The role of forensic accounting in commercial disputes

As forensic accountants we can provide valuable input in a huge variety of commercial disputes. These can include:

  • Shareholder and partnership disputes
  • Post transaction disputes 
  • Agency termination claims
  • Loss of profit claims
  • Consequential losses
  • Fraud and claims against directors of the company
  • Professional negligence matters

A forensic accountant may be engaged to assist either party in commercial disputes. The claimant has to demonstrate the loss suffered and quantify the loss and may use a forensic accountant to assist. The defendant may engage a forensic accountant to assist in defending the claim by identifying counter arguments and weaknesses in the case.

Key principles of commercial dispute claims include the need to demonstrate causation, to quantify the loss arising and to consider mitigation of the losses. The forensic accountant will need to consider the financial position in which the claimant would have been ‘but for’ the actions of the defendant. 

In assessing the loss of profits we will use information available from the entity such as financial records, board minutes, marketing information and production records. We will also research external market data such as competitor information.   

Shareholder and partnership disputes

We assist regularly in shareholder and partnership disputes which can unfortunately include disputes between family members. Typically in such disputes the outcome will be that the claimant wishes to leave the business and receive a fair value for their business interests. A forensic accountant will be called in to value the business and the usual methods for valuing businesses are adopted albeit we may need to consider the impact of the actions of the defendant. There will also need to be consideration of whether a minority discount is required. In such cases the court may instruct that no discount is to be applied.

Disputes following business sales

Ideally a forensic accountant or corporate finance accountant should be consulted before completion of a corporate transaction as such advice can reduce the incidence of disputes post sale. Typical post sale disputes on which we advise are on completion accounts and warranty claims. In completion account disputes the terms of the Sale and Purchase Agreement are key. The majority of disputes relate to revenue recognition, stock valuation and debtor provisions.

Claims on termination of commercial agency agreements

In agency claims, we are instructed to calculate the commission due under the Commercial Agents Regulations which typically involves valuing the business at the date of termination.


In conclusion, a forensic accountant can provide valuable input as expert or adviser in a variety of commercial disputes. Unfortunately the desire to control costs often means we are consulted late in the court process. We can however provide valuable input much earlier in the process helping parties to understand the strength and weakness of their positions, quantify the loss and assist in a mediated resolution.

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