Making effective use of the forensic accountant
An enormous amount of time and effort is put into any litigation process, and getting the most out of it is of paramount importance. Most law firms invariably use a forensic accountant where there are accountancy issues in their litigation, but getting the most out of any expert witness is another matter. Sweeping changes in litigation are putting increasing pressure on the litigation process. The Woolf Report, difficulties with conditional and contingency fees and the pressures placed by insurance companies and legal expenses insurers have posed new challenges for litigators across the UK.The Woolf reforms, in particular, will require very close liaison and understanding between the litigator and their experts, from the earliest stages of the dispute. The whole tenor of the Woolf reforms is openness up-front. This will mean that experts have to be brought in much earlier than has been the case historically. An additional pressure is that of ‘Part 36 Offers’. Under the new Civil Procedure Rules (CPRs), which came into force on 26 April, both sides can now make offers which have the effect of payments into court. And there are swingeing penalties if the party has got it wrong at the outset. A court can order a defendant, who has made an inadequate offer, to pay, in addition to damages, interest at up to 10% over base rate and costs on an indemnity basis. Thus early and accurate advice as to the merit of the case – on both liability and quantum – is now essential.KPMG’s forensic accounting team is providing an increasing number of services for litigators in assisting them to calculate and provide evidence of quantum, to follow up fraud and trace funds, and to express an opinion on an accountant’s standard of care in negligence actions.An early understanding of the issues being faced by the forensic accountant will ultimately help make a lawyer’s litigation – to the extent in which it involves accountants and accountancy topics – more effective and beneficial.
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