The role of the complaint in commercial litigation is to establish a framework for the litigation to follow. The initial allegations of damages, the nature of those damages, and the basis for the claims are critical, as are the key documents for the scope, direction, and success of the litigation. However, some attorneys may face the challenge of filing complaints before they have all the necessary information. Likewise, amending complaints may complicate the litigation process, extend the case, and generate sources of avoidable complications and opposition.
Effective complaints in commercial litigation with economic damages should address specific details about the type, scope, and elements of the damages. The most powerful approach is to identify specific financial transactions, including supporting the claim with data and documents that provide evidence of damages. There are several approaches, strategies, or content that can be included in a complaint to effectively present damage arguments, streamline litigation (especially discovery), and set the stage for testimony and expert analysis/opinions.
Categories or Nature of Financial Damages
Financial damages are often presented and categorized in several ways that are easily recognized and understood by the court. Lost profits claims occur due to physical damage to a business by virtue of another party’s negligence (fire or truck vs. warehouse collisions or those due to theft or misuse of technical or intellectual property). Employee defalcation claims need different preparation and details. Claims related to a merger or acquisition, with allegations of violations of the representations and warranties included in the agreements, still present a different set of issues to be addressed.
- Lost Profits: Forensic accountants can calculate lost profits by comparing a company’s actual performance with its expected performance had the alleged harm not occurred. This requires a thorough understanding of the company’s operations, market conditions, and other key factors that influence performance. Consultation in advance of filing the complaint can provide specifics for the allegations, especially when the unknowns exceed the knowns. This often occurs when your client has been damaged, but the extent of the damage is unknown or not yet determined.
- Business Valuation: In cases where a business’s value has been impacted, forensic accountants can perform business valuations to determine the extent of the financial loss. This involves assessing the company’s assets, liabilities, and future earning potential. More specific details in a complaint can provide a better route to later discovery.
- Cost Analysis: Forensic accountants can also conduct cost analyses to identify any additional expenses incurred due to the alleged harm, such as legal fees, remediation costs, or increased operational expenses.
- Fraud: Fraud can occur within any category of financial damages, adding another dimension to identifying the damages. A complaint may include statements about nefarious and/or intentional schemes that exacerbate the damages, including identification of the specific financial transactions that a trier of fact could determine are “fraudulent.” If counsel is alleging fraud, an experienced forensic accountant can assist in identifying transactions that could be considered “fraudulent” and methods for concealing those transactions.
Identifying and Capturing Financial Damages
It is often difficult to quantify the extent or sources of financial damages in the initial complaint. When that is the case, the alternative is to present the greatest level of detail of specific events and the resulting scope of any potential financial damage.
Every industry and business entity has unique financial transactions and available data as a source of evidence for financial damages. Effective complaints identify the appropriate financial data to be used in the damage assessment, allowing for company-specific and industry data to be incorporated into the analysis of economic damages specific to the plaintiff. Missing the latter expectation regarding industry-specific financial data can undermine outcomes.
Effective complaints require knowledge about unique financial transactions in the industry and business entity to present evidence of damages. This requires knowledge of the plaintiff’s industry, including operations, data systems, and financial transactions. It’s crucial to understand financial transactions that may be unique to that industry, including the records that exist and the way financial information is captured, processed, stored, and reported.
Consultation
The detail and insight that differentiate effective complaints from those with vague details and damage allegations can be provided by forensic accountants in the initial stages of litigation. This is particularly true for forensic accountants who have specific industry and litigation experience.
This initial consultation can include recommendations for next steps, particularly discovery requests, but also expert analysis as the case proceeds. The forensic accountant can be engaged as a consulting expert during the process of preparing the complaint. The forensic accountant can remain a consulting expert, advising a testifying expert for reports and testimony, or transition to a testifying expert (counsel should be cognizant of discovery issues for both scenarios).
Consultation with a forensic accountant at the onset of a case can provide insight into the available financial data and unique circumstances specific to certain industries, enabling the construction of an effective complaint and case in the future. A well-crafted complaint can simplify and streamline discovery, expert analysis, and opinion, ultimately leading to a favorable outcome for your client.
- Journal of Legal Analytics. (2018). Data Analytics in Legal Contexts.
- Society of Forensic Accountants. (2021). Best Practices in Forensic Accounting for Legal Professionals.
- Healthcare Financial Management Association. (2019). Forensic Accounting in Healthcare Litigation.
Reprinted with permission from the October 27, 2025 edition of the “The Legal Intelligencer” © 2025 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or [email protected].
© Copyright CBIZ, Inc. All rights reserved. Use of the material contained herein without the express written consent of the firms is prohibited by law. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein. Material contained in this publication is informational and promotional in nature and not intended to be specific financial, tax or consulting advice. Readers are advised to seek professional consultation regarding circumstances affecting their organization.
“CBIZ” is the brand name under which CBIZ CPAs P.C. and CBIZ, Inc. and its subsidiaries, including CBIZ Advisors, LLC, provide professional services. CBIZ CPAs P.C. and CBIZ, Inc. (and its subsidiaries) practice as an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable law, regulations, and professional standards. CBIZ CPAs P.C. is a licensed independent CPA firm that provides attest services to its clients. CBIZ, Inc. and its subsidiary entities provide tax, advisory, and consulting services to their clients. CBIZ, Inc. and its subsidiary entities are not licensed CPA firms and, therefore, cannot provide attest services.
