Luke Steadman is a partner in Alvarez & Marsal’s disputes and investigations practice, where he specialises in providing accounting expert evidence for international arbitration and domestic litigation. He has over 25 years’ experience as a forensic accounting expert witness across Europe, Asia and the United States. He has acted as both party-appointed and tribunal-appointed expert on numerous matters and been cross-examined on more than 30 occasions in hearings under ICC, LCIA, Hong Kong, Dubai and other Arbitration Rules.

Describe your career to date.

I trained as a chartered accountant with a UK audit firm before switching, in 1994, to what was then the nascent discipline now known as forensic accounting (back then we called it “litigation support”). I have practised it exclusively since. My early career was mainly focused on accounting investigations, which took me all over the world, and in explaining complex transactions and money flows to courts and juries in the UK and internationally. My focus now tends to be on expert witness matters, principally considerations of quantum of damages and valuation, as well as accounting issues and concepts. I provide expert evidence in both arbitration and litigation proceedings.

What do clients look for when selecting an expert witness?

Expertise and experience. Expertise, because someone who is not an expert in their field will generally be a bad choice and will come unstuck in cross-examination; experience because of the unique way in which expertise is challenged in adversarial arbitration or litigation proceedings. The work of an expert is, in practice, part “journey” and part “translation” as regardless of what we find, however complex or esoteric, it has to be communicated succinctly and clearly in legal proceedings for it to be of use.

What differences do you notice when providing evidence in litigation compared to arbitration proceedings?

From an expert’s perspective, there is little difference, perhaps only in the procedures used by each. As forensic accountants, we are fortunate to have a common rulebook which means that we can act on disputes in practically any jurisdiction. The effectiveness of any hearing depends on the participation and preparation of counsel and those charged with arriving at a judgment or award, while concurrent evidence (expert “hot-tubbing”) is no longer only to be found in arbitration. As experts, we hold ourselves to the same standards in both arbitration and litigation. I enjoy giving evidence in any forum, while being challenged on my views by some of the best advocates and arbitrators.

What trends are you seeing emerging in the types of disputes currently going to arbitration?

Geographical – with arbitration the choice of many parties, so many disputes, whether resolved virtually or in hearings in any of the arbitration cities, now involve companies from far-flung jurisdictions which always makes things interesting for an expert.

How would you like to develop your practice in the next five years?

It should be about training the next generation of experts. We have a strong and ambitious team at A&M who I work with on a day-to-day basis. I have enjoyed being part of the faculty of an arbitration provider assisting both new counsel and new experts with cross-examination training.

What advice would you offer to new forensic accountants?

I always meet with new forensic accountant trainees at our firm in the first week or so of their careers and offer them three pieces of advice that have served me well over the past 20-plus years in disputes. First, start with the cross-examination and work backwards into the report. Focusing on the unique way in which our work is scrutinised and challenged allows us to present that information in a clear, objective and unemotive way. Second, realise that what makes a good report and strong evidence is the ability to communicate complex issues in a clear, precise and uncompromised manner. There is a different skill to be mastered between understanding and communicating, and only the latter is useful to clients and tribunals. Third, an application of Occam’s razor is often the most helpful tool available to a forensic accountant. Among competing hypotheses, the one with the fewest assumptions is often to be preferred.