I thought if we get it going I might as well jump in,BUT if we had an incident, then would we be legal.?
If YOU were the PIC, then everything would be fine. And if your friend would be PIC, you would be passenger and the flight would have been illegal even without having an accident.
(Apart from the metaphysical question of whether having an accident would be legal in its own right.)
But... There's something that's interesting here.
LASORS 2008, appendix F contains a bit of the ANO 2005 Schedule 8:
"The holder [of a Private Pilots License] shall not [...] fly as pilot in command of such an aeroplane carrying passengers unless within the preceding 90 days he has made three take-offs and three landings as the sole manipulator of the controls of an aeroplane of the same type or class"
The article doesn't, as far as I can tell, specify the capacity in which you have to do these three take-offs and landings. If you were acting as Pilot in Command, but you were letting your friend do the take-offs and landings "as sole manipulator of the controls", would that be legal, and would that count towards his 90-day currency?