Published 2026-09-17 · Last reviewed September 2026
Assumptions can form part of expert evidence in complex litigation and arbitration. Financial records may be incomplete, technical information may require interpretation, or certain factual matters may remain unresolved when an expert analysis is prepared. Depending on the assignment, a forensic expert may therefore need to make assumptions when developing an analysis.
The important consideration is how those assumptions are identified, supported, tested and communicated.
For legal teams, understanding the assumptions underlying expert evidence can help distinguish between information supported by available evidence and matters that depend on a particular scenario, input or professional judgement.
This article explains how forensic experts may identify and explain assumptions when preparing expert evidence for disputes.
What Is an Assumption in Expert Evidence?
An assumption is a proposition accepted for the purpose of an analysis where the underlying fact has not been independently established by the expert at that stage.
For example, a financial analysis may require an assumption about the level of revenue a business might have achieved during a particular period. A construction analysis may require an assumption concerning the potential effect of an event on a project programme. A digital forensic analysis may depend on assumptions about the scope or completeness of available data.
An assumption is different from a finding based directly on evidence.
Where an expert relies on an assumption, the report can explain what has been assumed, why it is relevant to the analysis and, where appropriate, what information or instructions provide its basis.
Why Assumptions Can Arise in Forensic Analysis
Expert evidence can involve information from contracts, financial records, witness statements, technical documents, databases, correspondence and other materials. The available evidence may not establish every fact relevant to an analysis.
Assumptions can therefore arise in several circumstances.
Incomplete Information
An expert may not have access to every document that could potentially affect the analysis. Depending on the assignment, the analysis may need to proceed using the information available at the relevant stage.
Where information is incomplete, it can be useful to identify the resulting limitation rather than imply that the available material necessarily represents the complete evidential picture.
Unresolved Factual Issues
Some factual matters may remain disputed between the parties. An expert may be asked to consider the consequences of particular factual scenarios rather than determine which disputed account is correct.
In such circumstances, the distinction between an assumed scenario and an established fact can be important.
Forecasting and Counterfactual Analysis
Some disputes require consideration of what might have happened under an alternative scenario. Loss calculations, business interruption analyses and certain economic assessments may involve assumptions because the alternative scenario cannot be directly observed.
The assumptions used for such an analysis can therefore have an important relationship with the resulting opinion.
Technical Interpretation
Engineering, construction and digital evidence can involve technical information that requires interpretation within the expert's area of expertise.
Where relevant information is missing or competing interpretations exist, the expert may need to state the basis on which the analysis proceeds.
How Forensic Experts May Identify Assumptions
A structured review can help separate assumptions from information that has been directly established.
Reviewing the Available Evidence
An expert will generally review the materials relevant to the assignment. Depending on the dispute, these may include:
- Contracts and amendments
- Accounting records
- Management information
- Invoices and transaction records
- Project records and programmes
- Technical reports
- Correspondence
- Witness statements
- Digital records
- Industry or market information
- Instructions provided for the expert analysis
Reviewing these materials can help identify which matters are supported by available evidence and which require an assumption, clarification or further analysis.
Separating Evidence From Interpretation
Expert analysis can contain factual information, professional interpretation and assumptions. Keeping these elements distinguishable can make the reasoning easier to understand.
For example, a document may establish that a particular transaction occurred. Assessing the significance of that transaction for a loss calculation may require professional analysis. If another relevant fact has not been established, the expert may need to state an assumption before incorporating it into the analysis.
Identifying Material Assumptions
Assumptions will not necessarily have the same significance.
Depending on the assignment, an expert may consider whether changing a particular assumption could materially affect the analysis. Assumptions with a potentially significant effect may warrant particular attention and explanation.
Where Assumptions May Arise Across Different Forensic Disciplines
The nature of assumptions can vary according to the type of dispute and the discipline involved.
Forensic Accounting
In a financial dispute, assumptions may relate to matters such as:
- Expected revenue
- Operating costs
- Profit margins
- Customer retention
- Business growth
- Working capital
- Financial performance under an alternative scenario
The expert can distinguish information taken from accounting records from assumptions used to develop a particular calculation.
For disputes involving financial analysis, it may also be useful to understand the wider role of forensic accounting and the types of matters that may require specialist analysis. See the forensic accounting services for further information.
Forensic Economics
Economic analysis may involve assumptions concerning market conditions, pricing, demand, competition, growth or other economic variables.
Where an analysis considers a counterfactual scenario, assumptions may be necessary because the alternative outcome cannot be directly observed.
The relevance and treatment of those assumptions will depend on the specific assignment and methodology.
Construction and Engineering
Construction disputes can involve assumptions about programme effects, productivity, resources, sequencing, costs or the consequences of particular events.
These assumptions may need to be considered alongside project records and other technical evidence. Where a dispute involves both technical and financial questions, the relationship between different areas of expert analysis may also require consideration.
Digital Forensics
Digital forensic analysis can depend on assumptions concerning the availability, integrity or completeness of particular datasets.
For example, if only part of a dataset is available for examination, the scope and limitations of the analysis may need to be explained rather than treating the available material as necessarily complete.
This can be particularly relevant where digital evidence forms part of a wider financial, commercial or intellectual property dispute.
How Experts May Explain the Basis for an Assumption
Simply listing an assumption may not provide sufficient context. Depending on the assignment, an explanation can address several points.
What Is Being Assumed?
The report can state the assumption in clear and specific language.
A broad statement such as "certain costs are assumed" may leave uncertainty about what has actually been assumed.
A more precise explanation can identify the particular cost, period, transaction, event or scenario to which the assumption relates.
Why Is the Assumption Needed?
The report can explain why the assumption is necessary for the analysis.
For example, the relevant evidence may not establish a particular factual matter, or the expert may have been instructed to consider a specified hypothetical scenario.
What Is the Assumption Based On?
Where relevant, the expert can identify the evidence, instructions, information or professional reasoning underlying the assumption.
This helps the reader understand whether the assumption arises from documented information, an instruction, a scenario provided for analysis or another identified basis.
Could a Different Assumption Affect the Analysis?
Where appropriate, an expert may consider alternative assumptions or explain how changing a particular assumption could affect the analysis.
This can be useful where a particular input has a potentially significant effect on the resulting calculation or opinion.
Assumptions and the Role of an Expert
In litigation or arbitration, the applicable procedural framework may require an expert to distinguish professional opinion from matters that are for the court or tribunal to determine.
An expert's role is also different from that of an advocate for either party. The precise requirements can vary according to the jurisdiction, procedure and nature of the appointment.
For that reason, an assumption should not automatically be presented as an established fact simply because it is used in an analysis.
Where the factual basis is uncertain or disputed, explaining that uncertainty can help the reader understand the scope and limitations of the expert's opinion.
How Assumptions May Be Tested
Assumptions can be examined in different ways depending on the nature of the expert evidence.
Comparing the Assumption With the Evidence
The available documentary and other evidence can be reviewed to determine whether it supports, contradicts or leaves uncertainty around an assumption.
This may help identify areas where further information or clarification could be relevant.
Considering Alternative Scenarios
Where more than one factual scenario is relevant to the assignment, an expert may be asked to consider alternative assumptions.
This can show how an analysis changes under different inputs without requiring the expert to determine disputed factual questions outside the scope of the expert's role.
Sensitivity Analysis
In some financial or economic analyses, sensitivity analysis may be used to examine the effect of changing selected assumptions.
For example, an expert may consider how a calculated result changes when a particular variable is increased or decreased.
Sensitivity analysis does not establish which assumption is correct. Rather, it can illustrate the relationship between a particular assumption and the resulting analysis.
Cross-Checking With Other Evidence
An assumption may also be considered alongside project records, financial information, technical material, digital evidence or other expert analysis.
This may help identify inconsistencies or areas that require further consideration.
Issues That May Arise When Assumptions Are Not Clearly Explained
The way assumptions are presented can affect how easily expert evidence can be assessed.
Potential issues include:
- Failing to distinguish assumptions from established facts
- Using broad or ambiguous assumptions
- Not explaining why an assumption was necessary
- Omitting relevant information supporting the assumption
- Treating a disputed factual proposition as established
- Failing to identify assumptions that could materially affect the analysis
- Presenting a calculation without explaining its key underlying inputs
- Not addressing relevant alternative scenarios where they form part of the assignment
These issues may make it more difficult for legal teams, opposing experts and decision-makers to understand how an expert reached a particular opinion.
Questions Legal Teams May Consider
When reviewing expert evidence, legal teams may wish to consider questions such as the following.
Which Parts of the Analysis Depend on Assumptions?
Identifying the assumptions underlying an analysis can help separate its evidential foundation from the expert's professional opinion.
Are the Assumptions Supported?
The relevant consideration may be whether there is evidence or another identified basis for an assumption, rather than whether the assumption produces a particular result.
Are Any Assumptions Disputed?
If an assumption concerns a factual matter that is disputed between the parties, the legal team may need to understand how that dispute affects the expert analysis.
Would an Alternative Assumption Change the Analysis?
Where an assumption is significant, it may be useful to consider whether an alternative input would produce a materially different result.
Are the Limitations Clearly Stated?
The report can identify where the analysis depends on incomplete information, specified assumptions or other limitations relevant to the opinion.
For broader information about working with specialist evidence in disputes, legal teams can also review the services available from DisputeForensic.
The Importance of Clear Assumption Analysis
Assumptions are not necessarily an indication of a weakness in expert evidence. In some forms of forensic analysis, they may arise because the expert is examining incomplete information, disputed facts or scenarios that cannot be directly observed.
The important consideration is transparency.
A clear analysis can identify the assumptions used, explain why they are relevant, distinguish them from established evidence and, where appropriate, consider how changes to significant assumptions affect the analysis.
For legal teams working with expert evidence, these distinctions can help clarify the relationship between evidence, assumptions, methodology and expert opinion.
Conclusion
Assumptions can arise across forensic accounting, forensic economics, construction and engineering analysis, digital forensics and other forms of expert evidence.
Forensic experts may identify assumptions by reviewing available evidence, separating established information from interpretation and identifying areas where the analysis requires an assumption or specified scenario.
Clear reporting can then explain what has been assumed, why the assumption is relevant, what information or instructions provide its basis and, where appropriate, how the analysis may change if the assumption changes.
For legal professionals, examining these points can provide a clearer understanding of the evidential foundation of an expert opinion and the areas where further evidence or clarification may be relevant in a complex dispute.
Disclaimer: This article provides general information about assumptions in expert evidence and forensic analysis. It is not legal, accounting, valuation, engineering, digital forensics or other professional advice. The appropriate approach will depend on the circumstances of the matter, the expert's instructions and any applicable procedural requirements.