Legal Q&A

Legal Q&A: Expert witnesses

Amy Roberts, Associate, CMS Cameron McKenna Nabarro Olswang

What additional duties do independent expert witnesses have to consider?

LAST year, we covered the Technology and Construction Court (TCC) decision of A Company v X which found expert witnesses can owe a fiduciary obligation to their clients (Sept CES 2020). The result of the appeal decision in that case has thrown expert’s duties into the spotlight again. We look below at the implications of the Court of Appeal decision and some other key considerations for those acting as independent experts.

Fiduciary duties and conflicts of interest

In A Company v X (2020) EWHC 809 (TCC), the developer of a large petrochemical plant engaged a consultant, who was required under the contract to provide issued for construction (IFC) drawings. In March 2019, a contractor brought a claim to arbitration against the developer for delay and disruption due to the IFC drawings. The developer appointed Secretariat Consulting as an expert. In October 2019, the consultant commenced arbitration proceedings against the developer for unpaid fees, including those wrongly disallowed due to the delay in the issue of the IFC drawings. The consultant approached Secretariat and, in undertaking a conflict check, Secretariat identified that one of its group companies (in a different country) acted for the developer.

Secretariat notified the developer’s solicitor, who said it considered there was a conflict of interest. Secretariat disagreed and, without any further correspondence or confirmation, began work on behalf of the project manager firm. The TCC found that Secretariat owed a fiduciary obligation to the developer and that was not satisfied by putting in place measures to preserve confidentiality and privilege, it extended to the expert ensuring they were not in a position where his duty and interest may conflict. Specific reference was made to the Chartered Institute of Arbitrators Expert Witness Protocol.

Court of Appeal

The consultant approached Secretariat and, in undertaking a conflict check, Secretariat identified that one of its group companies (in a different country) acted for the developer.

The Court of Appeal dismissed Secretariat’s appeal in Secretariat Consulting Pte Ltd v A Company (2021) EWCA Civ 6, albeit on different grounds to the TCC. It still found there to have been a conflict of interest but on the basis of Secretariat’s retainer which provided an obligation for Secretariat to avoid conflicts of interest for the duration of its appointment. As conflict checks were carried out across the Secretariat group, the undertaking by Secretariat in the retainer bound all the group companies. On that basis, and differing from the TCC, the appeal court said that while an expert appointment may have the characteristics of a fiduciary relationship, including the duty of loyalty, it was not necessary to make such a finding in this case. Instead the court proceeded on the assumption that Secretariat did not owe a fiduciary duty to the developer.

What does this mean for experts?

Experts must ensure that care is taken in deciding whether a conflict has arisen and should communicate clearly with clients should similar circumstances arise.
Consider the wording and terms of retainers/appointments carefully – this could bind group companies in different locations. Be aware of conflict warranties, as well as execution of retainers on behalf of the entire group. Due to the increasing trend of globalisation amongst expert services firms (especially within the construction sector) this is key.
It is possible for an expert to have fiduciary duties to their clients. While that was not the position in this case, the TCC and Court of Appeal have not ruled out those more onerous obligations applying.

Duties to the court/tribunal

Assuming that conflicts are clear, what other potential pitfalls should those acting as independent experts be aware of? A key distinction between a consultancy role and an expert appointment is that an expert’s ultimate duty is to the court/tribunal, overriding any obligations to the client instructing and/or paying the expert. These duties are set out for England and Wales in Civil Procedure Rules Part 35 (CPR 35) and Practice Directive (PD) 35. It is particularly important that experts be aware of the duties set out within CPR 35 and PD 35, as expert evidence can be rejected if these duties are not complied with. Furthermore, the courts can apply sanctions if experts fail to comply with such duties.

As can be expected, the TCC will not accept experts providing evidence whereby they attempt to decide the fate of the court action which is ultimately for the court to decide.

There are numerous examples where courts have rejected expert evidence where they consider such independence has been lacking. For example, in Great Eastern Hotel Company Ltd v John Laing Construction Ltd, Laing Construction Plc (2005) EWHC 181 (TCC), Judge David Wilcox rejected the expert evidence in relation to the delays claimed and the standard of competence expected of a contract manager. In this case, the expert failed to consider contemporary evidence, including photographs, and accepted accounts which were favourable to Laing without properly testing the facts and analysing accordingly. When presenting evidence, experts are required to employ an extra level of scrutiny to material presented to them. Similarly, in Van Oord UK Limited and SICIM Roadbridge Limited v Allseas UK Limited (2015) EWHC 3074 (TCC) the court was unable to accept quantum evidence that had failed to properly check or test the information provided. The court was critical of the fact that the expert had used rates claimed by his client without checking them or considering evidence put forward by the other party or opposing expert. When tested during cross examination, it transpired that some of the expert’s views came from assertions made by his client in discussions underlining the importance of basing findings on factual evidence and contemporaneous documents that can be appropriately referenced.

Parameters of expertise

Another key consideration for experts is the parameters of their expertise, including whether a particular question or issue falls outwith that expertise. It is clear from both CPR 35.3 and PD 35 (rule 35(1)) that experts are to provide evidence that falls within the scope of their expertise. Where an issue falls outwith an expert’s expertise, this should be made clear within their report. This too applies when an expert is unable to reach a definitive opinion

In addition, experts should be wary of straying into the realms of advocacy. For instance, in DBE Energy Limited v Biogas Products Limited (2020) EWHC 1232 (TCC) Mr Justice Waksman found issues with the defendant’s expert evidence. Namely, (i) the expert attempted to introduce inadmissible evidence into the report and joint statement; (ii) within the expert report, the expert advocated for the defendant without acknowledging alternative factual information from the claimant; and (iii) on occasions, the expert made factual findings in the report which were not agreed. The first two issues fall widely into an expert’s duty to the court and the requirement to provide independent evidence (as above). The third issue, however, is a further consideration for experts to ensure that they do not attempt to assert facts which are for the court’s determination. As can be expected, the TCC will not accept experts providing evidence whereby they attempt to decide the fate of the court action which is ultimately for the court to decide.

Summary

These cases demonstrate the different pressures and standards consultants will be held to when acting as independent experts rather than advisors. Ensuring conflict checks are cleared (with reference to the firm’s terms of business) as well as having CPR 35 and PD 35 to hand throughout the instruction remain key.

Amy Roberts, Associate, CMS Cameron McKenna Nabarro Olswang
amy.roberts@cms-cmno.com www.cms.law @cms_law

1 This sets out numerous criteria, including: “(a) The expert shall be independent of the party appointing him (Article 4.1); (b) The expert’s duty in giving evidence is to assist the Tribunal to decide the issues in respect of which expert evidence is adduced (Article 4.3); (c) The expert’s opinion shall be independent, objective, unbiased and uninfluenced by the pressures of the dispute resolution process or by any party (Article 4.4).”