The Significance of Forensic Accountants in Personal Injury Litigation
This a great guest post from Grant Webb who is a writer and learning facilitator at Bisk Education. Please go to his website to learn more about his service.
How Personal Injury Attorneys Utilize Forensic Accountants to Uncover Assets That At-fault Parties Have Tried to Hide as a Result of Pending Lawsuits
If someone is seriously injured through the negligence of another, they have the right to be compensated for their injuries. Unfortunately, sometimes the at-fault party, or defendant, goes to great lengths to conceal his or her assets in order to keep those assets from being awarded to the victim. In many cases, the victim, or claimant, knows the defendant and may be acquainted with them well enough to know that they have a substantial net worth. The claimant and defendant may also know each other enough for it to be a known fact that the defendant is not above trying to hide their property and possessions, particularly if they have the connections to hide them.
There have been several high-profile cases in which the defendant has taken dramatic steps to hide assets from the law, including a case in Florida where a 48-year-old millionaire was charged with drunk driving and causing an accident that resulted in the death of a man. The defendant subsequently adopted his 42-year-old girlfriend during ongoing criminal and civil proceedings against him in order to protect his assets. There’s also the case of another man accused of drunk driving and reckless homicide in an accident that killed a 43-year-old woman. The defendant was released with a modest bond deposit of $2,500 based on his reported $12,000 annual income. In reality, he owned property worth over $1 million at the time of the accident, which he and his wife liquidated after he was charged.
In cases like these, a skilled personal injury attorney is often the difference between defendants getting away with financial shenanigans and victims and their families being fairly compensated for their injuries. A personal injury attorney has the skills and resources to investigate and locate hidden assets in order to obtain the most equitable compensation possible for their client.
However, in many cases, it makes sense to bring in a specialist. A forensic accountant, also known as a forensic auditor or investigative auditor, is an expert in business and personal finance. Forensic accountants also understand financial reports and the systems used to track and trace a person’s financial records and transactions. Because of their high level of expertise in using financial data and tools to uncover hidden assets, forensic accountants are often a personal injury attorney’s best resource to use to gain a favorable outcome for their client. Typically these professionals have two separate sets of knowledge. The first coming as a result of passing the uniform CPA Exam and the second coming by obtaining the Certified Forensic Accounting license. As it pertains to functioning alongside a personal injury attorney, forensic accountants may provide both litigation support and investigative accounting.
It’s not uncommon for personal injury attorneys to have forensic accountants on staff, particularly attorneys who handle a high volume of cases, or cases with large potential compensatory values. Other attorneys may hire forensic accountants on a case-by-case basis as consultants, especially when they encounter cases with complex financial situations. By using forensic accountants to “follow the money”, personal injury attorneys can provide their clients with the best chance possible to receive equitable compensation.
Grant Webb, writer and learning facilitator at Bisk Education, works with countless CPA's and forensic accountants and finds that becoming a CPA or forensic accountant is a great way to provide fulfilling results for clients who have been injured as a result of the negligence of others.