A resurgence in Litigation Support advice?

In this article, Jonathan Beardsell, a senior manager in our Forensic Accounting & Investigations team, discusses the resurgence in Litigation Support assignments being experienced by the firm and highlights the benefits of retaining a forensic accountant purely in an advisory capacity early on in a case.

We are regularly instructed to act as independent expert witnesses in a vast range of disputes, ranging both in the type of dispute and size. Across the firm, at any one time, we have over 100 active expert witness engagements at various stages of progression.

However, we have recently noticed an increase in Litigation Support advisory assignments where we have acted in an advisory capacity behind the scenes, advising the solicitor and the ultimate client on how best to present their case from an accountancy/financial perspective.

Maintaining the expert witnesses’ independence is crucial. Under CPR Part 35, it is of paramount importance that an independent expert witness does not act as an advocate for their ‘side’. This doesn’t mean there isn’t also a place for separate Litigation Support style advice.

The Litigation Support advisory expert can be hands-on with gathering information, sifting through financial data and other evidence, advising the finance team of the ultimate client and the legal team on how best to present their data. 

Recent client work

We recently spent two weeks on-site with a client, holding meetings with various departments in the business, as well as gaining access to the accounting systems and other data (including the CRM system). We identified important evidence and helped the client present its data in a clear, logical and straightforward manner that highlighted the losses it had suffered from a number of different angles. This also ironed out potential ‘gremlins’ in the data, gremlins that otherwise would likely have been pointed at by the other side to suggest unreliability.  

From the opposite angle, we recently acted as independent expert witness in a different matter. We were provided with four different versions of a company’s sales forecasts. This led to further correspondence with party no.1. In summary, they explained that one was the final version (the highest forecast) and the other three should be disregarded for various plausible reasons. The explanations provided were set out in our independent report. It is likely, however, that party no.2 will have homed in on this section of our report, as it weakened the position of party no.1. This could have been wholly avoided if party no.1 had had some Litigation Support assistance.

Benefits of retaining a forensic accountant in an advisory capacity

Retaining a forensic accountant solely in an advisory capacity early on in a case can be invaluable. Ultimately, there are many potential benefits. 

  • It allows access to ongoing, completely open advice throughout the case, including before and during any mediation
  • Putting an initial claim together in a robust way can shorten the litigation and help the ultimate client realise what they need to prove for their case
  • Highlighting the strengths and weaknesses of a case early on in the process can allow for better informed tactical decisions
  • A Litigation Support advisor can liaise directly with the litigating party without the formality necessary when acting as expert witness, which speeds up the entire process
  • Hands-on assistance reduces the time spent by the finance department of the ultimate client so that they can get on with their day job, which reduces the stress put on the ultimate client
  • An advisor can help with the expert witness selection process considering their experience and credentials
  • They can assist with dealing with the expert witness’ information request
  • It should reduce the costs of the expert witness because of the logical and robust way in which the claim and supporting evidence is presented to them, so the additional Litigation Support advisory costs may net out
  • It keeps the expert witness 100% independent; it reduces the temptation to ask the expert witness for opinions they might consider outside their scope
  • It allows easy access to a second opinion in relation to the conclusions reached by the expert witness and support with queries on their evidence
  • The involvement of a Litigation Support advisor can be kept confidential from the other party

Depending on the level and nature of the early involvement, it will need to be decided by the client and their legal team whether the same experts are instructed on an advisory Litigation Support basis and as independent expert witness. It is theoretically possible to transition from an advisory assignment to an independent expert witness assignment, but that heavily depends on the level and nature of the involvement and the advice given. The transition can be problematic, so the advisory expert and their client must know the potential for early advice to be deemed disclosable and for them to be challenged for being too closely allied.

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