept (and, for whom) is given ample scope in the text. ...
It is hard to ignore that the largest chapter in the book (and probably rightly so in these litigious times) is the one on ‘liability of experts’. It is, of course, immediately followed logically by a forthright and concise chapter on defences and limitations of liability, though as a practitioner one comes away asking the question: is it worth it? Auditors would likely nod in shared experience and agreement.
The book is not afraid to explore issues for which practice often only provides inconclusive counsel. The ambiguities of many corporate situations aside, the book does a good job of highlighting the grey areas that demand all the more acute attention in the practising real world.
The book’s concluding chapter on independence is an excursion into the nuances (such as the Valmin code) and the legal implications of various remuneration and contractual retention strategies for experts. As such the book is worth its weight for the first time report writer and an eyeopener for even the more weathered of us authors.
The book is a valuable addition to the library of the specialist practitioner report writer, to those who seek to engage them and to the legal professional who may be called upon to defend a client or test a report. It is very much a text that regulators should take serious note of in their framing of policy, around the practise-related difficulties of report writing. - Peter Pontikis, Journal of the Securities Industry of Australia, Issue 2, Winter 2005

The book is intended for those who prepare experts’ reports as well as others involved in corporate transactions where such reports are used. This will include company directors, and the reliance by directors on experts’ reports in the context of directors’ duties is specifically considered.
As well as extensive legal analysis, the book includes a consideration of practical examples of experts’ reports that have not been the subject of litigation. ASIC Policy and Practice Notes as well as the requirements of ASX Listing Rules and the Corporations Act are considered. For lawyers, the work carries the authority of Professor Ian Ramsay as one of its authors and it will be highly useful to practitioners in the area.
A chapter on the contentious issue of the independence of experts’ reviews the decision in Pilmer v Duke Group (in Liq) ... The book leaves open the question of how far fiduciary standards can be applied to experts’ reports generally. However, it questions the effectiveness of commercial solutions such as ‘Chinese Walls’ ...
The book deals with the liability of experts, including indemnities and limitation of liability. It considers criminal as well as civil liability and remedies available to ASIC. ... - Law Institute Journal (Victoria), April 2004

This interesting new book, explores a number of aspects of [expert’s] reports, including the question of who qualifies as an expert (and, through considering a number of cases) who does not qualify, the proper role of such reports, the tests to be used by the expert, the potential legal liability of the expert, both in relation to the company on whose behalf the report is prepared, and a prospective shareholder, the relationship between such reports and the extent to which directors may rely on them and issues pertaining to the degree of independence of such experts....
One writer has suggested that the standard of care of an expert to members of the public is as onerous as the auditor’s report in an annual report. This issue is considered in Chapter 5 under the heading “Liability of Experts”, which concludes with the salutary warning of the “potentially large and growing exposure of experts to actions, liabilities and penalties, particularly under, but by no means limited to, the Corporations Act.”
That warning, alone, should provide sufficient incentive for anyone who practices in this area of the law, to take a long hard look at this book as it provides a simple to read, detailed, user friendly warning whereby such experts and, for that matter, those who engage them or those who provide advice to them, might be forewarned and therefore, forearmed. This is a very useful addition to the Federation Press stable. - Tasmanian Law Society Newsletter, November 2003

Table of Contents

The Purposes and Uses of an Expert’s Report
Who is an Expert?
’Fair and Reasonable’, ’Fair Value’ and Other Tests Applied by Experts
The Contents of an Expert’s Report
Liability of Experts
Defences and Limitation of Liability

Table of Cases
Table of Statutes

Of interest...