The Expert Accountant - post Woolf.
It has always been the case that a good expert should have an open and enquiring mind, the ability to render complex technical matters accessible to non-experts and a respect for the complexity of disputes and their underlying causes. Experts separate the relevant from the irrelevant, identify relationships between facts and identify errors. I would suggest the civil procedure rules brought in by the Woolf reforms have assisted experts to understand their role. I do not think it a coincidence those accountants who appeared to take extreme views on the value of a claim, now appear to have moderated. That must be good news for all parties because more meaningful negotiations can take place – and it saves time. A key objective of the Woolf reforms was to settle more disputes before they reached court. This has been achieved in a number of cases where experts have been involved in a case from the outset. All too often, however, the case is well developed before the expert accountant is approached. The accountant can make a valuable contribution at many stages: – giving preliminary advice on quantum, – advising on additional evidence to be requested, – helping the client and their legal advisers in their preparation for, and attendance at, any alternative dispute resolution process, – meeting with the other side’s expert to narrow areas of disagreement, – advising on a claimant’s proposed settlement/Part 36/offer, or in connection with a payment into court. An initial study of quantum at an early stage ensures parties are aware of the amount at stake before proceeding with the litigation, often an early settlement can be reached. This is demonstrated in two recent cases where we were appointed when the case was nearing its conclusion. Following an examination of the claim we determined property valuations that had been performed were not relevant to an assessment of quantum. The costs of these valuations together with legal time could have been avoided if an expert had been appointed earlier. Probably the biggest change that expert accountants have faced is the extensive use of the joint statement/report to narrow the areas in dispute. Often, when instructed to meet the other party’s accounting expert, the accounting matters and the calculation of quantum can be agreed, subject to matters of law or clarification of the evidence. When used correctly the joint statement serves a number of purposes. It helps to eliminate misunderstandings, it usually provides a range of the quantum in the case and, more importantly, it often results in an early settlement – avoiding trial costs. Even where there are issues which require a trial, the experts can narrow the areas of disagreement, thus saving expense. The expert’s role has evolved over the years from that of the generalist, assisting in the resolution of ad hoc disputes, while continuing with a variety of other accounting and audit matters, pre-Woolf, to a specialist. As the complexity of disputes increases in the future, we believe the expert accountant will need to specialise on a specific area such as construction. There will also be an increased need for e-business specialists to deal with the complex disputes which will inevitably follow. The expert has an important part to play in alternative dispute resolution, particularly mediation. My experience is this process is largely about effective negotiation. The parties need to be well informed about the merits of the claim and the underlying value. The accountant plays an important part in this, and of course does not have to act within the straight jacket of the CPR. Overall, expert accountants will increasingly need to assist information requests and settlement negotiations in addition to the preparation of independent expert witness reports. This may develop further in the future to a role as a mediator or financial advisor. The Woolf reforms are, however, only one part of the changing world facing the expert accountant. As new technology is introduced in business complex disputes requiring IT accounting specialists will follow. – Tony Parton is a partner in the dispute analysis and investigations practice at PricewaterhouseCoopers.