European finance ministers are currently learning what matrimonial lawyers have known for years - a change in relationship is rarely straightforward when there is a lot of money at stake. However, at a time when financial complexity in matrimonial cases invariably leads to a consideration of whether an accounting expert might add value by, for example, assessing share value in a family business, the level of sustainable future earnings from a business or even how a business has been conducted in the run-up to a hearing, there are things that the matrimonial lawyer can do to manage and mitigate the financial risk faced by their clients.

Matrimonial lawyers should consider the following five practical tips when dealing with accounting experts.

1. Update the Articles

It is a truth universally acknowledged that the Articles of a family business will invariably be in want of detailed provisions on how shares are to be valued in the event of divorce or separation or possibly even at all. The more adventurous will have terms such as fair value or fair market value liberally scattered throughout their Articles but shareholders excited in the first flush of making their fortune will probably not know either what these valuation terms mean or their practical consequences.

We have seen pre and postnuptial agreements - this is the business nup. Matrimonial lawyers should be liaising with their commercial colleagues to ensure that every set of Articles is clear about how shares are to be valued in particular circumstances. You may wish to get beyond conventions and actually specify a formulaic approach to value thereby rendering an accounting expert’s opinion superfluous and saving costs. In the process, you will likely generate additional fees and client goodwill for your own practice.

2. Courts do not like expert appearances

At a formal hearing, once the experts start circling overhead solicitors understandably start to become uncomfortable. How much is this all going to cost and how long is it going to take?, and is the expert going to say something that is completely off piste?, are questions that come to the fore. Judges often see the appearance of an expert as a threat to good case management. For all of these reasons legal procedure emphasises the need to narrow issues or clarify the position of the expert.

Under Family Procedure Rule 25.6 a party may put written questions to an expert in order to clarify the expert’s report. A good set of questions can obviate the need for expert testimony and will assist the matrimonial lawyer in managing the risk associated with a formal hearing. When considering what areas require clarification and how questions might be framed the matrimonial lawyer would do well to consider obtaining professional assistance by engaging a forensic accountant to advise. Depending upon the amount of material that has to be considered this should take no more than a few hours reading and the cost/benefit return of a focused, well-directed set of questions can be enormous.

3. Communicating with a single joint expert

Make sure that the ground rules of communication are agreed between the parties. It is quite simple really - all communication to or from an appointed single joint expert should be copied to the legal representatives of the other party. Make sure that the expert understands this.

All too often the single joint expert is used as a conduit to argue a client’s financial case with a copy to the legal representatives of the other party knowing full well that the other party will likely feel obliged to respond. There are mechanisms in place for such a dialogue - involving the expert simply adds to expense.

4. Get a letter of engagement

Astonishingly, we still come across situations where there is no letter of engagement in place with an appointed expert. A letter of engagement should set out the work that will be done, cost and timetable for completion of the work. Every expert that you come across should expect an instructing solicitor to require this so there should not be any objection - if you encounter resistance to this basic procedure from your expert you would be right to feel concerned and may wish to reconsider whether the person you are dealing with has the necessary experience and expertise. Again, it is all about risk management. The key with expert fees is not to have any surprises.

5. Potential conflicts

If a reporting expert identifies tax or accounting irregularities or issues in your client’s financial affairs your client will most likely want to obtain input from their existing accountants to assist in rebuttal or explanation. Always bear in mind that the point at issue may well have been occasioned by or reflect advice previously given by your client’s accountants and they may well not be best placed to comment upon the position. This potential conflict should be raised with your client and independent advice taken if there are doubts regarding objectivity in respect of a key financial issue. This will save time and wasted costs in taking forward an argument so that existing advisors can save face.

Paul Smethurst is a forensic and corporate investigation specialist at accountancy firm, Carter Backer Winter LLP