Recent Cases on the Duties and Roles of Expert Witnesses in Litigation in the United Kingdom and Australia – The Importance of Remaining Independent
The firm’s update expands further on the roles and duties of expert witnesses in litigation – a subject which is of considerable importance for construction litigation as many construction disputes turn on technical questions and, hence, the evidence of experts in the relevant technical fields. In its June 2021 update, the firm discussed the importance of experts avoiding conflicts of interest by reference to the English Court of Appeal’s decision in Secretariat Consulting & Ors v A Company (“Secretariat”). In that case, the Court of Appeal dismissed an appeal made by Secretariat (a global provider of expert services) which restrained it from acting in an arbitration on the basis that Secretariat was conflicted. In this update, the firm focuses on two cases in England and Australia on the duty of expert witnesses to remain independent and avoid partisanship.
Blurring of the Lines – Maintaining Independence Whilst Being Part of the Litigation Team
Expert witnesses play an ever-increasing role in modern litigation, particularly in construction and engineering disputes. Only a few decades ago, the typical expert witness would have been a practicing professional who, on occasion, might be asked to provide an independent opinion on particular matters on which a court or tribunal required assistance in order to arrive at a decision. However, the prevalence of expert evidence in construction litigation and other litigation involving technical questions, and the importance of expert evidence to the outcome of such litigation, has led to the establishment of firms dedicated solely to the provision of expert witness services to clients.
The courts recognize that party-appointed experts play an important role in the conduct of litigation. In Secretariat, the Court of Appeal stated that “the professional expert witness will be viewed, and rightly so, as part of the client’s litigation team.” In construction and engineering disputes, it is usual for parties to appoint independent experts to advise on technical, quantum and delay issues. Such experts owe duties to their clients, such as an obligation to avoid conflicts of interest and to maintain confidentiality. Legal practitioners typically rely on experts to assist them in identifying the relevant issues and preparing their clients’ claims in a manner which is consistent with the expert’s independent view. Those same experts are ordinarily then retained to give evidence before the court or arbitral tribunal. Obviously, a client will generally expect that the evidence of its experts will assist in the conduct of its case, subject, of course, to the qualification that an independent expert cannot be expected to offer anything other than their independent view.
In England and Australia, expert witnesses owe their primary duties to the court or arbitral tribunal. Experts are typically bound by particular rules of conduct when preparing reports and giving evidence, such as the Civil Procedure Rules (“CPR”) (for court proceedings in England and Wales), the Expert Witness Code of Conduct, which forms part of the Uniform Civil Procedure Rules (for court proceedings in most Australian states) or the IBA Rules on the Taking of Evidence in International Arbitration. The obligations owed by experts will depend on the terms of the conduct rules by which they are bound. However, typically, experts are required to make reasonable enquiries, disclose and produce all relevant documents which they rely upon and provide a declaration that their opinion is their independent view and is consistent with the documents and other evidence which they have seen. Experts are also ordinarily expected (and directed) to meet and prepare joint expert reports with counterparts engaged by the other side, conduct themselves transparently, make appropriate concessions and provide impartial evidence (even where it would harm their instructing party’s case). Accordingly, an expert’s principal obligation is to assist the decision maker, and not operate as an advocate for its instructing party’s case (i.e., a “hired gun”). Unfortunately, many experts seemingly fail to recognize this important distinction. For example, in a 2019 survey, 41% of expert witnesses surveyed said that they had come across an expert that they considered to be a “hired gun” (Annual Expert Witness Survey Report 2019; Bond Salon and The Times).
The consequences of expert partisanship can be severe and could include the exclusion of the expert’s evidence in its entirety or their evidence being afforded little weight. As such, it is important for legal practitioners and experts to recognize that the role of an expert gives rise to potentially conflicting duties and obligations and to ensure that the expert maintains independence in the eyes of the decision maker. This is illustrated (in the context of English and Australian law) in the two judicial decisions discussed below.
An English Illustration - Dana UK Axle Ltd v Freudenberg FST GmbH  EWHC 1413 (TCC) (“Dana”)
Dana arose out of a claim that the Respondent had supplied the Claimant with defective automotive parts. The Respondent retained three experts to produce expert reports in respect of engineering and scientific issues. However, the expert reports failed to comply with the Guidance for the Instruction of Experts in Civil Claims 2014 (the “Guidance”), which is referred to in CPR Practice Direction 35, because they:
- did not detail the instruction materials the experts received;
- showed that the experts had visited the Respondent’s factories without informing the Claimant’s experts and without disclosing information collected during the visits; and
- did not identify the documents on which the experts relied in support of their opinions and analyses.
The Respondent was permitted by the Court to rely on the three expert reports, provided that it filed and served revised expert reports which were amended to comply with the CPR and the Guidance. However, despite the Respondent filing amended reports, the Claimant maintained that the Respondent’s expert reports failed to comply with the CPR and the Guidance, and made an application that the Court exclude all of the expert reports relied upon by the Respondent in their entirety. This application was successful, and the Technology and Construction Court agreed to exclude all three reports. The Court specifically found that:
- A significant amount of information had been provided to the experts over a long period of time that had never been disclosed to the Claimant or otherwise identified. The Court considered this to be a serious breach of an essential requirement to ensure that the Court can understand what information and instructions were provided to each side’s experts.
- Site visits had been undertaken over and above what was detailed in the reports. The Court only discovered this during the course of the hearing. This was considered by the Court to be “entirely unacceptable.”
- In respect of two of the expert reports, the experts had given opinions without identifying the information relied upon.
- There was a free-flow exchange of information between the Respondent’s experts and its in-house technical specialists, apparently with no, or very little, oversight from its solicitors. The experts had been privy to information that was not shared with the Claimant’s experts.
- That flow of information continued during the period between the joint expert meetings and the signing of the experts’ joint statement, despite the Claimant’s solicitors raising concerns about it.
- Two of the Respondent’s experts made site visits without informing the Claimant’s experts and without giving them a chance to access and consider the same information.
- The analyses and opinions of the Respondent’s experts appeared to have been directly influenced by the Defendant.
In other words, this was a case where the Respondent’s experts were no longer just part of “the client’s litigation team”, but were acting in a one-sided manner which advanced their client’s case but breached their independent duties to the Court.
An Example of the Position in Australia - Fulmer v Thompson  QSC 119 (“Fulmer”)
Fulmer involved a claim brought relating to an oral agreement concerning the purchase of a used vehicle sales business. The agreement was said to crystallize once a profit target was met. The Plaintiff claimed that the profit target had been met, which the Defendants had acknowledged in 2010. However, the Defendants subsequently denied that the profit target had been met and refused to issue shares in the business to the Plaintiff. The Defendants also issued a counterclaim seeking indemnification for trading losses that they alleged they had occurred.
The Court allowed the parties to rely on accounting expert evidence during the hearing to assist in determining whether the profit target had, in fact, been met. The Third Defendant (who owned the business that was the subject of the dispute) engaged an accountant (“Mr H”) who had been responsible for the provision of accounting services to the Defendants on an ongoing basis. As to this, the Court acknowledged that there “may be benefits and disadvantages in enlisting a professional person with pre-existing involvement as a witness to relevant matters in a case to testify as an expert witness.” The Court then noted that “the most obvious disadvantage is the risk that a pre-existing professional allegiance to a party may compromise the degree of independence and objectivity with which the expert approaches the task, resulting in evidence so tainted by partisanship as to lack credibility and reliability.”
However, during the course of the trial, it emerged that Mr H had actively engaged with the Defendants’ solicitor, including on how to shape financial calculations in order to avoid liability to the Plaintiff. Furthermore, it was accepted that Mr H had been the accountant for the Defendants when they admitted that the profit target had been met in 2010. The Court also found that the trading losses that were alleged by the Defendant (which were the subject of its counterclaim) had been “belatedly certified” by Mr H. The Court, accordingly, determined that Mr H did “not have the starting advantage of credible objectivity.”
In addition to these issues, Mr H’s expert report failed to include a proper analysis of his process and findings, failed to identify clearly the supporting source material, did not include any relevant source financial records and referred to various information and calculations which were not supported by witness or documentary evidence. As such, the Court said that Mr H’s report “appeared to be founded on a mirage of hearsay figures unaccompanied by any meaningful attempt to identify and prove the relevant source documents.” The Court, accordingly, agreed with the Plaintiff that the profit target had been met in 2010 and dismissed the Defendants’ counterclaim.
It is understandable why the Defendants in this case had included as part of their “litigation team” an individual who had expertise in accounting issues and personal knowledge of the particular issues in dispute. However, it is also clear that the Defendants and their solicitor failed to take appropriate steps to ensure that Mr H provided evidence which was independent and of assistance to the Court.