The pandemic has impacted on every aspect of life, from health and education to the economy and travel.
It has also taken a heavy toll on relationships – both personal and business. With this in mind, a news item caught my eye the other day. A man wanted by police reportedly gave himself up because he preferred prison to spending more time in lockdown in the company of the people he lived with.
Previously, a poll in the autumn found one in 12 people had fallen out with a friend or relative because of disagreements about their actions amid Covid restrictions. More than half of those questioned said they had felt angry with people they knew because of their behaviour.
The strain being felt by the public is clearly telling, and the knock-on effects are now being reflected in an increasing workload for our team. We have seen a significant increase in matters involving marital breakdowns and business partnership and shareholder disputes across the country.
Financial worries, the pressures of lockdown and fall-outs among couples and business partners have contributed to an increase in the volume of litigation and the number of claims we are acting upon. Speaking to solicitors with whom we deal on a regular basis bears this out – they are telling us that their workloads involving civil disputes, family disputes and business disputes are definitely rising.
In matrimonial disputes, we can be appointed by one side or on a joint basis as the forensic expert when there is a dispute about how to divide the couple’s assets. If one of the parties owns a company, a valuation of its shares needs to be carried out with a view to helping the couple settle their divorce, as a percentage of the assets will be handed over to the other spouse as part of any settlement. In some cases, it appears that one of the couple has been considering a divorce for a while, and the pandemic has accelerated their desire to bring the marriage to an end.
It works both ways – some have chosen to split because their business is now worth less, and therefore they will have to pay out less in the settlement. Conversely, there have been cases where one party has realised their spouse’s business has been successful during this period, the value of the shares will have risen, and they will receive more money in the settlement.
Business partnership and shareholder disputes have also become more commonplace during the pandemic. In normal times, when businesses are trading well and are profitable, partners or shareholders are less likely to rock the boat if one is failing to pull their weight, or perhaps is taking out more money than the other. It is when things go wrong, however, that these issues come to the fore and prompt action.
We are increasingly being called upon to provide forensic accounting expertise when there has been a fall-out and one of the partners or shareholders has been thrown out of the business and is making a claim against the others for the value of their shares, or wants to be bought out. These cases have arisen in circumstances where one partner or shareholder has felt aggrieved by others’ actions (or inactions) as the business struggles to stay afloat. Others have endured severe financial pressure amid poor trading conditions, and have finally felt forced to take action.
We’ve seen cases where one partner or shareholder has changed the locks to keep the other out of the premises, or has withdrawn their access to emails. This has led to litigation, and hence our involvement in these matters. Our team has also been called upon to provide expert forensic assessments in supply chain disputes, where a supplier has breached the terms of their contract due to pandemic issues, and their customer has lost profit. While cases such as the fed-up fugitive make headlines, there is a lot going on beneath the radar to indicate that the repercussions of the pandemic will be felt for some considerable time to come.
For more information about the forensic accounting services Inquesta can provide, and how we can assist with your personal disputes and business disputes, contact a member of our team today.
