Communicating in Litigation Services: Reports, Practice Aid 96-3

• Introduction
• Scope of This Practice Aid
• Summary of Authoritative and Nonauthoritative Guidance
• Communication With the Client in Litigation Services
• Communication Forms in Litigation Services
• General Considerations for Written Communications
  • Limiting the Use of Documents
  • Indicating Document Status
  • Maintaining Confidentiality of Documents
  • Using Documents in Settlement Discussions
  • Distributing Expert Witness Reports
• The Federal Rules of Civil Procedure and Written Reports by Experts
• Elements of an Expert's Written Report
• Summary
• Appendix A-Sample Written Report for a Defendant in a Wrongful Termination Case
  • Exhibit A-1 - Bill White v. Classic Sand & Gravel Co., Inc. - Economic Loss Alleged by Plaintiff
  • Exhibit A-2 - Bill White v. Classic Sand & Gravel Co., Inc. - Adjusted Economic Loss
  • Exhibit A-3 - Curriculum Vitae - P.F. Jones
• Appendix B-Sample Written Report on Damages for a Plaintiff in a Federal Court
  • Exhibit B-1 - Computer Model of Lost Profits of Auto Truck Plaza, Inc
  • Exhibit B-2 - Curriculum Vitae-J.W. Smith
• Appendix C - Sample Written Report Not Subject to the Federal Rules of Civil Procedure

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INTRODUCTION

.01 Litigation and dispute resolution services are rendered by a CPA using accounting and consulting skills to assist a client in a matter that involves a pending or potential formal legal or regulatory proceeding before a "trier of factâ€? (for example, a judge, jury, arbitrator, mediator, or special master) in connection with the resolution of a dispute between two or more parties.¹ Litigation services may be provided by a CPA acting as a consultant only, usually to an attorney, or as an expert witness.² The services provided may include fact-finding (such as assistance in the discovery and analysis of data), damage calculations, document management, preparation of demonstrative evidence, expert testimony, and other professional services. Litigation services also include services associated with bankruptcy, reorganization, insolvency, and fraud investigations, among many other services.

.02 Litigation services are classified as transaction services in the Statement on Standards for Consulting Services (SSCS) No. 1,³ and are subject to the SSCS, as well as to the professional standards embodied in the AICPA Code of Professional Conduct. The communication standards promulgated by the AICPA that apply to litigation services are limited to the general requirement of communication with client in SSCS No. 1. The SSCS states:

Communication with client. Inform the client of (a) conflicts of interest that may occur pursuant to interpretations of rule 102 of the Code of Professional Conduct,⁴ (b) significant reservations concerning the scope or benefits of the engagement, and (c) significant engagement findings or events.

.03 The communication requirement in the SSCS No. 1 is relatively broad and does not provide specific guidance to the CPA for satisfying this requirement. Practitioners may communicate concerns about conflicts of interest, serious reservations, or significant engagement findings and events to the client either orally or in writing. This practice aid identifies several typical oral and written communication forms used by practitioners, but its primary emphasis is on the written expert report signed by the CPA.

¹ See the definition of litigation services in the Interpretation of Statement on Standards for Attestation Engagements, "Attestation Standards: Attestation Engagements Interpretations of Section 100â€? (AICPA, Codification of Statements on Standards for Attestation Engagements, AT sec. 9100.48).

² The practice discipline of litigation services includes actual and potential disputes that may or may not proceed to formal litigation. Throughout this practice aid the term litigation services includes litigation and dispute resolution services, unless otherwise indicated.

³ SSCS No. 1, effective January 1, 1992, states that litigation services as part of the full definition of consulting services are subject to the following standards: professional competence, due professional care, planning and supervision, sufficient relevant data, client interest, understanding with client, and communication with client. See SSCS No. 1 (AICPA, Professional Standards, CS sections 100.06 and 100.07) for further explanation.

⁴ Educational information on the topic of conflicts of interest is contained in Consulting Services Special Report 93-2, Conflicts of Interest in Litigation Services Engagements (New York: AICPA, 1993).

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