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Why Bringing Your Financial Expert to Mediation Is a Game Changer

By: Richard Wolf

The vast majority of cases settle before ever going to trial. In many instances, they are settled through mediation. Having your financial expert at mediation, whether it’s for a divorce matter, damages claim, or any claim dealing with a complex financial matter, can be a game changer.

A financial expert can serve many different roles during a mediation. Here are five things your financial expert can do to contribute to the success of your next mediation.

1. Run the Numbers

Your financial expert can “run the numbers” during the mediation in real time. Wondering what the impact would be to your client if they agreed to one settlement amount versus another? While you are discussing strategy with your client or conversing with the mediator, wouldn’t it be great to have a knowledgeable financial professional running the numbers to give you different scenarios?

When we attend mediations for divorce cases, we update the marital property spreadsheets, analysis of alimony and child support, and other financial reports throughout the day based on information obtained during the mediation. This can expedite the resolution process and ensure that your client doesn’t agree to something before seeing a final analysis.

2. Educate On Complex Financial Matters

A financial expert is often in the best position to present the financial facts to the mediator, particularly if they need to be educated on certain matters. For example, depending on the type of work we performed, we might explain to the mediator why our valuation methodology and conclusions are correct, or the time value of money and the impact on cash flow, or the tax ramifications of a settlement offer.

At a recent mediation trying to settle an injury claim as a result of a trucking accident, I analyzed the company’s assets and was able to educate the mediator on the available assets that could be used by the company to pay out a claim above their insurance coverage. The mediator was then able to take this information to the opposing side to try to obtain a resolution.

3. Assess the Tax Ramifications

Financial experts who are CPAs are uniquely qualified to assess the tax ramifications of decisions and explain complex tax issues. For example, in a divorce case, a CPA financial expert can assess the tax impact of various scenarios in real time at mediation. Will the marital home generate a taxable gain to either party? What about the impact of a couple’s income tax filing status?

A financial expert can quickly answer these questions and can provide insight for you, your client, the mediator, and the opposition, as necessary.

4. Provide Additional Insight

In many mediation settings, things can get emotionally charged. While you are focused on client advocacy or are dealing with procedural issues related to the case, a financial expert can play a different role. Frequently clients will look to the financial expert to give them unemotional opinions and advice.

I have been involved in many mediations where the client seeks my advice regarding a potential settlement. As the “numbers guy,” they sometimes see me as more impartial than their attorney. In other mediations, the attorney might look to me to help their client get past an emotional hurdle.

5. Exercise Professional Skepticism

As CPAs, our standards require that we exercise due professional care, which includes professional skepticism. This professional skepticism can be helpful during a mediation. Clients sometimes just want the process to be over. They may have been at the mediation all day and maybe the matter has been dragging on for months or even years. Towards the end of the day, the opposing side might offer something new that seems like a good deal.

A financial expert can provide the appropriate level of skepticism to ensure that your client is getting the best result.

What to Expect When You Bring Your Financial Expert to Mediation

It is important that you inform the mediator and opposing counsel that you are bringing your expert to the mediation. Not doing so might cause the opposing side to end the mediation prematurely.

If the other side is also bringing their financial expert, the mediator may suggest that the experts meet separately to discuss the matter. In these cases, you, as the attorney, should meet with your financial expert prior to the mediation to set clear guidelines so they have an understanding of your client’s expectations.

Having the right expert with you at mediation can be the difference between reaching a settlement or leaving mediation without a deal. A seasoned financial expert can help bolster your case and be a significant asset to both you and your client.

Need Help?

Our litigation support professionals help attorneys form solid financial strategies for their clients. Contact us online or call 800.899.4623 for help.

Published June 24, 2019

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