The role of forensic accountants as experts in matrimonial disputes has evolved considerably in recent years.
Historically their instruction was often limited to business valuations in the context of identifying the property and financial resources available to the parties to the marriage. Those valuations were often conducted on an overview basis only.
Expert accountants now play a more active role in cases often providing lawyers and clients with detailed and critical analysis of financial disclosure issues generally. This includes (but is not limited to) bank statement and financial disclosure review, review of corporate interests and structures, considering and evaluating pension rights, identifying ways in which funds can be released from family businesses and reporting on alternative settlement structures to avoid the need to dispose of certain business assets.
In particular, the forensic accountant can play an important role in assisting lawyers with the preparation of disclosure questionnaires. There is often value to parties therefore in engaging accountant experts at an early stage in the proceedings. The type of disclosure information identified by forensic accountants as being significant in a case can help to narrow the issues in dispute and even expedite early settlements.
The Cayman Islands Grand Court examined the duty of experts and provided guidance on valuation expert reports in the case of AK v TK (unreported). Williams J. highlighted that the use of expert evidence, 'should be governed by the principles of relevance and proportionality… the expert's fundamental duty is to assist the Court on matters within his expertise rather than simply state that which a party wishes him to represent.'
If there is a dispute as to the value of a matrimonial asset, it is important at the first hearing that, 'efforts should be made to identify and instruct one valuer acceptable to both' i.e. a single joint expert. However, Williams J. also pointed out that, 'It may be purposeful to engage a valuer at an early stage if negotiations are commenced before proceedings.'
Our team at KSG has extensive experience advising on matrimonial finance issues. For all family law queries, please contact our family law partner, David Holland.