In September, Resolution, the UK’s leading network of family lawyers, issued updated guidance for the instruction of accountant experts to assist with tax and company valuation matters.
In preparing the updated guidance note Resolution consulted with forensic accountants and NIFA board members Kate Hart and Roger Isaacs along with divorce lawyer James Pirrie, who was instrumental in bringing the project about. Kate was able to offer her perspective on how to make the process of enquiring about and instructing a forensic accountant a smoother ride for all involved.
The updated guidance note focuses on the initial enquiry and instruction of an expert accountant, with the aim of ensuring that the parties involved get the greatest benefit from the instruction.
When making an initial enquiry, in order to obtain a robust cost and time estimate, the guidance emphasises that solicitors should provide as much detail as possible about the parties and companies involved as well as the scope of the likely instructions.
Examples of required information for the purposes of providing a fee estimate:
|Trading company||Property investment / development company|
|Average / recent turnover|
Average / recent profits
Latest net asset position
Any property held (including the number of individual properties)
|Latest net asset position
Number of properties held
Location of properties (e.g. UK)
When instructing an expert accountant it is important to ensure that instructions are sufficiently detailed and cannot be misinterpreted or misunderstood as this can result in the expert providing an answer to a question the parties didn’t intend to ask. This could be achieved through joint consultation with the expert accountant prior to issuing the final instructions. We have found this can be invaluable, particularly where the impact of issues on valuation may not be clear to the parties.
The updated guidance note also ‘does what it can’ to try and address the issue of missed deadlines and unmanageable time scales. We are often approached to prepare a report within an unrealistic time frame, not least because we are reliant on the parties for the provision of the information on which we base our opinions. We understand that business owners have a business to run whilst also dealing with the distraction of getting divorced so it can take some time for the information we require to be provided. The updated guidance note proposes establishing specific deadlines for the provision of information by the parties.
The guidance includes a number of resources for instructing solicitors including a chronological checklist and template letters of enquiry and instruction.
Link to guidance notes PDF (available to members only)