There are many different forms of commercial dispute cases, ranging from contractual disputes to professional negligence claims. If a business owner believes they have suffered a financial loss due to one of these scenarios, they can contact a forensic accountant to help quantify their loss and provide an impartial view on the merits of their claim.
The main types of commercial disputes include:
- Contractual disputes (such as lack of delivery or breaches of agreements)
- Outsourcing disputes
- Reputational disputes
- Patent and intellectual property disputes
- Professional negligence
- Compulsory purchase orders
- Transactional disputes
- Breach of duties
A specialist forensic accountant will be comfortable acting on behalf of a claimant or defendant in commercial dispute claims and will endeavour to bring the case to swift and successful resolution for their client.
Defending accusations of financial crime can be complicated. There will be a mountain of paperwork to review, and complex transactions to be scrutinised and followed. The expertise of a forensic accountant is crucial here, as it provides criminal defence solicitors with the know-how required to delve deep into the facts and uncover lines of enquiry that may otherwise be missed.
Financial crime cases are often built on the prosecution’s interpretation of the information, rather than a deep analysis of evidence and expert opinion. By understanding the facts and figures of a case, a forensic accountant can build a solid foundation for their client, upon which their defence team can operate.
It is not just in analysing the data and providing an expert opinion in which forensic accounting excels. By detailing their findings in an in-depth report that is easy to understand by both the judge and jury, and appearing as an expert witness during court proceedings, there are many ways in which a forensic accountant can add value to their client’s case.
Allowing partnership and shareholder disputes to continue for too long can be particularly damaging for a firm. With disagreements usually arising due to conflicting opinions about the value of a company, forensic accountants can assist by carrying out an in-depth investigation into the firm’s finances and standings to help bring the dispute to a close.
There are several reasons as to why partnership and shareholder disputes can arise. Perhaps a company’s shareholders believe that the directors are not carrying out their duties correctly or are in breach of them completely. They may even believe that their share dividends are not being paid out as they should be. Another potential cause for disagreement is when a shareholder or member of a partnership wishes to exit a company or liquidate it completely. A conflict of opinion can sometimes arise on the terms of departure and the value of their shares.
Whatever the circumstances, a forensic accountant can assist by collating, analysing and consolidating information to justify their client’s standpoint. This can involve anything from reviewing a firm’s financial figures, performing audits of its liquidity and tangible assets, to interpreting income reporting and profit and loss accounts. Forensic accounting can also be called upon to quantify damages, appear as an expert witness, or even rebut reports by opposing expert witnesses.
From marital disputes and divorce, to disagreements surrounding trusts and family businesses, there are many family dispute cases that forensic accountants can resolve. They do this by analysing money and paper trails, while also monitoring communications and looking out for behavioural changes. The aim is to ensure a fair result for all parties and a swift end to the argument.
When it comes to marital disputes, a forensic accountant can assist with the tracing of assets to determine that nothing has been hidden away — such as cash, stocks, annuities and insurance policies. If the two parties own a business together, forensic accounting can provide an assessment of the firm’s value in case one person wants to exit the enterprise altogether. Forensic accountants can act on behalf of one party or both as a Single Joint Expert. Because the disposal of assets could also attract a large Capital Gains Tax (CGT) bill, a forensic accountant can also be utilised to minimise the impact CGT can have.
Probates and trusts are also common family dispute cases that forensic accounting can help resolve. Duties involve analysing whether custodians of the trusts or probate have acted properly according to their obligations and that any assets have been distributed as intended. If instructed early on, a forensic accountant can bring a dispute to a conclusion without the need to resort to litigation. Meanwhile, for family businesses, a forensic accountant can assist in the same ways as standard commercial or partnership disputes.
Business interruption can be a huge drain on a company’s resources. Business insurance is designed to compensate the owners of a firm for their loss, if it was due to the actions of a third party, natural disaster, or other eligible cause. It is the job of a forensic accountant to quantify and prove this loss actually took place.
Commercial insurance claims can cover a wide range of costs, such as payroll and taxes, to property damages and the breakdown of essential equipment. Situations such as cyber threats, loss of connectivity and fire damage are usually covered under these policies, which can prove to be an essential lifeline for companies in their hour of need.
A forensic accountant will work with a claimant and their loss adjuster to put together a detailed claim and assist with the negotiation process to bring about a swift resolution. They can also operate on behalf of insurers or act on a joint basis.
It is unfortunate, but personal injury caused by negligence is quite a common occurrence and can result in the loss of earnings and/or pension. Forensic accounting can help quantify any financial damages incurred and act as an expert witness should the case proceed to the litigation stage.
No matter whether the loss of profits and/or earnings relates to personal injury, fatal accidents or clinical negligence, forensic accounts will act on behalf of either party, or on a joint basis. They will be instructed as an expert witness with a view to giving evidence in court, and can assist with anything from simple claims, to complex loss of profits.
It is worth pointing out that a forensic accountant does not act as a claims management company, nor will they manage a personal injury claim case.