So why use a Forensic Accountant?

4 03 2010

Guest Blogger, Richard Forth the Managing Director of specialist Leeds- based forensic accounting firm, Forth Associates explains

I am often asked the question “So why do we need to use a Forensic Accountant?  What is wrong with our normal Accountants?”

The answer is, quite simply, that there is nothing wrong with your normal Accountants when they are preparing your year end Accounts, Tax Returns etc, in that this is where their experience lies and it is that experience, coupled with their knowledge of your business, that ensures all of these documents are prepared correctly and submitted to the relevant parties.

Our experience as Forensic Accountants is somewhat different, in that we operate in the area between the legal profession and the accountancy profession, using our skills obtained from training in the accountancy field, but also our knowledge of the law in respect to formulation of quantum in legal cases. The marrying of these skills enables us to prepare reports / advices which pull together rafts of relevant accounting documentation into a report format understood by the Court but, importantly, presented within the prevailing legal framework, such that the losses as presented follow all of the rules established by years of quantum based case law.

This is not a task which necessarily excludes input from your own accountant as they can furnish us with vital knowledge / information to assist us in our task. By presenting losses in this cogent and accepted format, it assists in progressing a case forward from a legal perspective and expediting settlement in the case.

It is often the case that we end up getting involved in cases where there has been substantial circular correspondence from Claimant to Insurance Company to the Claimant’s own accountant which has proved costly and frustrating and in many circumstances simply caused by a lack of knowledge in terms of presentation of information.

Richard Forth

Forth Associates


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Categories : Forensic Accountants, Guest blogs

Forensic Accounting

28 02 2010

A FORENSIC ACCOUNTANT OR A LOSS ADJUSTER IN FORENSIC ACCOUNTANT’S CLOTHES?

Guest blogger Richard Forth of Forth Associates in Leeds describes some concerns about the use of forensic accountants by some insurers

As many Claimant Personal Injury Practitioners will be aware, ithe managing director of Leeds basedt has become the increasing practise of many Insurance Companies, over the course of the past couple of years, to utilise the services of certain firms of Forensic Accountants to consider loss of earnings / loss of profits claims presented by them, in the pre issue phase of cases, to arrive at an assessment of such Claimant’s losses. 

Whilst, ostensibly, it could be argued that the formulation of an independent assessment of such losses, in the pre issue phase of the case, is useful, we have listened to our Claimant Personal Injury Practitioner clients and note that many have voiced significant concerns, with the way certain purportedly independent firms are undertaking this practise, for a number of different reasons, the often quoted ones being:

a)         Disproportionate requests for significant financial information in small loss cases.

b)         Perceived arbitrary assessment of losses, hidden behind a purported Expert opinion (so called spurious academia) with no detailed specified reasons as to why that assessment has been made.

c)         A perception that, in effect, the Forensic Accountants are not undertaking a full and comprehensive forensic task, rather adopting a loss adjusting type approach for the benefit of their insurance clients.

Our Claimant Personal Injury Practitioner clients have identified a number of cases where their clients have been absolutely adamant that the assessment of losses, provided by the independent Forensic Accountant in their case, was understated and we have seen a significant number of instances where we believe that this is potentially the case.

The moral of the story is beware the wolf in sheep’s clothing and, should you encounter a situation where there is a structured adamance by a Claimant that he or she is correct then full consideration should be given to instructing your own Expert in rebuttal of the other Expert’s evidence.

Richard Forth is the Managing Director of Leeds based Forth Associates offering forensic accounting services to Claimant Lawyers and Insurers alike

 


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Categories : Forensic Accountants, General accident matters, Guest blogs

VAT recovery on accident claims

11 02 2010

Guest blogger Robert Killington (The Fun VAT Man) explains about VAT recovery in accident claims. 

What’s the VAT situation for a VAT registered business that has to make an insurance claim for damage to one of it’s vehicles?

Because a VAT registered business can recover the VAT it incurs on business expenses it is able to recover the VAT on the costs of repairing its vehicle. The insurance company will meet the cost of the repairs, less any excess, and the business will have to pay the excess plus the VAT on the repair costs.  The repairer will provide the business with an invoice for the repair costs plus VAT which the business will be able to include in its business records in the normal way. The VAT on the invoice will be credited to the business on its next VAT return.

That’s the damage to the vehicle dealt with, but what about other expenses that might be covered by the insurance policy?

Can you reclaim the VAT on those?

Here I have to roll out my standard answer and that is: it depends.

It depends on whether the expenses can be seen as legitimate business expenses on which the VAT can be recovered.  If the expense relates to, for example, personal injuries to an employee and the award of damages will be paid to the employee the business is unlikely to be able to recover the VAT and could reasonably expect these to be covered by its insurer.  Only where the cost relates to some expense of the business, e.g. uninsured losses such as hire of a replacement vehicle or the insurance excess, is the business able to recover the VAT on the legal costs.

How does this affect a sole trader who is claiming compensation for injuries as the result of a car crash?

Can they get the input tax back on the legal fees?  Probably not unless there can be established a clear connection between the costs incurred and the business run by the sole trader.

All this means that if a VAT registered business, of whatever description, incurs expenses, including legal fees, that are covered by insurance the business is able to recover the VAT on those legal fees. The insurer will normally only pay out the VAT exclusive amount in such circumstances. It is therefore important to establish at the time a claim is made whether the VAT on the costs may be recovered.

Ultimately the recovery of VAT on legal and other costs associated with a car crash depends on whether those costs are legitimate business expenses.

Unfortunately I have to fall back on the age old comment that the outcome will depend on the facts of each individual case.

Car Accident Aid is most grateful to Robert for his most helpful advice.  Robert has a wealth of knowledge on how to manage VAT.  You can meet him at 4Networking meetings in Crawley where he is the Group Leader and at various other 4Networking Events where he is the 4Sight speaker- on VAT of course!

For more of Robert’s words of wisdom, view his VATark website


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Categories : Fleet matters, Guest blogs, Uninsured Loss Recovery

Rehabilitation – A chiropractor’s view

20 01 2010

Scott Gilchrist of The Back Place  in Tunbridge Wells explains the role of chiropractic treatment following an RTA.

Chiropractors are known for treating health problems relating to muscles, joints and nerves – the so called neuro-muscular-skeletal aspect of pain and dysfunction.

The main types of problem treated by chiropractors are lower back pain, neck pain, shoulder pain and headaches. Many of these problems can affect a person’s ability to sleep, work and perform activities of daily living and thus can have a huge impact on overall health and wellbeing.

After taking a thorough history and undertaking an extensive physical examination of a patient’s problem the chiropractor will provide an explanation of the problem and what progress can be reasonably expected. Chiropractors use a technique called spinal manipulation to restore function to problem areas and this may be augmented with other techniques and exercise advice. Treatment is tailored specifically to an individual’s complaint.

The term “whiplash” is used convey what happens to the body during a road traffic accident. Large and sudden forces are transmitted through and dissipated by the body’s tissues within a fraction of a second. This shock wave results in the “whiplash” injury which may then manifest as any combination of the symptoms outlined below:

neck pain, headaches, jaw pain,lower back pain, dizziness,  vision problems.

The symptoms may start immediately, several hours, days or weeks after the accident and this should be borne in mind. Many tissues and structures in the neck can be injured in whiplash.

It is very helpful for a chiropractor to have as much information about a collision as possible

This will include:-

Was the collision head on or from the side?

The speed and size of impacting vehicle,

Was the patient looking straight forward or was the head turned?

Any awareness that the collision was due to happen?

Were the head restraints in position correctly?

Were seat belts being worn?

There are two distinct phases to treatment – the first is managing the acute phase of pain and dysfunction and then ensuring that the body’s repair and recovery phase occurs optimally. Those that have been involved in collisions must bear in mind that if tissue around the spine has been injured then this takes at least 12 weeks to repair. Indeed this may explain why some symptoms persist for many months following an accident.

The best course of action following a collision is to document some of the information detailed above and keep a pain diary of when and how badly symptoms start to appear. This will be useful when seeing a primary health care practitioner if suffering from a whiplash injury.

Car Accident Advice is most grateful to Scott for his insight.  We cannot give medical advice and Claimants should always speak to their GPs as to the best course of treatment.


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Categories : Guest blogs, Personal Injury, Rear end shunts, Whiplash

Loss of value in a vehicle – Diminution

2 02 2009

Guest blogger - Stewart Fairhurst – discusses how a vehicle perfectly repaired may not be worth as much as it was before the accident.

My company is a specialist in diminution claims, or otherwise known as the loss in value of a motor vehicle after it has been involved in a motor accident and then repaired.

How does Diminution Work?

Your vehicle may have lost value by the mere fact that it has been involved in a motor accident.

This is even the case where the repair to it was of a very high standard.

It all boils down to a psychological prejudice applicable to vehicles that have been involved in motor accidents.

EXAMPLE

You are looking to replace your car. Two identical vehicles are offered for sale. One has been previously damaged in a motor accident and then repaired. Would you pay the same price for the accident damaged vehicle?

OR

Would you expect the price to be reduced?

For more information, please do not hesitate to contact us through our website

www.clifford-james.com


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Categories : Diminution, Guest blogs, Uninsured Loss Recovery


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