When we imagine a courtroom, we picture witnesses, robed lawyers, and piles of documents. But in a growing number of lawsuits, the decisive testimony is not a person: it's a number.
How much did a company lose in revenue when a contract was breached? What was a business worth on the day a marriage ended? Where did the money that vanished in a cryptocurrency scam go? Answering these questions with enough solidity to hold up before a judge is, in essence, the job of forensic economics.
It's important to clear up a misconception from the outset. Forensic economics is not ordinary accounting or tax advisory. It is investigation for evidentiary purposes: it takes the tools of economics, accounting, and finance and puts them at the service of a very specific objective, reconstructing what happened and quantifying it using a method that can withstand scrutiny from the judge, the arbitrator, and—above all—the opposing party's expert. The difference is significant. An accounting entry explains a transaction; an expert report must be able to defend every figure before someone who has every incentive to dismantle it.
Every economic investigation begins the same way: with a clear question and a jumble of documents that, at first glance, say nothing. Annual accounts, contracts, bank statements, emails, spreadsheets, sometimes the public record of a blockchain. The job is to organize this material, formulate a hypothesis, test it against the data, and discard what is not supported. What distinguishes a good report from a mere opinion is traceability: every conclusion must be traceable back to the data supporting it, and every method must be backed by case law or accepted professional practice.
If a figure cannot be justified, it does not go into the report.
Where does all this come into play? First, in the courts. In civil and family law, to calculate lost profits from an accident or to value a company that is part of the marital estate. In commercial law, when two partners fight over the value of their stake or when a company sues for unfair competition. And in economic criminal law, where the report often serves to quantify the damage from fraud, mismanagement, or embezzlement: putting an exact figure on the harm is often what allows the prosecution to proceed.
In all these cases, the expert's report is considered evidence and can be decisive for the outcome of the proceedings.
But courts are no longer the only arena. Increasingly, business disputes are resolved through arbitration, a faster, more confidential, and more specialized route than litigation. Here, the economic expert plays a central role: they translate a breach of contract into a specific compensation, value a concession or a brand, and put numbers to what the parties discuss in abstract terms. In international arbitration, where different jurisdictions and laws converge, this work requires even greater methodological care, as the arbitral tribunal will have to compare reports prepared under very diverse criteria.
Some examples help to illustrate. The calculation of lost profits—the profit someone has failed to earn due to an external event—seems simple, but it requires constructing a credible hypothetical scenario: what would have happened if the damage had not occurred. Company valuation can be done by discounted cash flow, market multiples, or adjusted net asset value, and choosing the appropriate method for the case is already half the job.
And in the newer field, tracking assets on a *blockchain* allows following the money's path on a public and immutable ledger, even when the scammer thought they had erased the trail. Just because a cryptocurrency scam seems like a lost cause doesn't mean it is: often the information is there, you just need to know how to read it.
And here lies the less technical, and perhaps more important, part of the profession: independence.
An expert's value is not in telling the client what they want to hear, but in offering a defensible truth. An inflated report deflates at the first question from the opposing party, and when that happens, it harms precisely the person who commissioned it.
Therefore, a good report combines two things that don't always go together: technical rigor and clarity. It must be solid enough to convince another economist and clear enough for a judge who is not an economist to understand. A report that no one understands convinces no one.
All of this paints a picture of a discreet figure, but one increasingly present in proceedings with an economic component.
Any of us could find ourselves, without seeking it, in a dispute where the truth is not a matter of words but of numbers: a commercial dispute, a patent issue, a mis-sold banking product, a digital fraud. Knowing that this work exists—and that a well-founded figure can decide a lawsuit—is already a first step towards defending oneself.
Because numbers, contrary to the cliché, do not speak for themselves. They do not lie, but they also do not declare on their own initiative. Someone must know how to read them, organize them, and, if necessary, make them declare before the tribunal.
How much did a company lose in revenue when a contract was breached? What was a business worth on the day a marriage ended? Where did the money that vanished in a cryptocurrency scam go? Answering these questions with enough solidity to hold up before a judge is, in essence, the job of forensic economics.
It's important to clear up a misconception from the outset. Forensic economics is not ordinary accounting or tax advisory. It is investigation for evidentiary purposes: it takes the tools of economics, accounting, and finance and puts them at the service of a very specific objective, reconstructing what happened and quantifying it using a method that can withstand scrutiny from the judge, the arbitrator, and—above all—the opposing party's expert. The difference is significant. An accounting entry explains a transaction; an expert report must be able to defend every figure before someone who has every incentive to dismantle it.
Every economic investigation begins the same way: with a clear question and a jumble of documents that, at first glance, say nothing. Annual accounts, contracts, bank statements, emails, spreadsheets, sometimes the public record of a blockchain. The job is to organize this material, formulate a hypothesis, test it against the data, and discard what is not supported. What distinguishes a good report from a mere opinion is traceability: every conclusion must be traceable back to the data supporting it, and every method must be backed by case law or accepted professional practice.
If a figure cannot be justified, it does not go into the report.
Where does all this come into play? First, in the courts. In civil and family law, to calculate lost profits from an accident or to value a company that is part of the marital estate. In commercial law, when two partners fight over the value of their stake or when a company sues for unfair competition. And in economic criminal law, where the report often serves to quantify the damage from fraud, mismanagement, or embezzlement: putting an exact figure on the harm is often what allows the prosecution to proceed.
In all these cases, the expert's report is considered evidence and can be decisive for the outcome of the proceedings.
But courts are no longer the only arena. Increasingly, business disputes are resolved through arbitration, a faster, more confidential, and more specialized route than litigation. Here, the economic expert plays a central role: they translate a breach of contract into a specific compensation, value a concession or a brand, and put numbers to what the parties discuss in abstract terms. In international arbitration, where different jurisdictions and laws converge, this work requires even greater methodological care, as the arbitral tribunal will have to compare reports prepared under very diverse criteria.
Some examples help to illustrate. The calculation of lost profits—the profit someone has failed to earn due to an external event—seems simple, but it requires constructing a credible hypothetical scenario: what would have happened if the damage had not occurred. Company valuation can be done by discounted cash flow, market multiples, or adjusted net asset value, and choosing the appropriate method for the case is already half the job.
And in the newer field, tracking assets on a *blockchain* allows following the money's path on a public and immutable ledger, even when the scammer thought they had erased the trail. Just because a cryptocurrency scam seems like a lost cause doesn't mean it is: often the information is there, you just need to know how to read it.
And here lies the less technical, and perhaps more important, part of the profession: independence.
An expert's value is not in telling the client what they want to hear, but in offering a defensible truth. An inflated report deflates at the first question from the opposing party, and when that happens, it harms precisely the person who commissioned it.
Therefore, a good report combines two things that don't always go together: technical rigor and clarity. It must be solid enough to convince another economist and clear enough for a judge who is not an economist to understand. A report that no one understands convinces no one.
All of this paints a picture of a discreet figure, but one increasingly present in proceedings with an economic component.
Any of us could find ourselves, without seeking it, in a dispute where the truth is not a matter of words but of numbers: a commercial dispute, a patent issue, a mis-sold banking product, a digital fraud. Knowing that this work exists—and that a well-founded figure can decide a lawsuit—is already a first step towards defending oneself.
Because numbers, contrary to the cliché, do not speak for themselves. They do not lie, but they also do not declare on their own initiative. Someone must know how to read them, organize them, and, if necessary, make them declare before the tribunal.
