THE DO’S AND DON’TS OF BRINGING YOUR FORENSIC ACCOUNTANT TO A MEDIATION

By Helen Gregory, Forensic Director

There are many reasons why forensic accountants are invited to attend mediations but care needs to be taken not to prejudice their ability later to act as expert witnesses.

Forensic accountants who are instructed to give expert evidence owe an overriding duty to the court and it is that duty that can, if care is not taken, sometimes create a tension in the context of mediations.

If a mediation takes place early on in proceedings or even before proceedings have been issued, it is not uncommon for the forensic accountant to be asked to “gild the lily” and present the ultimate client’s case in a manner that puts its “best foot forward”. Although what is said during a mediation will be subject to legal privilege, this does not absolve experts from the need to comply with the relevant legal and professional standards. For that reason, if they are subsequently instructed to give expert evidence to the court, that evidence needs to be consistent with what ever was said at the mediation.

More importantly, if forensic accountants have already been instructed to give expert evidence, this may constrain what they are able to say at the mediation. There may be discussions during the mediation to which the forensic accountants should not be privy for fear of adversely affecting their opinions.

One option is for forensic accountants to attend mediations but to be invited to sit in a separate room for part of the day or otherwise to be available on the telephone to respond to specific questions of a technical nature.

In all but the largest of cases it is likely to be prohibitively costly to employ one accountant to provide informal, “shadow” advice and another to act as an expert witness. However this ought not to be necessary as long as the risks are understood and relatively straightforward safeguards are put in place to preserve the expert’s independence.

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