When Should a Solicitor Instruct a Forensic Accountant in a Commercial Dispute?
·12 min read
Financial issues can become central to a commercial dispute long before a claim reaches trial. Questions may arise about the value of a business, the amount of loss suffered, the movement of funds, the reliability of accounting records, or the financial consequences of a particular event.
In some cases, these questions may be addressed using the parties' existing financial records and legal analysis. In others, specialist accounting and financial expertise may be relevant.
For solicitors, the timing of a forensic accountant's involvement can therefore be an important case-management consideration. Early involvement may assist in identifying financial issues that may require specialist analysis, while later instruction may be appropriate where the financial questions only become clearer as the dispute develops.
This article considers circumstances in which a solicitor may consider instructing a forensic accountant in a commercial dispute, together with practical issues that may be relevant before an instruction is made.
What Does a Forensic Accountant Do in a Commercial Dispute?
A forensic accountant applies accounting, financial analysis and relevant professional expertise to financial questions arising in a dispute or investigation.
Depending on the circumstances, this may involve:
- analysing accounting records and financial statements
- reconstructing financial information from incomplete records
- analysing financial transactions and movements of funds
- assessing the financial effect of a disputed event
- considering business or share valuation issues
- reviewing calculations of loss or damages
- examining financial evidence prepared by another expert
- identifying assumptions, inconsistencies or gaps in financial analysis
- preparing expert evidence where the court permits or requires it
The precise role depends on the issues in the case and the nature of the instruction.
Where an accountant is instructed to provide expert evidence in civil proceedings, the expert has an overriding duty to the court. Expert evidence is also subject to procedural controls, including restrictions on the evidence that may be relied upon and the scope of any permission given by the court.
For information about the firm's work in this area, see the forensic expert witness services.
When Might a Solicitor Consider Early Forensic Accounting Input?
There is no single point at which every commercial dispute requires a forensic accountant. The appropriate timing will depend on the nature and complexity of the financial issues.
There are, however, circumstances in which early specialist input may be worth considering.
The financial claim is difficult to quantify
A claim may involve significant financial consequences, but the amount may not be straightforward to calculate.
For example, the dispute might involve:
- lost revenue
- lost profits
- additional costs
- business interruption
- diminution in value
- disputed transactions
- other financial consequences arising from the matters in dispute
A forensic accountant may assist with analysing the available financial information and identifying which components may require further investigation.
This does not determine the legal merits of the claim. The purpose of the financial analysis is to address the accounting or financial questions within the scope of the instruction.
The accounting records are incomplete or difficult to reconcile
Financial information may be spread across accounting systems, bank records, invoices, management accounts, tax records, spreadsheets and other documents.
Records may also contain gaps or inconsistencies.
Where the financial position cannot readily be understood from the available records, specialist analysis may assist in establishing what information is available, what can reasonably be reconstructed and what limitations remain.
Those limitations are important. Financial analysis should distinguish between information supported by the evidence and assumptions or estimates introduced because information is unavailable.
There are questions about the movement of funds
Commercial disputes can involve questions about payments, transfers between entities, related-party transactions or the destination of particular funds.
A forensic accountant may be instructed to trace transactions through available financial records and establish a documented sequence of movements.
This type of analysis may assist where a solicitor needs a clearer understanding of the financial evidence or needs to identify whether further financial information may be relevant.
A business valuation issue has arisen
Shareholder and partnership disputes can involve disagreement about the value of a company or an interest in it.
The financial questions may include:
- which financial information should be considered
- how historical performance should be analysed
- what assumptions are relevant
- how future performance should be considered
- which valuation methodology may be appropriate
- how particular assets or liabilities should be treated
A valuation expert may be appropriate where the dispute requires specialist financial opinion rather than simply an interpretation of the accounts.
When Might Instruction Be Appropriate Later in the Dispute?
Early involvement is not always necessary.
A solicitor may first need to establish the legal issues, obtain relevant disclosure or understand the opposing party's position before determining whether expert accounting evidence is required.
After financial disclosure
Once relevant financial documents have been obtained, the scope of the accounting issues may become clearer.
At that stage, a forensic accountant may be asked to assess:
- whether the records provide sufficient information for the relevant calculation
- which documents require further examination
- whether particular transactions require investigation
- whether additional financial evidence may be needed
- whether the opposing party's calculations can be reconciled with the underlying records
The timing should remain consistent with the applicable procedural directions and timetable.
After receiving an opposing expert's report
Depending on the circumstances, specialist input may assist the legal team in understanding the methodology used by another expert, assessing the underlying financial evidence and identifying areas of agreement or disagreement.
The purpose of such a review will depend on the case and the scope of the instruction. It may involve examining the calculations, source documents, assumptions and methodology used in the report.
This is different from instructing an expert simply to produce an alternative calculation. Any expert analysis should be based on the available evidence and remain within the expert's area of expertise.
What Financial Issues May Require Specialist Analysis?
The need for a forensic accountant will depend on the issues in the particular dispute. Common areas of financial analysis can include the following.
Loss and damages
A commercial claim may require analysis of the financial consequences of an alleged breach or other disputed event.
This may involve examining historical trading information, identifying relevant periods, considering alternative scenarios and testing the assumptions underlying a loss calculation.
A forensic accountant does not decide whether a claimant is legally entitled to damages. The role is to address the financial questions within the scope of the instruction.
Business or share valuation
Valuation disputes can require analysis of financial statements, management information, forecasts, assets, liabilities and other relevant financial evidence.
The appropriate approach can vary according to the circumstances and the valuation question being considered.
Financial record reconstruction
Where records are incomplete, a forensic accountant may be asked to reconstruct aspects of the financial position using the information that remains available.
Any reconstruction should make clear which figures are directly supported by records and which depend on assumptions or estimates.
Fraud-related financial analysis
Where there are allegations involving financial irregularities, accounting analysis may assist in examining transactions and identifying patterns that may require further investigation.
The accountant's role is to analyse the financial evidence rather than determine civil or criminal liability.
Shareholder and partnership disputes
Financial expertise may be relevant where disputes concern company performance, shareholder interests, distributions, transactions involving connected parties or the value of an ownership interest.
The precise scope will depend on the issues raised in the proceedings.
For a broader view of the specialist areas covered, see the forensic accounting expertise section.
What Should a Solicitor Consider Before Instructing a Forensic Accountant?
Before making an instruction, it may be useful to define the financial questions as precisely as possible.
1. What question needs to be answered?
A broad request to "review the accounts" may not provide sufficient direction.
A more focused instruction might identify a particular calculation, transaction, valuation issue or area of financial disagreement.
The expert should understand the questions they are being asked to address and the relevant factual background.
2. What evidence is currently available?
The solicitor may wish to consider what financial records are available and whether there are known gaps.
Depending on the case, relevant material could include:
- statutory accounts
- management accounts
- general ledgers
- bank statements
- invoices
- contracts
- payroll records
- tax records
- financial forecasts
- accounting databases
- transaction schedules
- correspondence concerning disputed payments
The precise documents required will vary from case to case.
3. Is expert evidence actually required?
Not every financial issue requires expert evidence.
In civil proceedings, expert evidence is subject to procedural control, and permission may be required before a party can rely on expert evidence. The rules also provide that expert evidence should be restricted to what is reasonably required to resolve the proceedings.
The solicitor should therefore consider whether the issue genuinely requires specialist opinion and whether expert evidence is proportionate in the circumstances.
4. What procedural stage has been reached?
The timing of instruction can be affected by case-management directions, disclosure, expert evidence timetables and any requirements concerning permission to rely on expert evidence.
The applicable court order and procedural rules should be considered for the particular case.
5. Is the expert being asked to provide evidence or advice?
The distinction should be clear.
An accountant may provide specialist assistance to a legal team during the development of a case. Where the accountant is instructed to provide expert evidence, additional procedural requirements apply.
The expert evidence framework requires an expert to provide independent and objective assistance to the court rather than act as an advocate for the instructing party.
Expert Evidence and the Timing of Instruction
The timing of an expert instruction should be considered alongside the procedural requirements of the particular proceedings.
Where expert evidence is proposed, the solicitor may need to consider matters such as:
- whether permission is required
- the issues on which expert evidence is necessary
- the scope of the proposed expert's opinion
- the applicable timetable
- the documents required for the analysis
- whether another expert has already been instructed
- whether experts may be required to discuss areas of agreement and disagreement
- whether questions may be put to another expert under the applicable procedure
Where an expert is instructed to provide evidence, the instruction should allow sufficient time for the expert to consider the relevant evidence and prepare their work in accordance with the applicable directions.
The timing will vary between cases. There may also be circumstances where specialist financial input is sought initially on an advisory basis and the role develops as the case progresses.
What Happens During an Experts' Discussion?
Where the court directs experts to discuss their evidence, the purpose is generally to identify and narrow areas of agreement and disagreement.
An experts' discussion does not necessarily involve every issue in the proceedings. The scope will depend on the court's directions and the issues addressed in the experts' reports.
For a financial dispute, the discussion may involve matters such as:
- the financial data relied upon
- calculations
- assumptions
- methodology
- areas where the experts agree
- areas where the experts disagree
- issues that remain unresolved
The discussion should not be treated as an opportunity for an expert to advocate for the instructing party. The expert's role remains one of independent assistance to the court.
What Can Happen If a Forensic Accountant Is Instructed Too Late?
There is no universal consequence of late instruction, but timing can create practical difficulties.
For example, late involvement may leave less time to:
- obtain missing financial records
- analyse large volumes of transactions
- identify accounting discrepancies
- test assumptions
- respond to another expert's report
- prepare an expert report
- address questions from the other side
- comply with procedural deadlines
These considerations do not mean that every case requires a forensic accountant at the outset. They indicate why the financial issues and potential need for specialist evidence may be useful to consider during case planning.
How Should the Scope of the Instruction Be Defined?
An instruction may be clearer when it identifies the financial questions without asking the expert to determine matters outside their expertise.
For example, the instruction might distinguish between:
- the factual information the expert should consider
- the financial questions requiring specialist analysis
- the documents currently available
- any known limitations in the evidence
- the questions the expert is expected to address
- the procedural timetable
- whether the intended role is advisory or evidential
Clear instructions may help define the scope of the work and reduce the risk of unnecessary analysis.
Where expert evidence is required, the relevant instructions and the expert's duties should be considered in accordance with the applicable procedural rules.
Key Questions for Solicitors
Before instructing a forensic accountant in a commercial dispute, it may be useful to ask:
- What financial issue requires specialist expertise?
- Is the amount or nature of the financial issue currently clear?
- Are the underlying accounting records complete?
- Are there unexplained transactions or discrepancies?
- Is a valuation required?
- Is a loss calculation being disputed?
- Has another financial expert already been instructed?
- Would specialist review of an opposing expert's report be appropriate?
- What procedural directions apply to expert evidence?
- Is the proposed work proportionate to the issues in dispute?
- What documents will the expert need?
- Is the intended role advisory, evidential, or potentially both at different stages?
Conclusion
A solicitor may consider instructing a forensic accountant where a commercial dispute raises financial questions requiring specialist accounting or financial analysis.
The appropriate timing will depend on the circumstances, including the nature of the financial issues, the available evidence, the procedural stage of the case and whether expert evidence is actually required.
Early input may assist with identifying financial questions and evidential requirements. In other cases, instruction after disclosure or after an opposing expert's report may be more appropriate.
The key consideration is whether there is a specific financial question requiring specialist expertise and whether that expertise is reasonably required and proportionate within the relevant proceedings.
For civil litigation in England and Wales, the requirements governing expert evidence should be considered alongside the particular court directions and procedural timetable.
Contact the forensic expert witness team if you require further information about the firm's forensic accounting and expert witness services.
Disclaimer: This article provides general information only and does not constitute legal, accounting or other professional advice. The need for, timing of and permitted use of expert evidence will depend on the facts and procedural requirements of the individual case.
Last Reviewed: September 2026