Bishop & Anor v Transport for London 
The case concerns a firm called Metal Recycling Plc that had sought £4,177,782 in compensation from a compulsory purchase order by TfL, for land required for Crossrail. The subsequent appeal, which was rejected, was against the awarding of 80% of the costs to TfL.
The forensic accountant’s view
The case might appear to be unusual because the claim was for potential loss of earnings (the appellant had a lease lasting until 2031) and not just the value of land and associated costs. However, the rejection of the appeal would appear to hang more on the fact that the tribunal did not believe the appellant had a long-term viable future. Indeed, the firm ceased trading not long after receiving notice of entry, and later went into liquidation.
‘As an observer, I would suggest that insufficient evidence or information was given to persuade the tribunal,’ says Vikki Wall, Partner at Haberman Ilett. For Wall, the four issues from the accountancy side are: lost income from the business conducted at site until the expiry of the lease; lost income before they left the premises; costs of vacating; and losses from equipment. ‘Those four different heads seem reasonable to me, and I can see why a specialist was asked to look at them.’
However, ‘three of those would have missed completely,’ she says, ‘and even in expenses in vacating, the full amount was not given; about £46,000 of the claimed £56,513 plus VAT was awarded.’ As Wall explains, ‘laws on compulsory purchase orders are slightly different from usual rules on what costs should or shouldn’t be granted.’
Second reason the appellant found itself liable for costs
The appellant rejected a sealed offer to settle the claim, of £378,000 plus costs. The appellants ‘thus became liable for costs from a certain period.’ TfL’s position throughout was that the appellants were not entitled to compensation because they couldn’t prove that, had the site not been taken, the land would have generated enough to pay them the amount they said it would.
The case required both sides to hire expert witnesses, but might seem to have been settled without significant reference to the expert reports. With this in mind, what are the costs to hire an expert, and what is the ultimate value of those costs if you lose? ‘We generally charge our costs on an hourly rate basis,’ Wall says. ‘I will give an estimate at the start, revise that based on the work I’m expected to do, and if the scope changes, that might get revised.’
For Wall, the key here is that ‘the work is not related to the claim. Unlike the counsel team, my duty is to assist the court or the tribunal.’ The reason is impartiality – ‘if I had contingency arrangements on the success of the case or the amount of the award, I couldn’t be seen to be independent.’ There is a caveat, which is that ‘you would expect the work to be proportionate to the amount of the claim; I wouldn’t have a huge team on a small claim.’
If the ultimate decision makes little to no reference to the expert report, is there a duty on the expert to stop incurring costs? ‘The brief answer to this is no. Again, my duty is to assist the court or the tribunal, not the person who pays me. I do have conversations with my client and their counsel, so they understand my views as an accountant rather than a legal opinion on the outcome of the case.’ The expert’s job is to say: ‘this is the range of the likely outcomes, and if I were on the other side, this is what they might argue against you.’
In other words, the perceived rejection of the expert evidence would not have been a criticism of the forensic accountant’s report, rather that there were other considerations to take into account that were not to do with the numbers.
‘The role is to help get the right answer. If the issue turned on liability, the forensic accountant’s work might not be needed; but that doesn’t mean it was inappropriate to ask them in the first place. The onus is not on the accountant to stop because of what has happened in hindsight.’
In conclusion, ‘the appellants might have won the appeal, had the business been a going concern.’ The forensic accountant ‘would have given a range of opinions; it’s what the appellants believed; but the tribunal wasn’t persuaded.’ Then, because the sealed order was higher than the award, ‘it led to a very different situation for the appellant.’
The views and opinions expressed in this summary are those of the interviewed forensic accountant, who was not involved in the case and has not seen the expert report from the forensic accountant or the transcript. The context of the interview was from the role of the forensic accountant, and no observations are made or intended about the legal case.
Mark Blayney Stuart is former Head of Research at the Chartered Institute of Marketing.
Interview is original content. Principal source for the case.