Having the right forensic accounting expert on your side
August 16, 2024
The threat of litigation in a commercial dispute can be a daunting prospect. Getting a high-quality, experienced forensic accounting Expert with relevant experience and knowledge on board is an essential part of achieving a positive outcome. This is especially so when there is a complex quantum or highly technical aspect such as a cyber or crypto-currency element to the matter.
Making the right decision about which forensic accounting Expert to use and then supporting them to maximise their effectiveness involves a number of steps and some core principles. Our Head of Forensic Accounting, Nicholas Parton, has set out some helpful principles to follow:
Start looking early
The sooner the search process gets going, the better the chance of the right Expert actually being available and not already committed to another litigation. It can be detrimental to a case when the ideal Expert is found and they overly delegate to someone in their team.
Even more important is giving the Expert the opportunity to provide cost-effective input from the earliest stages of the matter, especially where there are strong prospects of the matter proceeding to Court. Your Expert can be invaluable in providing content, particularly around quantum in the pleadings, but also in identifying any potential weaknesses of the case; which may lead to a pre-trial settlement where appropriate.
Finding the right Expert
There are so many aspects to selecting an Expert, but among the most important questions to answer are:
- Are they a recognised member of the Academy of Experts? Or have they been recognised by professional guides such as Chambers & Partners or Who’s Who Legal?
- Do they have a breadth of forensic accounting experience acting as an Expert for a wide variety of industries?
- Do they have any relevant technical, sector or industry expertise?
- Have they dealt with matters of similar quantum?
- How well do they communicate and interact with others? Will they interact positively with the client and the other professional advisers involved in the matter?
- Have there been any recent adverse findings relating to their reports or evidence, which could be used to discredit them in Court?
Where possible, it could be worth checking with previous clients to cross check their experience of using the Expert under consideration.
What should be avoided is taking the easy option of instructing an Expert just because they have been used before. A better outcome for all is often achieved by instructing the right Expert for the right case.
Don’t delay issuing detailed instructions
Having decided on an Expert and retained them, don’t leave giving them detailed instructions until the last minute, so their ability to do the necessary work is time-restricted. This is particularly vital in cross-border matters when the Expert may have to operate/gather information from foreign jurisdictions to inform their opinion.
Our extensive experience has proven many times that Crypto-related matters are a key example of this – often operations are disparately located around the world and sufficient time should be allowed for the gathering the necessary information. If obtaining key information can’t be achieved in time to meet Court deadlines, your Expert may have to rely on assumptions which can inherently weaken the robustness of their report.
Even when it is not possible to agree detailed instructions at the outset, an initial letter of instruction and the provision of as much documentation as possible will get the ball rolling and avoid potentially damaging time delays and self-created scope restrictions. Fuller instructions and more information can follow.
Instructions must be comprehensive and never vague
A brief ‘you know what’s required’ letter is no substitute for detailed instructions laying out the full background to the case, the key issues in dispute and precisely what aspects the Expert is required to address, even this may have to be provided in stages. Good Experts will never assume what’s needed and ‘free-wheel’ it. But not having a clear remit, can be an expensive and inefficient basis for starting a key relationship.
Whose report is it?
Offering constructive input to an Expert’s report will always be welcomed by a good Expert, nor is there an issue with pressing them to be more robust in their views (Experts do tend to err on the side of caution). In any case, this pressure will be nothing compared to the examination they face in Court. However, seeking to re-write the report or to change the style is not advisable. After all, at the end of the day it is the Expert’s report, not the client’s nor the instructing solicitors’ and an Expert should be able to defend every word in their report in Court.
Nevertheless, a thorough review of the Expert’s report is an essential part of the process as it provides a chance to ensure the accuracy of understanding of the intricacies of the matter. Receiving detailed feedback from the legal team and the client regarding any factual errors and misunderstandings is a reassuring step in the process. Clients are often very keen to provide thorough review as they are often the most invested in the matter and, after all, they are paying a substantial sum for the Expert’s services. This review can be very helpful in mitigating the risk of a potentially embarrassing change of opinion by your Expert in the witness box.
Accept the Expert’s findings even if they are contrary to expectations
Having the weaknesses in a case set out clearly and objectively by the Expert can be a sobering moment and is not a comfortable experience for the Expert either, but what it should never do is trigger a rejection of the Expert’s opinion based on nothing more than an unsubstantiated sense of denial.
The Expert will have acquired detailed knowledge of the case, is independent, often very logical and reasoned, and has no financial incentive to steer their client towards a settlement. Their duty is to the Court. Their professional reputation is on the line.
As such, rejecting an Expert’s advice because it differs from the client’s own opinions can be counter-productive and detrimental in the long-run. If nothing else, it is surely better to hear and understand any weaknesses well before mounting the steps of the Court rather than being wrong-footed by the opposing legal team or, worse still, suffering the embarrassment of watching the negatives play out in front of the Judge.
Optimising the Expert’s role pre-trial and at trial
Expecting an Expert to attend Court to give their evidence without having had any significant input to pre-trial preparation is a surefire way to undermine the effectiveness of your Expert; they are an invaluable member of the professional team and, whilst expensive, the cost of losing at Court will be far greater.
Whilst at trial, having your Expert present during key parts of the proceedings is always advisable. The Judge will note their attendance, and that may give your Expert an edge over the opposing Expert. But more importantly, their detailed knowledge of the case and their experience as an Expert can be invaluable to their client’s Counsel in the cross-examination of the opposing Expert. Vulnerabilities in the opposing Expert’s testimony will be immediately obvious to them and not necessarily picked up by your Counsel. The margins at court can be fine and it’s always advisable to come armed with the best team.
If you are seeking professional advice for your business, Opus is here to help. You can speak to one of our Partners who can discuss options with you. We have offices nationwide and by contacting us on 020 3326 6454, you will be able to get immediate assistance from our Partner-led team.