How loss of profits support works
A NIFA member can review financial records, historic performance, budgets, forecasts, market information and the assumptions behind the claimed loss. The expert can then prepare an independent calculation that explains causation, methodology, limitations and alternative scenarios where appropriate. Loss of profit calculations are rarely straightforward, so the work often involves identifying and considering the key variables that impact the claimed loss. Support may include early assessment of the strengths and weaknesses of a potential claim, consideration of the likelihood of any counterclaim, advisory input during negotiations or preparation of an expert report on quantum for use in court proceedings.
Who loss of profits expertise is for
Loss of profits support is for solicitors, insurers, businesses, claimants, defendants and advisers who need independent evidence on the financial consequences of a dispute, breach, interruption or alleged wrongdoing. NIFA members are experienced in acting for both claimants and defendants across a wide range of businesses and industries. They may be instructed in either an advisory or expert capacity, usually through advising solicitors as part of the dispute process but sometimes directly by the end client to provide initial advice and assistance during the early stages of a claim.
When loss of profits expertise can help
NIFA members are experienced in assessing and quantifying a consequential loss of profits, offering support with:
- Commercial disputes involving alleged lost sales or reduced turnover.
- Business interruption, contract disputes and breach of warranty claims.
- Assessment of gross profit, contribution, avoided costs and mitigation.
- Shareholder, partner, client or supplier disputes where a contentious event has affected trading performance.
- Professional negligence, personal injury, fatal accident and other financial loss claims involving loss of earnings or profits.
- Challenges to the assumptions behind a claimed loss.
Loss of profits process and outcomes
The process usually starts by identifying the period of loss, the counterfactual position and the financial information available. The forensic accountant then reviews performance data, analyses margins, considers relevant variables and prepares a calculation that distinguishes supported losses from unsupported assumptions. This may include assessing lost turnover, gross profit, contribution, avoided costs, mitigation, trading capacity, market conditions and the likelihood or value of any counterclaim. NIFA members can assist at any stage of the dispute life cycle, from initial claim assessment through to preparation of expert evidence for court proceedings. The outcome is a clearer, evidence-based view of quantum that can support advice, negotiation, settlement or proceedings.
Why choose a NIFA member loss of profits matters?
NIFA brings together independent forensic accountants who understand commercial loss, litigation support and expert witness duties. Legal professionals can use NIFA to identify a suitably experienced specialist, while members benefit from shared resources, training, referral opportunities and annual quality review. NIFA members work with clients and legal advisers to provide robust, fit-for-purpose and cost-effective advice, while remaining objective and independent throughout the dispute process. Where necessary, they can also help manage expectations, so the client has a realistic view of the claim, the evidence and the likely scope of any loss calculation.
To find a forensic accountant with the loss of profits expertise your matter requires…
FAQs
Without independent analysis, a claim may rely on assumptions that do not reflect historic performance, market conditions, avoided costs, mitigation, trading capacity or the potential for a counterclaim.
Contact NIFA with the nature of the dispute, the period of loss and the financial records available so a suitable loss of profits expert can be identified.
Our recent loss of profits work
NIFA members regularly support loss of profits matters involving commercial disputes, contractual disputes, business interruption, professional negligence and disputed financial performance.
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Long-serving NIFA member, Peter Smith, reflects on institute’s value
Read case studyAs one of the longest-serving members of NIFA, Peter Smith is well-positioned to reflect on the value of the institute and the benefits it brings to members and legal professionals. Having worked for a major law firm for a while, Peter set up his own practice and has worked diligently to make it a success […]
