We can all understand that the sharing or sale of an asset can be a complex process, especially when this isn’t done in the most amicable of situations. In order to make sure the process is as fair and unbiased as possible, an independent expert who is usually within the accountancy sector, who doesn’t serve or is responsible for either party is called upon. This is called an independent expert’s report (IER) and is required for many transactional occurrences.
If a transaction of assets requires to go to court or arbitration, then an expert witness is needed to provide evidence that the transaction is fair and reasonable. Before legal proceedings begin in court however, it is mandatory for that expert to product an ‘expert report’ outlining all relevant details of finances and assets.
We break down exactly what an Independent Expert’s Report (IER) is, the situations where it is common to require one, and how Nordens can help lawyers or solicitors in producing them.
What Is An Independent Expert’s Report (IER) & Who Needs Them?
An IER sets out the impartial opinion of the expert in relation to the matters that they have been instructed on by the respective legal representative. The purpose of the report is to basically inform the court on matters outside its expertise, and on those which it has to reach a decision in order to resolve the dispute at hand.
As well as the court’s use, the report will also inform the instructing party and its legal representatives on such technical matters which enable them to determine the strength of their legal case. The report acts as a statement of facts and assumptions based on the expert’s analysis of the respective transactional situation, in compliance with the legal requirements. The report is to be laid out in an uncomplicated, clear and concise format without the use of technical jargon.
If for whatever reason the legal representative disagrees with any part of the report, it is imperatives that this is to be made known to the expert as earliest as possible stage. This is so that the expert can carefully consider the stipulations brought forward and decide on the appropriate action taken to address these. It’s worth noting however that the opinion expressed by the expert must be an independent and impartial professional opinion irrespective of whether it supports or harms the instructor’s case. Whilst the instructor or legal representative pays the expert’s fees for the report, this does not override the duties to the court which is dominant over any instructor.
An IER is very common in divorce settlements, company takeovers, compulsory acquisitions, buyouts, demutilisations and other forms of transactions which require an impartial, unbiased expert to verify financial information in a legal setting.
How To Obtain An Independent Expert’s Report (IER)?
The court or arbitrator will determine whether or not an IER is required, from which point the instructor or legal representative will contact an impartial expert to proceed with the matter in question. It’s imperative that the expert and legal representative don’t have a prior relationship and that the expert has no prior relationship with any of the parties mentioned. Should the unlikely event occur that one of the parties requires the expert’s support in a different, unconnected matter (for example bookkeeping or payroll services for their business), this is not to be carried out whilst the case or court proceedings are still active as this will be deemed a conflict of interest.
Fortunately, at Nordens we carry out Independent Expert’s Reports (IERs) on a regular basis and are comfortable completing these no matter the complexities, timescale and delicacy of the situation involved. Our high quality, impartial service provides a thorough and detailed report of transactional and financial affairs which will then be used by the instructor or legal representative during the court or arbitration proceedings. Please get in touch with our Tax Manager, Adam Truluck, if you require an IER and he’ll be happy dealing with your request.
We hope this has outlined to you what an Independent Expert’s Report (IER) is, what it involves and why they’re needed. If you require any further information on any specialist services related to legal proceedings, or anything accounting related for that matter, please don’t hesitate to get in contact with us at Nordens where one of our trusted advisors would be happy talking you through your query.