Court-appointed expert

What it means

A court-appointed expert is a specialist listed in the register of experts kept by the Ministry of Justice. They prepare expert reports in a particular field, such as business valuation, property, machinery or vehicles, or reports on accounting, construction or IT.

An expert report has a special status. The law requires it directly in many situations, and in court it serves as evidence. The expert acts impartially using professional methods and bears disciplinary and criminal liability for a false report.

An expert may be an individual, an expert organisation or an expert institute. Before commissioning a report, a company can check the register to see whether the expert is listed in the required field, because a report outside the scope of their authorisation may not carry the necessary weight.

How it works in practice

In business a report is required mainly for a non-cash contribution to a company, where the expert determines the value of the item, receivable or part of the business being contributed. It is also used in a sale of a business, in company transformations and when minority shareholders are forced out through a squeeze-out.

A report is also useful where the law does not require it, for instance when assets are sold between related parties. It helps show that the price matches market value, which can be important in a tax audit or if the transaction is later challenged.

In litigation, for example over damages or defective work, the court may appoint an expert or a party may submit its own report. When filing a lawsuit, it is therefore wise to consider in advance whether expert evidence will be needed and what it will cost.

What to watch out for

The value set by an expert depends on the method, assumptions and information provided. Incomplete or overly optimistic input leads to a report that a court or the tax authority may question. The company should give the expert truthful and complete information.

An expert report dates quickly. If a long time passes between the valuation and the transaction, the value may have changed, and some rules require the report to be no older than a set period. The timing of the report should therefore be aligned with the transaction schedule.