This Article was taken from NIFA Newsletter and provided by Roger Isaacs, Forensic Partner at Milsted Langdon.
The Family Procedure Rules set out the steps to be followed if an application is to be made to adduce expert accountancy evidence in divorce cases, usually from a single joint expert (“SJE”). However the fact that such applications have to be made at a very early stage, means that they are often not straightforward. This article considers some of the issues and pitfalls that should be considered.
Conflicts of interest
On the one hand it is important to ensure as soon as possible that a potential SJE has no conflict of interests that would preclude him or her from accepting instructions. However many instructing solicitors are wary of disclosing the identity of their clients when making preliminary enquiries. We suggest that wherever possible the clients could be asked to consent to their identities being disclosed to potential experts so that any potential conflicts can be identified as early as possible.
It is, however, important that, when making preliminary enquiries, no informal discussions with the potential experts take place that could prejudice their impartiality or even create suspicions in the mind of the other party’s advisor.
Resolution advises carrying out the initial enquiries by email so that there is transparency and all communications can be provided to the other side and to the court easily.
Notwithstanding this there is nothing to stop instructing solicitors from convening three way telephone conferences with potential experts at an early stage for the purposes of discussing complex issues and avoiding questions being put to experts that are ambiguous or unclear. It is best to avoid, if possible, issues being raised in letters of instruction of which the expert has not previously been given notice.
Experts are required to confirm that the issues on which they may be asked to give an opinion are within their range of expertise. It is therefore very helpful if an indication can be given as to the nature of any business to be valued or, at least, the sector in which it operates.
Experts will typically be asked about the timescales for producing reports but it should be borne in mind that their ability to meet any deadline will depend upon clients providing financial information in a timely manner.
It can often be a good idea to ask the expert for any standard lists of information that he or she typically requires recognising that more case-specific information requests may have to be made at a later date.
Wherever possible an allowance should be made in the timetable for the collation of information for the expert.
When asking an expert about periods during which he would not be available it should be borne in mind that experts typically only hold dates if specifically and explicitly requested and that most experts reserve the right to charge cancellation fees for dates that are held only to be released at the eleventh hour.
When asking the expert to estimate their likely fees it is really helpful if a set of unabbreviated financial statements can be provided. Failing that, details of the approximate level of its net assets, profit and turnover can give a useful indication as to its size.
As a bare minimum the expert is likely only to be able to give a meaningful fee quotation if he or she has a broad idea as to the order of magnitude of the business or assets that are to be considered, namely whether they are measured in the hundreds of thousands, the millions, the tens of millions or the hundreds of millions.
Reliance on other experts
It is sometimes necessary for an accountancy expert to rely on the opinions or reports of others. Most commonly accountants rely on professional valuations of properties but international cases can also necessitate reliance on accountants in foreign jurisdictions to provide advice about local accountancy or taxation issues.
If it is anticipated that the accountancy expert will need to work with or rely on the work of others, the timetable should allow time for this work to be completed.
In summary, time invested at an early stage to ensure that the enquiries made of potential experts are appropriate and comprehensive can save time and costs in the longer term for both the expert and the instructing solicitor.