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COMMERCIAL DISPUTE RESOLUTION

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How Forensic Accountants Help with the Resolution of Commercial Disputes

The role of a forensic accountant when it comes to commercial dispute resolution can vary greatly. From casting a subjective eye over the merits of a claim, to calculating and quantifying damages, their service will be designed to take the worry out of what could be an extremely stressful and complex situation. 

Typically, forensic accountants will first of all carry out a preliminary review of any information provided by their client, provide an initial analysis of liability in the situation, and quantify potential damages. Crucially, they can also give their opinions on the merits of a claim, which could end up saving a lot of time and money. This is why it is essential to consult a forensic accounting specialist at the earliest opportunity.

Once the early steps are completed, forensic accountants can assist with drafting letters before actions, witness statements and statements of claims — while also providing technical assistance and offering independent opinions on technical accounting matters. In addition, they will offer support throughout mediation and settlement negotiations. 

The main purpose of a forensic accountant in commercial dispute resolution comes in the investigation stage. They will carry out an in-depth review of all information and seek out new evidence with the aim of proving or disproving (depending on whether they are acting on behalf of claimants or defendants) the claim. They will then present a thorough report of their findings and can even appear as an expert witness should the case go to court. 

Quantifying damages is another integral role of a forensic accountant, as they will use all of their expertise and know-how to determine exactly how much loss has occurred and how much money is needed to make the claimant whole again. Having the unbiased and professional opinion of a forensic accountant on your side can often be the difference between success and failure.

Why Work with Forensic Accountants

Commercial disputes are often incredibly complex and usually need a robust approach and commercial know-how to get to the crux of the matter. A forensic accountant can provide just that, while doing everything they can to deliver a positive outcome for their client. 

Resolving commercial disputes requires a detailed analysis of accounting and financial records to trace, identify, and assess the compensation or benefits a claimant should receive during the process. This is something only a specialist forensic accountant can achieve.

Types of Commercial Disputes

There are many different root causes of commercial disputes, including:

  • Contractual disputes
  • Transactional disputes
  • Compulsory purchase orders
  • Shareholder/partnership disputes
  • Professional negligence

Because no two cases are ever the same, a specialist forensic accountant will take the time to thoroughly understand the circumstances of the situation and adjust their approach accordingly to provide a tailor-made solution for their client.

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If you are looking for specialist commercial dispute resolution advice or support, contact one of our experts today.

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Commercial Dispute Examples

Commercial disputes come in all shapes and sizes, and can sometimes be incredibly difficult to work through. From breach of contract and share valuation, to calculating lost profit claims and profit variance, utilising the expertise of a forensic accountant can be crucial to securing a positive outcome.

Breach of Contract

If the terms of a contract have not been adhered to, and one party suffers a financial loss as a result, a forensic accountant will be instructed to quantify the losses incurred. This is to ensure that any settlement is fair and just. 

Forensic accountants can act on behalf of the claimant or defence, and are regularly instructed by solicitors, individuals, and corporate organisations to assist in bringing breach of contract disputes to a satisfactory conclusion. Their expertise can be sought in a wide range of cases, such as dereliction of duties, instances of defective work, failure to deliver agreed services in time or at all, and not paying for a specified service within the agreed timeframe.

Contract Variation

The course of business does not always run smoothly, and sometimes changes need to be made to pre-existing agreements. A forensic accountant can analyse the proposed variation of a contract to quantify any losses that may occur should the changes go ahead. If a variation has already happened, they can also provide an assessment of damages that have been inflicted. 

Due to the potential impact a contract variation can have on a business, it is essential to seek specialist assistance from a forensic accountant at the earliest opportunity. This could save both parties a lot of time and money in the long run. A forensic accountant will also be able to carry out an in-depth financial analysis of the proposed deals to ensure that nobody will be left unjustly out of pocket.

Valuation of Shares

Should a shareholder or business partner decide to step away from the organisation, disputes can often arise surrounding the true valuation of shares. A forensic accountant will be brought in to carry out an in-depth review of the company’s finances and quantify how much a person’s stake in the company is actually worth. 

Another potential cause for shareholder disputes is if a person believes they are not being paid the true value of their shares. In this scenario, a forensic accountant will once again be brought in to not only analyse how much the shares are worth, but also quantify any losses that have occurred should the claimant be proved correct. 

Forensic accounting investigations in such cases often consist of reviewing financial records, auditing the company’s assets and liquidity, and reviewing reports of profits to ensure everything is as it should be. A forensic accountant can also act as an expert witness where necessary.

Loss of Profit Claims

Loss of profit claims can arise from a variety of different reasons, from business interruption to breaches of contract. In these cases, it is essential that the claimants can adequately prove the losses they have incurred. This is where forensic accounting can help. 

A forensic accountant will typically carry out a ‘but for’ assessment of the situation, which basically involves deducing how a company would have performed if the event had not taken place. They will do this by gaining background information from involved parties, determining the true value of any sales or service that have been lost, and considering how much money has been saved as a result of this event — plus the scope for any future savings.

Once this has been carried out, the forensic accountant will then look at the actual results the company achieved and work out if there are any discrepancies between these figures and what would have happened if the event had not occurred. Crucially, they will also quantify this shortfall and can even act as expert witnesses if required.

Profit Variance Calculation

A profit variance is the difference between actual profit, and the forecasted profit in a set period. Should a variance occur and a business has suffered severe financial loss as a result, a forensic accountant can be brought in to quantify any damages.

Free eBook: The Complete Guide to Forensic Accounting

Whether you’re in the middle of a divorce, are having a disagreement with a fellow shareholder, you’re accused of/have been victim to financial crime, or are the subject of a POCA order, there is a huge variety of ways a forensic accountant can assist and support you through any situation, no matter how complicated. 

Whatever your situation, our free guide to forensic accounting is designed to help you to better understand the work done by our team of experts. We cover how the process works, when a forensic accountant’s skill set can help you, their specific areas of expertise, and much more.

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Expert Commercial Dispute Advice from Inquesta

Inquesta are proud to offer an all-encompassing commercial dispute resolution service that is backed by decades of combined experience. Our aim is to reduce the stress on our clients and their operations, and provide industry-focused advice whenever it is required.

Completely comfortable acting on behalf of both claimants and defendants, we are able to provide an independent opinion on the merits of a claim, and will use our expert forensic accounting techniques to quantify any damages that may have occurred. We have been involved in a wide array of cases, such as contractual and transactional disputes, compulsory purchase orders, professional negligence claims, and much more besides.

The best interests of our clients are at the forefront of everything we do. This is why we will take a preliminary look at a case at no cost to see if there are any areas that we can assist with. A no-nonsense approach that is dedicated to achieving results.

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Our Specialist Team

Inquesta has assembled a dedicated team of forensic accounting experts that can assist with commercial dispute resolution — whatever the circumstances may be.

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Rob Miller

Director of Forensic Accounting

A co-founder of Inquesta, Rob Miller is a chartered accountant, a member of the Institute of Chartered Accountants in England and Wales (ICAEW), and a Practising Member of The Academy of Experts.

With decades of experience in providing specialist forensic accounting services, Rob has been instructed to assist with numerous cases — such as financial investigations, criminal defence and confiscation proceedings, commercial and contractual disputes, valuation matters, and much more besides. He has acted on behalf of claimants, defendants, and as a single joint expert.

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“Rob Miller is my first choice for forensic accountancy on criminal cases. He has an impressive eye for detail and adopts a ‘user-friendly’ approach to interaction with our clients and other professionals which ensures the smooth running of any task we instruct him to undertake.”

Jennifer Richardson, Solicitor-Advocate

FAQs

The Inquesta team are specialists in assisting with all areas of commercial dispute resolution, including cases involving:

  • Contractual disputes
  • Transactional disputes
  • Compulsory purchase orders
  • Shareholder/partnership disputes
  • Professional negligence

Our directors and forensic accounting experts have vast amounts of experience in representing both defendants and claimants.

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