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A Stark Warning to Expert Witnesses & Those Instructing Them
  • Aug 13, 2020
  • Latest Journal

Expert witness evidence came under scrutiny recently from the High Court in its decision in De Sena & Anor -v- Notaro & Ors [2020] EWHC 1031 (Ch).

The claim concerned the demerger of a property owning, family business. The transaction was alleged to be the result of undue influence on the exiting shareholder. Claims were also brought against the firms of accountants and solicitors who advised the company on the transaction. All claims failed and were dismissed.  

Permission for expert evidence was given in three fields, namely: (1) property valuation; (2) share valuation; and (3) accountancy liability issues.

Unconscious Influence
The property valuation expert witness instructed by the Claimants was considered by the Court to be “…a very professional witness, well spoken, clearly telling the truth and trying to help the court”. However, the expert evidence adduced by the Defendants was ultimately preferred by the Court.

At trial, the expert found himself being cross examined in relation to an attendance note of an early meeting he had attended with the Claimants and their legal team. The note was disclosed as part of the expert’s written report and included an account of the legal advice given to the Claimants at that meeting about the apparent strength of their claim. The note did not state that the expert had left the meeting when the legal advice was given. The Court commented that:

“…somewhat unfortunately, [the Expert] had originally been part of the team advising the first claimant, and, no doubt unconsciously, this may have affected his evidence. In addition, the solicitors’ letter of instruction to him was far from neutral in its presentation of the matter. This may also have affected his evidence. He certainly commented in his report on matters beyond his (otherwise undoubted) expertise”.  (emphasis added).

Inadmissible Expert Evidence
Problems with the expert evidence did not stop there. The Claimants instructed one expert to provide evidence on both share valuation and the accountancy liability issues.

Interestingly, the issues with the expert evidence were raised by the Court on its own volition.

The Case Management Order provided that the relevant parties “…each have permission to adduce oral expert evidence from an accountant on the issue of scope and breach of duty…”. The Judge, having raised concerns early into the trial, became concerned with three issues:

1. relevant expertise - an assumption made by the parties that any accountant could advise the Court, whether or not s/he had experience of advising clients on demergers;

2. evidence on law – the experts had been asked to comment, for example, on the existence of a duty of care; and   

3. evidence on fact – the experts had been asked to comment, for example, on the terms of the contractual retainer.    

In relation to the first issue, the Court considered the experts’ CVs and remarked that there was no reference to demerger transactions. Further evidence of the experts’ experience was produced for the Court which proved to be insufficient. A key message for anyone engaged in providing expert evidence to the Court is set out in the judgment: “…it is for the expert witness tendered to demonstrate the expertise, not for the court to assume it”.

The Court went on to say:  “I emphasise that it is just not enough to be a ‘forensic accountant’. It is not the experience of giving ‘expert’ evidence in court that makes you an expert. Those firms that provide expert witness services really ought to have learned by now that expertise is acquired by doing the thing in question, usually over many years, and that merely being an accountant (or anything else) for a long time does not mean that you thereby become an expert in everything that accountants (or whatever it may be) commonly do”.

In relation to the second and third issues (evidence on law and fact) the Court went on to consider the questions posed of the expert by instructing solicitors. The questions are set out in full in the judgment. The court criticised almost all of the questions put to the experts including the following description (emphasis added):  

Question (ix) is one of the most egregious and naked usurpation of the functions of the court that I have ever seen […] Question (x) is almost as egregious and objectionable. I am unable to regard the answers to any of these questions as admissible evidence in this case. I am astonished that these questions were asked at all, and almost as astonished that they were answered.

The Court, in reaching its conclusion on the issue stated: I deprecate the (undoubtedly significant) expense which has been wasted on this aspect of the case, but it behoves the parties and their lawyers, […] to pay close attention to the rules regarding the admissibility of expert evidence.

Conclusion
Expertise

Where proceedings are governed by the Civil Procedure Rules, CPR 35.3(1) is paramount -  It is the duty of experts to help the court on matters within their expertise.

Those instructing experts should carefully consider the potential expert’s relevant expertise having specific regard to the issues in the case. Experts should be able to demonstrate their expertise in the relevant field and be prepared to turn down instructions where they are not truly an expert in that field.  

Generic CVs should be avoided in every case. A CV should always be tailored to ensure it properly demonstrates the expert’s expertise relevant to the issues upon which they are assisting the Court, making sure that expertise is front and centre.

Admissibility
Experts are required to assume (not determine) the facts upon which their expert opinion is based, making those assumptions clear to the Court.  Careful consideration must be given to the questions posed to an expert. If, like in this case, it is obvious that the answers involve making a determination of fact or law, the questions are likely to be improper and prone to be disregarded as inadmissible.  

Written by Liam Tolen, Associate in the Dispute Resolution Team at Ashfords LLP who, along with Andrew Perkins, Partner in Ashfords’ Dispute Resolution Team, and Dov Ohrenstein of Radcliffe Chambers represented the First and Second Defendants in successfully defending the £7M+ claim for undue influence and breaches of fiduciary duties
www.ashfords.co.uk

 

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