Points to consider when instructing an expert witness in a financial dispute?

What should you consider when instructing an expert witness in a financial dispute?

Forensic accountant and accredited expert witness Fiona Hotston Moore of FRP Advisory explains what is important in appointing an expert witness in a financial matter

[FORENSIC ACCOUNTANCY is a specialist area of accountancy. Generally forensic accountants are experienced qualified accountants in practice who have substantial commercial experience gained from decades of advising commercial and private clients and who have decided to use those skills in the specialist area of forensic accountancy.

Forensic accountancy is not for the faint-hearted and critically the forensic accountant must understand they are not a ‘hired gun’. When appointed as an expert witness the forensic accountant’s first duty is to the court not their instructing party. So what should the instructing lawyer and client consider in selecting a forensic accountant to act as expert witness?

What is the specific area of expert evidence required?

Forensic accountancy covers a breadth of financial disputes including divorce, shareholder disputes, fraud, criminal, tax disputes, insurance claims, personal injury, professional negligence, commercial disputes and criminal cases.

Forensic accountants will typically focus in specific areas drawn from their previous experience both as an expert witness and from their wider experience in general practice.

I typically act as expert witness on family matters, business valuation, commercial and shareholder disputes, professional negligence and tax matters.

Will the expert be seen as credible when giving evidence?

The expert’s CV must demonstrate their technical and professional qualifications. Typically, a forensic accountant will be a senior qualified accountant with many years of professional experience, who is a partner in an accountancy firm and also a member of relevant professional bodies such as The Academy of Experts.

At FRP Advisory, when valuing businesses our valuation experts draw on the wider ‘real life’ experience in buying and selling businesses within our group, FRP Corporate Finance. Similarly, when acting as an expert in professional negligence, we draw on our recent experience as partners within accountancy firms advising clients in order to give an opinion on the conduct expected of a reasonably competent tax adviser, auditor and accountant.

Does geography matter?

and accountant which may involve calls and, depending on the size and complexity of the business, could necessitate a visit.

At FRP Advisory, when our experts are valuing a business or advising on a commercial dispute, we will typically issue a detailed information request to the instructing party(ies) in order to facilitate our desk top review. We will then seek input from the business owners to get under the bonnet of the business as well as to draw on our own experience in a business sector. We act on instructions from lawyers across the UK and in certain cases our work can involve international aspects.

Are the expert’s fees proportionate and transparent?

Clearly expert evidence must be cost effective. In most cases the expert witness will be able to give a fee estimate for the project or stages of the project providing sufficient information is available. In all cases, hourly rates of the expert and their team should be provided. Provided the fees are proportionate to the financial dispute, cost should not be the key factor in selecting an expert witness. The expert’s fees must never be contingent on the outcome of a case.

Does the expert have the resource and capacity to take on the instructions?

The expert may work with the support of a wider team or on their own. Clearly, depending on the size of the project and the number of instructions taken, it may be advantageous for the expert to have the support of a wider team. Furthermore, certain aspects of an assignment may be undertaken more cost effectively by team members. However ultimately the expert witness must take full responsibility for their opinion.

Is the expert conflicted or could they be perceived to be conflicted?

It is critical that the expert is not conflicted or could be perceived to be conflicted. The expert should confirm that they are not aware of any conflict, having undertaken appropriate internal checks. Expert advice must be objective and fair and thus it is essential that conflicts –perceived or actual – are avoided.

In conclusion, professional accountants and auditors must demonstrate objectivity in their client relationships. However, this is even more fundamental to the role of the accountant as expert witness. In acting as expert witness the forensic accountant’s duty is to the court. The instructing lawyer, client and barrister are best served by an expert who demonstrates this independence of mind from the point of instruction through to the point (if reached) of giving evidence. q www.yourexpertwitness.co.uk 19 19