July/August 2006

Whether dealing with a claim resulting from a defective part provided by a manufacturer or faulty wiring installed by a sub-contractor, it is important to have a forensic accountant involved when a subrogation matter arises. Often, months or years after the incident, a claim will be filed when one business feels there is actionable liability by a third party.

“Forensic accountants can work with both insurers and attorneys on a subrogation claim,” said Neal Cason, partner in Matson, Driscoll & Damico’s Atlanta office. “Following the settlement of the first party property case, attorneys frequently just need a fresh set of experienced eyes to provide them with an objective assessment of the total damages - regardless of insurance coverage.”

A forensic accounting team will provide the depth of experience necessary to investigate the facts and report findings in a concise manner. First, the team will assess the situation, including accounting records, valuation of inventory, loss of profits and other financial losses. By performing this assessment, the forensic accountants can provide a comprehensive report and documentation for the legal process.

“A forensic expert can help counsel in the discovery process by supplying recommendations for interrogations, requests for documents and deposition questions for financial witnesses,” said Cason. “MD&D’s forensic accountants have considerable litigation experience in various subrogation matters.”

In the unlikely event that a subrogation case goes to trial, the investigative professionals may also provide trial graphics, rebuttals and surrebuttals in response to expert reports offered by opposing consultants and potential witnesses. Additionally, a forensic accountant will often be retained as an expert or consulting witness and will provide the courts with summary calculations, charts and graphs in straightforward terms that can be understood during deliberations.

“MD&D’s expert reports and testimony withstand the scrutiny of voir dire and cross examination,” said Cason.

Subrogation cases are not a regular occurrence, but when an insurance company or attorney finds itself in a subrogation situation,it is in the best interest of all parties involved to hire a forensic accounting team. These types of issues can arise in every industry, from retail to manufacturing, and will often take several years to resolve.

“It requires a diligent and accurate assessment of damages and ability to understand diverse industries and situations quickly,” said Cason. “Forensic professionals have the knowledge, experience and credentials to manage these complex situations and necessary information.”