The accountant as 'assessor' in arbitrations
As court fees rise and delays in the court process increase, more and more litigants are considering arbitration to settle disputes.
In such cases the parties often appoint expert witnesses to provide evidence on their behalf, but the Arbitration Act 1996 allows for the arbitrators themselves to receive specialist advice.
Section 37 of the Act states that “unless otherwise agreed by the parties” arbitrators have the authority to appoint experts to assist them in relation to technical matters outside their area of expertise.
For complex financial or commercial cases forensic accountants can often provide valuable support to arbitrators from a legal or construction background but care needs to be taken to ensure that the terms of their instruction are carefully framed. Best practice therefore dictates that the arbitrator should obtain the parties’ consent to draft instructions of the expert and the scope of those instructions should ideally be agreed in advance.
It is important that the arbitrator obtains the parties’ consent to:
- the identity of the proposed forensic accountant;
- his or her estimated costs;
- the issues on which the expert will be asked to advise;
- the timeframe for providing the advice;
- the procedure for the expert’s instruction.
This article first appeared in NIFA News, the newsletter from The Network of Independent Forensic Accountants; issue 38.