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There are a number of areas in which we can assist in the determination
of disputes between individuals and, where necessary, to support
the legal process by providing expert accounting evidence and advice
to Solicitors and Barristers. It is a fact of life that individuals
are much more knowledgeable nowadays as to their legal rights (although
sadly not so knowledgeable about their legal obligations) resulting
in the emergence of an increasingly litigious society. We are frequently
asked to advise on accounting issues associated with disputes and
to provide expert accounting advice based upon current accounting
principles and standards. The major areas in which specialist accountancy
advice may be required are probably as follows:
The most common aspects in respect of which the advice of an Accountant
may be sought are:
• The valuation of family businesses or shares in
family and unquoted companies.
• The taxation consequences
of divorce.
• The establishment of
family assets.
• Quantifying reasonable
requirements.
Very often it is possible to resolve the financial aspects of matrimonial
disputes on an informal basis without the need to proceed to the
Court. This is particularly advisable in relatively small cases
where there is a need to keep legal costs, which come out of the
family pot, to a minimum. It is also more likely that any matrimonial
settlement based on negotiation, will be fairer than a settlement
imposed by the Court.
Even in those partnerships which are governed by a binding Partnership
Agreement, it is our experience that disputes between Partners are
a common occurrence. Where there is no Partnership Agreement the
provisions of the 1890 Partnership Act apply and disputes are even
more frequent. As with divorce, the most common aspects upon which
the advice of an expert Accountant will be relevant are:
• Business valuation
• Taxation consequences
of partnership cessation.
• Litigation Support
Litigation has become a substantially more sophisticated process
over the last few years. The nature of the expert support available
to Lawyers of the parties has been one of the causes. The parties
have, as a result, become increasingly dependent on expert assistance
from professions other than Lawyers. The assistance is required
to evaluate the merits and value of a claim and to identify the
steps which are necessary to prepare the case for trial.
Most commercial litigation involves money and, indeed, civil proceedings
are normally undertaken for financial reasons. Therefore it is natural
that Accountants are called upon to provide expert accounting evidence
in litigation cases.
Many businesses seek to insure against the financial consequences
of fires or other insurable risks. In these cases it is the role
of an expert Accountant to negotiate a claim for loss of profits
with loss adjusters acting on behalf of the insurance company concerned.
The involvement of a specialist Accountant at the earliest possible
stage can speed up and facilitate an early settlement of claims
and ensure that full restitution is made within the terms of the
insurance policy.
Finally it should be borne in mind that we are often asked to give
independent expert accounting advice in the above, and many other,
matters where the firm or company Accountant is precluded from advising
because of a conflict of interest. In such cases an independent
firm would be engaged on a one-off basis to give separate advice
where this is needed.
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