quantifying damages in commercial disputes€¦ · and private equity fund disputes ampnmpbrc...
TRANSCRIPT
QUANTIFYING DAMAGES IN COMMERCIAL DISPUTES
������������������
�������
���������������������������������
������������
�������������������������������������
���������
������������������������������������������������������������������
corporatedisputesCD�������������������
www.corporatedisputesmagazine.com
������������
REPRINTED FROM:CORPORATE DISPUTES MAGAZINE
JUL-SEP 2017 ISSUE
www.corporatedisputesmagazine.com
Visit the website to requesta free copy of the full e-magazine
Published by Financier Worldwide [email protected]
© 2017 Financier Worldwide Ltd. All rights reserved.
CORPORATE DISPUTES Jul-Sep 20172 www.corporatedisputesmagazine.com
MINI-ROUNDTABLE
MINI-ROUNDTABLE
QUANTIFYING DAMAGES IN COMMERCIAL DISPUTES
www.corporatedisputesmagazine.com CORPORATE DISPUTES Jul-Sep 2017 3
PANEL EXPERTS
MINI-ROUNDTABLE
Rich Bergin
Managing Director
AlixPartners
T: +1 (617) 824 9771
Rich Bergin is an expert in global financial economics, specialising in securities fraud, antitrust violations, international arbitration and commercial disputes. He has more than 20 years of experience in assisting clients with economic, financial, and valuation analyses in investigations and disputes. He has testified as an expert witness in trials, including federal and state courts, in arbitrations, and before government agencies, and regularly serves as a litigation consultant.
Andrew Grantham
Managing Director
AlixPartners UK LLP
T: +44 (0)20 7098 7474
Andrew Grantham is an experienced financial and accounting expert with over 25 years’ experience in financial investigations and as an accounting and damages expert witness. His experience covers many aspects of accounting, valuation and financial matters, including breach of contract and loss of profits claims, minority shareholder and joint venture disputes and claims arising following acquisitions and sales of businesses. He has given evidence in the High Court, Crown Court and in international arbitrations on over 30 occasions.
Timothy Gray is a forensic analyst who helps his clients respond to a range of legal and regulatory challenges with confidence and at speed. He specialises in the determination of defensible facts and insights from large, disparate, complex, structured and unstructured datasets. He has worked with disputes across a range of industries including financial services, travel and carbon trading.
Derek Holt is an economist with over 20 years of experience in the fields of competition, regulation and litigation. He has acted as an expert in matters before the European Commission, the Competition Appeals Tribunal, the CMA and sectoral regulators. He recently appeared for Visa in the High Court in a standalone competition matter, and is acting for Peugeot in a follow-on claim before the CAT.
Timothy Gray
Director, Litigation Data Analytics
AlixPartners UK LLP
T: +44 (0)7500 014 031
Derek Holt
Director
AlixPartners UK LLP
T: +44 (0)20 7098 7475
QUANTIFYING DAMAGES IN COMMERCIAL DISPUTES
CORPORATE DISPUTES Jul-Sep 20174 www.corporatedisputesmagazine.com
MINI-ROUNDTABLEQUANTIFYING DAMAGES IN COMMERCIAL DISPUTES
CD: How important is it for a company considering filing a commercial dispute to assess the potential damages thoroughly?
Grantham: Assessing potential damages is
incredibly important. Our 2016 Litigation Survey
suggests that one in 10 companies have been
involved in a ‘bet-the-company’ lawsuit, which is a
surprisingly large number. Admittedly, these are the
top end of the cases in terms of magnitude, but if
a company is considering investing time and cost
in bringing a claim of any significant size it needs
to know what the likely ‘return’ on that investment
would be, and the possible risks associated with it. At
an early stage, a high-level view from an experienced
expert will be valuable in helping a company with
the decision of whether to bring the claim. In
addition, this early assessment will assist when it
comes to thinking about if and how to consider the
involvement of litigation support funders. They will
undoubtedly carry out their own assessment and it
will assist the company considerably to have its own
independent assessment.
Bergin: Assessing damages is quite critical as it
can help the filing party assess the viability of taking
legal action. We have occasionally seen situations
where a party, after filing its claim, decided to drop
one or more claims after reviewing the quantum
of damages prepared. Having arrived at such an
understanding before the claim was filed would
have saved the party considerable costs and the
potentially embarrassing climb-down. In addition,
understanding where the losses arise – the heads
of claim – helps focus minds on the evidence that
may be required and how complex the case may
become. That may also elicit other remedies which
may be relevant, injunctions, for example, or where
mitigating action should or is being taken.
Holt: There are some specific factors when it
comes to competition claims that are worth thinking
about. Our 2016 Litigation Survey indicates that
over 50 percent of all cases are class actions. In
standalone cases, the judge or tribunal assesses
whether a party infringed competition law. The
potential damages in such cases can depend on
a lot of factors and it is important to think through
how the alleged distortion to competition caused
loss. For example, this may be as a result of raising
input costs, foreclosing access to supplies or
restricting access to customers. Second, if liability
has been established, the focus will be on the
damages caused by the anti-competitive activity.
The level of damages can vary widely, depending
on how widespread the practice was, its duration
and any mitigation. For example, in most cartel
damages matters, we engage early on to discuss
what evidence there may be regarding whether the
company passed on an overcharge to its customers.
www.corporatedisputesmagazine.com CORPORATE DISPUTES Jul-Sep 2017 5
MINI-ROUNDTABLE
Evidence of this could significantly reduce the value
of a prospective claim.
Gray: From a forensic IT perspective, a thorough
damages assessment will include an assessment
of structured data, semi-structured data and
unstructured data. Increasingly we see
the use of data in its broadest sense being
employed in cases to great effect, while
simultaneously observing that parties are
often less familiar with employing the
use of data, particularly structured data.
A thorough damages assessment helps
to identify all the possible opportunities
available to the case, thereby
strengthening the case. A thorough
damages assessment will include an
assessment of the data requirements.
This assessment will describe whether
the data can be sensibly obtained, where the data
can be obtained from and any likely obstacles and
challenges. As such, a thorough assessment will
determine case feasibility, costs and timelines, and
will place the party in the strongest possible decision
making position.
CD: Given the time and cost associated with a commercial dispute, is it preferable to enlist the aid of experts before making a final decision on how to proceed?
Grantham: We all recognise that this can be
a finely balanced decision: should you incur the
cost of an expert before bringing the case? If the
company has gone past the stage of considering the
‘go or no go’ decision, then there are issues of cost
proportionality to consider. However, our experience
has been that costs do not necessarily increase
because an expert has been brought onto a case
earlier. Clearly, the financial expert can assist with
the quantum aspects: helping identify heads of loss,
quantifying loss, commenting on the strengths and
weaknesses, and flagging where the case is well
supported or where further evidence is needed.
However, an expert accountant brings more to the
table than just numbers. An experienced expert
may have seen or worked on similar cases, and will
be able to discuss the various aspects that need
to be considered, including the nature and content
Timothy Gray,AlixPartners UK LLP
“A thorough damages assessment helps to identify all the possible opportunities available to the case, thereby strengthening the case.”
QUANTIFYING DAMAGES IN COMMERCIAL DISPUTES
CORPORATE DISPUTES Jul-Sep 20176 www.corporatedisputesmagazine.com
MINI-ROUNDTABLE
of information that should be provided by way of
evidence. It is always worth an initial conversation
with an expert, regardless, to see what insights he or
she can bring.
Bergin: Obtaining early-assessment expert help
can be valuable. An effective litigation strategy
should ideally focus on pillars that are likely
to be supported by expert opinion and
yield favourable outcomes. An expert can
identify documents that are likely to support
such favourable opinions, if they are readily
present at such an early stage, and also
have a critical impact on discovery and
information requests on a go-forward basis.
Holt: It is helpful to enlist the support
of experts before making a final decision
on how to proceed. The expert can assist
in identifying the prospect of success for
a standalone competition claim, as well as provide
an indication of the potential scale of damages.
In a competition dispute context, in addition to
developing an initial understanding of the likely
range for any damages, the expert could also identify
the sort of factual evidence that would be required
to support the ‘theory of harm’ and quantification.
This can help the company consider what evidence
is already available and what would need to be
requested from the other side to demonstrate that
the alleged activity breached competition law.
Gray: A recent dispute comes to mind. Rather
than rely on forensic IT experts, the party decided
to use in-house technical resources. With the best
intentions, the analytical resources employed
various forensic tools and techniques to gather
evidence for the case. Unwittingly, by running
queries on the target datasets, the party’s systems
started to wipe data stored in its temporary memory
– previously deleted data – and risked undermining
the case. A forensic IT expert will often seek access
to ‘deleted data’ that is hidden from standard users,
and will often see this data as crucial to the case.
Crucially, the use of structured datasets is a relatively
new avenue for disputes. Engaging data dispute
professionals to highlight all possible avenues before
making a decision to proceed can help parties make
a better decision. Data, systems and databases can
be very complex, especially in a dispute context.
Rich Bergin,AlixPartners
“An effective litigation strategy should ideally focus on pillars that are likely to be supported by expert opinion and yield favourable outcomes.”
QUANTIFYING DAMAGES IN COMMERCIAL DISPUTES
www.corporatedisputesmagazine.com CORPORATE DISPUTES Jul-Sep 2017 7
MINI-ROUNDTABLE
Rigorous data preservation, collection and control
processes, accompanied by auditable, transparent
analysis are essential. There may be costs to not
involving experts both in terms omitting valuable
avenues and in terms of undermining the quality of
the analytics completed.
CD: Many damage assessments include considering losses which will arise in the future. How do you go about quantifying something that has not yet happened?
Grantham: This is where it becomes particuarly
important for the expert to gain a strong
understanding of the business. When asked to
consider losses in the future, we want to understand
what it is the business does, how it operates
and what its plans are. We all understand and
acknowledge the old adage, especially when it
comes to share price, that past performance is not
necessarily an indicator of what might happen in the
future. However, when it comes to assessing future
damages, understanding how good a company
has been in the past at forecasting results, and
being able to demonstrate this track record, will
add a significant amount of certainty to what many
will describe as a speculative process. In addition,
though, what is forecast to happen in the future
needs to make sense compared to what happened
in the past. The future needs to fit contextually
– is growth realistic? Does it fit in the market? Is
the business positioned to do what is forecast? In
many cases, a ‘discounted cash flow’ forecast is
prepared, which considers both the value of the
future cash flows and when the cash flows are
likely to arise. These future cash flows are then
discounted back to a present value using a discount
rate to reflect the risks, uncertainty, and the time
value of money. Alternatively, some of these risks
or uncertainties can also be incorporated into the
cash flows themselves. However, this can be a time
consuming exercise and might not be warranted
when considering cost proportionality. Also, some
might argue that this exercise still demands a high
level of subjectivity which, as a result, does not
add any greater level of assurance to the damages
assessment.
Bergin: Econometric modelling plays a major
role in calculating future damages in many cases.
Economic damages are computed by comparing
outcomes in the real world with outcomes in
the ‘but-for’ world. In both the real and ‘but-for’
world, an econometric model may be employed to
generate reasonable forecasts of future outcomes.
Holt: Anti-competitive behaviour, such as
predatory pricing by a dominant firm, may take
place over a particular period. However, the effects
of these actions could persist, potentially into
the future. A good example of the need for this
type of analysis relates to the effect of cartels.
QUANTIFYING DAMAGES IN COMMERCIAL DISPUTES
CORPORATE DISPUTES Jul-Sep 20178 www.corporatedisputesmagazine.com
Just because a cartel is found to have
stopped on a certain date does not
mean that prices immediately return
to a competitive level. To assess
whether this is the case, an expert
may use benchmarking analysis,
for example, comparing prices in
similar markets or geographies.
To value these effects, it will be
important to discount the series
www.corporatedisputesmagazine.com CORPORATE DISPUTES Jul-Sep 2017 9
MINI-ROUNDTABLE
of cash flows back to their present value.
Gray: From a forensic
IT perspective,
the approach to
quantifying the value
of future events
depends on the
damages model
undertaken,
though there are
common themes.
One area that
has seen growth
is in the use of
artificial intelligence
or machine learning
models to predict
the characteristics of
future events. These
models will analyse
historical data to identify
the sometimes nuanced and
complex relationships between
cause and effect, as distinct
from simple correlations. A key
approach to proving the validity of
these models is to apply the model
to a historical dataset previously
unseen by the learning model and
thereby evidencing the accuracy of the
predictions. Utilising these cutting-edge models is
not always appropriate. What they achieve in terms
of accuracy they may lose in terms of obfuscation.
A clearly defined, transparent, easy to understand
damages model is a noble aim. Key themes to
building credibility in a future based damages model
from a data perspective include involving a data
expert along with the traditional economists and
quantum experts – they will likely be able to find
ways to strengthen the model, for example, replace
assumptions with facts. Other themes include:
searching for models that have been successfully
used in at least five other cases; testing assumptions
against recognised benchmarks, historical data,
industry research, recognised market data and
expert opinion; and, where appropriate, employing
the use of regressing testing.
CD: What steps need to be taken to collect and analyse data relevant to the case, for the purposes of evaluating damages?
Grantham: If you already have an expert on
board, ask them what they will need as soon as
you can. There may be confidentiality issues or
commercial considerations to work through in
collating disclosure, and dealing with those early
will be helpful in the long term. Data can come
from all sorts of places both within the company
and externally, and experts will help you navigate
www.corporatedisputesmagazine.com
QUANTIFYING DAMAGES IN COMMERCIAL DISPUTES
CORPORATE DISPUTES Jul-Sep 201710 www.corporatedisputesmagazine.com
MINI-ROUNDTABLE
in finding what is relevant and useful. For many
companies, there can be a real challenge of having
too much data to deal with. Every case is different,
and data requirements may evolve over time or
only become clear as the issues crystallise. Judges
or tribunals sometimes express concerns as to the
proportionality of a damages exercise in the cold
light of judgment or award, and in those
cases guidance from the judge or tribunal
around what should or should not have
been done would be useful for future
cases.
Bergin: In a typical dispute involving
financial economics, there are four main
steps. First, identify what data is needed
in an ideal world. Second, work with the
company to determine how much of this
data is available, and talk with owners of
this data to get an understanding of its adequacy.
One is then able to analyse the data and collate
preliminary findings, identifying gaps that require
additional data. Third, research the public domain for
similar data and investigate whether the publically
available data broadly agrees with the preliminary
findings based on the company data. One can then
assess whether the public information can close the
gaps in company data. Finally, work collaboratively
with parties to prepare discovery requests to close
any remaining gaps.
Holt: During the initial phases of collating and
analysing data, close interaction between the expert
and the company is required to ensure the data is
understood in its proper context. Various processes
should be carried out to ensure the data is as robust
as possible: data will often need to be ‘cleaned’,
by identifying and addressing gaps and anomalies.
Initially, obtaining sufficient data may be seen as a
challenge, particularly if the alleged activity and its
effects go back many years. However, asking parties
the right questions often leads to additional data
being identified, which they may not have initially
appreciated was relevant. A useful starting point with
the data is to simply graph the trends and to observe
any apparent relationships – even simple graphs
may highlight important relationships. However, it is
important to develop robust models, properly ‘road-
tested’ in a litigation context.
Derek Holt,AlixPartners UK LLP
“During the initial phases of collating and analysing data, close interaction between the expert and the company is required to ensure the data is understood in its proper context.”
QUANTIFYING DAMAGES IN COMMERCIAL DISPUTES
www.corporatedisputesmagazine.com CORPORATE DISPUTES Jul-Sep 2017 11
MINI-ROUNDTABLE
Gray: Data collection and analysis in a disputes
context presents many unique challenges, each
of which must be carefully managed in order to
support the case. Some of the most important
steps include the identification of relevant data.
Over 2.5 quintillion bytes of data have been created
in the past two years alone. Any one organisation
will have vast data stores. Answering seemingly
basic questions, such as ‘what data is needed and
why?’ and ‘in what technologies does the data
reside and in what format?’ is essential to avoiding
information overload. Custody, privacy and control
issue resolution must be addressed. Relevant
data may span multiple jurisdictions and third
parties. Data may involve proprietary architecture
and code. Sensitive information, including trade
secrets, employee records and financial records,
may be required. Chains of custody will need to be
established. A ‘single version of the truth’ is a further
important step. Building an independent disputes
data model that acts as a reliable, single version of
truth for the case is critical. To achieve the single
version of the truth, the model must be auditable,
transparent and tightly controlled. All assumptions
must be clearly stated. Data lineage must be
established from a single aggregated number
back to the lowest level system transactions.
Data preservation systems are both complex and
fragile. It is easy to lose information vital to the
case and undermine data integrity unless the
correct preservation protocols are adopted. Data
visualisation is a further issue. Given that a case
may involve many millions of records and highly
complex algorithms, it is essential that the data be
aggregated and communicated in a way that is easy
to comprehend.
CD: In your experience, how important are the factual witnesses and evidence when quantifying damages?
Holt: Losses must be measured by reference to
a hypothetical counterfactual, which means that
there may not always be a set of facts that a factual
witness can speak to. Instead, the expert needs to
use empirical techniques and an analysis of the
incentives of the parties to infer what may have
happened. However, the experts’ analysis should
not be a purely theoretical exercise removed from
the way in which the business actually operates.
It is, therefore, essential that the factual witnesses
clearly describe the business’ operations, including
how it engages with its suppliers and customers,
and what mitigating steps it took against the adverse
parties’ action. This may be especially important
when addressing the question of pass-on of cartel
damages, which by its nature involves a detailed
analysis of the pricing strategy and practice of the
claimant. The link of the economic evidence to the
factual evidence has been particularly important in
the context of a recent case on Visa’s interchange
fees before the High Court. For example, when
QUANTIFYING DAMAGES IN COMMERCIAL DISPUTES
CORPORATE DISPUTES Jul-Sep 201712 www.corporatedisputesmagazine.com
MINI-ROUNDTABLE
considering what might happen without interchange
fees, one question was whether the banks would
then negotiate bilateral interchange fees. As an
expert considering this from the perspective of
the incentives of each party to engage in bilateral
negotiations, it is important to take account of the
factual witness evidence as to how prevalent such
arrangements are and how practical it would be to
establish such arrangements.
Bergin: Damages analyses can often be
theoretical exercises relying on empirical techniques
and models. We occasionally run into damages
models supported by seemingly rational economic
assumptions, but which are easily refuted by the
industry-specific conditions and factors existing at
the time the damages calculation is attempting to
model. Collaboration with factual witnesses can help
avoid this trap and should serve as a reality check on
similar models and analyses.
Grantham: A damages expert will recognise
that no matter how qualified he or she may be, or
how much experience he or she has, they do not
know a company or its business as well as those
who run the company themselves. In addition, an
expert was not there at the time the circumstances
giving rise to a claim occurred, and rarely would
an expert have direct experience in working in
the specific industry on the same issues. Those
running the company were and do. One skill of the
expert lies in taking what the factual witnesses and
evidence tell them, testing it, checking consistency
and fitting it into the overall assessment of damages
that is made, balancing against assumptions and
modelling. Having factual statements to point and
refer to is very helpful to the expert in rationalising
his modelling, assumptions and assessment of
damages.
Gray: The value of factual witnesses from a
forensic IT perspective, largely depends on the type
of commercial dispute in question. If the dispute is
based upon the analysis of historical transactions,
then the factual witness becomes important. In
contrast, a dispute centred on economic theory will
likely have less demand, from a data perspective.
Factual witnesses can help accelerate the creation
of the case data model – the single version of the
truth – by explaining the interplay between business
operations as a collection of people and processes
with the systems and data. The factual witnesses
will be able to describe the ‘data journey’, which
describes the journey from data creation, including
data touch points, through to data usages. Forensic
IT experts will often need to cleanse and manipulate
a great deal of complex, company specific data
– factual witnesses can support with the translation
of the systems language to that of the case. By
contrast, in some instances, experts are required
to analyse systems that contain essential data,
but for which there is no supporting information;
QUANTIFYING DAMAGES IN COMMERCIAL DISPUTES
www.corporatedisputesmagazine.com CORPORATE DISPUTES Jul-Sep 2017 13
MINI-ROUNDTABLE
essentially they are presented with a ‘black box’.
These opportunities present interesting challenges
for experts to overcome.
CD: The temptation is to pair the expert accountant with the company’s financial director since they talk the same language – but in your experience, is that the right thing to do?
Grantham: The financial director clearly
has a stake in any dispute, be it as part of
the decision to bring a claim and investing
in the case, or by being on the receiving
end of a claim and deciding whether to
fight and risk losing, or as part of the decision to
settle. The financial director can often act as the
single point of contact within a company, to help
coordinate efforts, identify and make connections
with the right people, manage the information flow
and retain control over costs. However, the financial
director is often several steps removed from the
circumstances giving rise to the claim. He or she is
typically not the one at the coal face. Much of the
most useful witness evidence comes from those in
operational, sales or purchasing roles, depending on
the issues in dispute. While the financial director will
have a sense of the issues, in so far as people report
to them, it is the staff who directly deal with the
issues who have the direct experience and can talk
credibly to them.
Bergin: This is typically not a good idea. The role
of the CFO generally has broadened over the past
decade. Beyond the core responsibilities of financial
reporting, audit and compliance, planning, treasury
and capital structure, many CFOs are playing a
stronger role in corporate portfolio management and
capital allocation. Others have become prominent
as the voice of the company in investor relations
and in communications to the board, as leaders
in performance management and as exporters of
finance-experienced personnel to the rest of the
organisation.
Holt: While the financial director can assist in
explaining the financial position of the company,
Andrew Grantham,AlixPartners UK LLP
“Much of the most useful witness evidence comes from those in operational, sales or purchasing roles, depending on the issues in dispute.”
QUANTIFYING DAMAGES IN COMMERCIAL DISPUTES
CORPORATE DISPUTES Jul-Sep 201714 www.corporatedisputesmagazine.com
MINI-ROUNDTABLE
many competition matters relate to the relationship
between a company and its suppliers and
customers, rather than the financial markets. This
is particularly the case in cartel damages cases.
In these cases, it will be important to understand
the data held by the procurement function of the
prospective claimant. This might include purchase
contracts, databases containing the value of
purchased inputs and associated information for
orders from suppliers, such as prices, units, delivery
costs and location, as well as any significant changes
in the nature of the supplied products over time.
In other cases, including allegations of abuse of
dominance, it may be critical to understand from
the sales director how pricing strategy is developed,
for example, how rivals’ pricing benchmarks are
identified and how firms in the sector use discounts
to win business.
Gray: A useful addition to the typical roles
involved in commercial disputes is the IT director.
Where analysis of structured data is concerned, the
IT director becomes an essential resource to confirm
the systems and data landscape. The IT director
can typically provide the technology infrastructure
details, systems libraries, data dictionaries, backup
plans and essentially the contact details of the
relevant IT resources that can assist with the
extraction of data. The IT director will describe how
the systems have been managed and will assist
with designing the optimum way of extracting the
data. There are exceptions, however. Occasionally,
the lack of strong IT infrastructure governance is a
contributor to the dispute. The IT systems and the
data contained within them are often a reflection of
the organisation’s maturity and overall quality; with
poorly defined processes, inadequate controls and
limited management of people, the data quality will
be poor, possibly contradictory and the opportunities
for exploitation will arise.
CD: Finally, when it comes to quantifying damages, what in your experience is the one thing that has been the difference between a good outcome and a great outcome?
Holt: The most important issue is to avoid falling
into the trap of confirmation or optimism bias.
When looking at a broad range of evidence, it may
be tempting for the legal advisers to focus only on
that which supports the case. However, the expert
should engage with all of the evidence, consistent
with the duty to the court, while setting out why they
have chosen a particular framework for looking at
this evidence. This can be important in maintaining
a credible position before the judge. Secondly, it is
important to tell a story in a coherent way, referring
not only the conceptual theory of harm and the
empirical analysis but how these are consistent with
the facts of the case.
QUANTIFYING DAMAGES IN COMMERCIAL DISPUTES
www.corporatedisputesmagazine.com CORPORATE DISPUTES Jul-Sep 2017 15
MINI-ROUNDTABLE
Grantham: For me, it is the coordination between
the legal team, be that solicitors and barristers, and
the expert. There really is no substitute for getting
people in a room together regularly to discuss the
case, update on progress, and work through issues
and points face-to-face. That working relationship is
so important and contributes to strong, compelling
expert evidence.
Bergin: As an expert, it is important to be able to
understand the possible limitations and weaknesses
of your arguments or analyses by putting yourself in
the shoes of the opposing expert and anticipating
possible rebuttal points they will come up with. This
is an important consideration, and rather than being
left to the end of a dispute, one that you should
consider as your work as an expert progresses. How
effectively could you respond to said criticism and
handle potential cross-examination?
Gray: Deep and thorough investigations of data,
accompanied by an open mind, are vital. A recent
case comes to mind whereby a party acquired
a business for £600m and upon receiving the
business realised that the business had material
performance issues. The acquiring party was unsure
as to whether they themselves had simply exercised
poor judgement or whether they were misled. With
unclear expectations of what to find, the team dug
into a huge amount of data to gain a complete
understanding of the acquisition. This included
identifying key parties to the acquisition, comparing
assertions made publicly and privately and creating
an independent assessment of company value
based upon the system data. The independent
assessment valued the business at £75m and clearly
evidenced misleading activity. In this case, the
decision to ‘fish’ within the data took the case in a
direction that could not have been anticipated at the
outset. CD
QUANTIFYING DAMAGES IN COMMERCIAL DISPUTES