Expert Witness and Litigation Support
The move into the arena of litigation support came about unintentionally for the accounting and consulting firm of EGP, when they were providing services to a client who was going through a divorce in Pulaski County some 20 years ago.
For years, the firm had worked extensively in the merger and acquisition area, where they gained experience and knowledge valuating businesses, as they assisted their clients in achieving desired results. So when this particular client had a company that needed to be valued, EGP was ready and able to provide that service for him.
The client's attorney was Dale Price, and according to EGP Founding Partner Bruce Engstrom, "getting to know Dale was one of our firm's greatest personal and professional experiences."
In the course of the divorce, the client's wife decided to move to an island in the Caribbean, from where she commuted back and forth when necessary. On the night before the trial was to begin, depositions were taken, and a settlement was reached late in the evening. Then as quickly as the settlement was read into the record, the wife departed for the Caribbean.
The next day the client was informed that his wife had suffered an accident and had slipped into a coma, and she had been transported to Miami where she was on life support.
Over the next few weeks, the hospital recommended that the life support be removed, but due to the nature of the case, no one could determine who her nearest relative was.
Immediately much confusion arose over when a divorce is final, and if in fact the couple were still legally married. However, the needs of the family eventually overcame the legal ramifications, and the client traveled to Miami to give the needed approvals.
In addition to the timing of the divorce, subsequent issues arose that caused the case to be revisited almost in its entirety, which began a long and arduous journey throughout the legal system. It was not until many years later that the case was finally able to be put to bed, and today it has become the authority on when a divorce is finalized.
During these events, EGP worked closely with Dale Price, who would go on to hire the firm on many of his future cases, and from there EGP went on to obtain several certifications in business valuation and litigation support.
Now, 18 years later, their practice has grown to be one of the main lines of service they provide for a wide variety of cases, disputes and valuations.
This area of their practice is currently managed by four CPA's, made up of three partners and one manager. The group continues to devote significant time to their professional education in valuation and litigation issues, and has been recognized as experts in both state and federal courts.
EGP is typically hired by both plaintiff's and defendant's attorneys for litigation support, valuation of closely held businesses and damage calculations, which includes interpretation of financial information for attorneys, assistance with discovery, and depositions and expert testimony.
Valuations may be done for a variety of purposes, including divorce, estate and gift taxes, shareholder disputes, mergers and acquisitions, S Corporation elections and other tax planning.
Damage calculations are made for a variety of circumstances, examples being wrongful termination and personal injury. Certain engagement may lead to forensic accounting, calculation of support payments, and marital asset schedules.
According to Engstrom, the number-one reason offered by attorneys for hiring EGP is credibility, and in this area of expertise, the firm offers expert testimony with professionally prepared reports and exhibits; professional assistance in areas where the attorney is not trained, and the ability to rebut/analyze arguments, allegations, etc. made by opposing counsel or experts. These critical components give attorneys the confidence they need in presenting his/her case.
This month's Journal of Accountancy explores "Wading into Litigation Support," which explains how CPA consultants can uncover the flaws in an opposing side's expert witness reports. One statement in this article really rings true — "that once a CPA takes the stand as an expert witness, his or her qualifications and work product are exposed to intense scrutiny."
Besides Engstrom, the rest of the litigation support and expert witness team at EGP is made up of firm partners Randy Patterson and John Green, as well as litigation support specialists Jan Robertson and Jo Spencer.
"Reputation and quality of product when rendering an opinion before your client, the court, and opposing counsel is a constant challenge and should never be tossed up to fate," Engstrom says.
"Litigation support is interesting, challenging and very rewarding, but there are perils lurking there that a CPA is not exposed to in normal type of attest work. This is what we like to do, and we work hard to do it well."
