Parties too often under-estimate the value of having their case on quantum in order in the lead up to a hearing. In the context of complex high value construction disputes much has been written about the role of experts and ensuring that their evidence is properly presented to the court. The court’s gaze is increasingly turning to liability experts, particularly in the context of delay analysis.
Does this mean that the need to get the figures right and the claim substantiated is just too obvious that we don’t need reminding? After all in the vast majority of the cases we are involved with, the parties are fighting over how much money is owed to whom or the “real” cost of remedying defective work, and they can’t do that without properly presenting their case on quantum, can they?
From my recent experience of cases proceeding in the TCC, it seems that the judges are continuing to wrestle with under-prepared quantum claims and experts who are happy to let the dispute run its course at trial.
For a claimant, even where the defendant accepts liability and the battleground is narrowed to quantum, it will be a pyrrhic victory if, when it comes to court, the trial judge cannot navigate the numbers:
- At worst, a claimant is at risk of an indemnity costs order for a separate quantum hearing if quantum issues cannot be heard at the same time as liability, and the claimant is still serving quantum evidence on the eve of trial.
- At best, the claimant is left with the hope that the approach of the defendant’s expert is somehow even more impenetrable and the claimant’s numbers are accepted almost by default (a high-risk strategy where the burden of proof rests squarely with the claimant).
Equally, for a defendant taking a hard line and unreasonably dismissing item after item, the judge will be left with the task of conjuring up a percentage that may come as a shock.
Your experts can now be ordered into the hot-tub
The TCC judges were probably the first to embrace hot-tubbing when (in October 2010) provisions were incorporated into the TCC Guide to allow judges to direct that there should be concurrent evidence. The CPR rules on expert evidence have now caught up, with the process for hot-tubbing set out in the amendments to PD 35 (Experts and Assessors), effective from 1 April 2013.
Quantum experts, often the most likely contestants in the hot-tub, can exhaust the judge’s patience by dismissing their opponent’s line items altogether, haggling over small ticket items and insisting on a smorgasbord of separate schedules.
As an Australian lawyer working across both litigation and arbitration, I know that hot-tubbing comes with a successful track record in international arbitration and the Australian courts. It is touted as saving time and money, removing bias and focusing the judge’s mind on the key issues. However, it can be risky if your expert has not given evidence at a hearing before and feels pressured to make concessions. A well-structured quantum claim and a well-prepared expert who has worked hard with his opposite number to narrow the issues will minimise the risks that an order for concurrent evidence may bring.
Possible solutions: Scott Schedules, joint statements and specific disclosure
The courts may be slower to order your expert into the hot tub to try to reach consensus on various issues if they have:
- Isolated the points of disagreement in a joint statement.
- Simplified the quantum case for the court by collating all claims and counter-claims into one reference point.
For example, in the mammoth Wembley litigation (Multiplex v Cleveland Bridge), the parties’ quantum experts presented several all-inclusive Scott Schedules running to thousands of items which were indispensable to the proceedings. Jackson J (as he then was) compared his task of managing the case to the labours of Hercules and the slaying of the Lernaean Hydra, encouraging the parties to work co-operatively to limit re-re-re-amends to the Scott Schedules. He warned of the mounting costs facing parties who fail to reach some measure of agreement when the battleground is narrowed to quantum, advising:
“Once this court has decided questions of principle, the parties can save themselves and their shareholders many millions of pounds by instructing their advisors to agree reasonable figures for quantum.”
While quantum experts in the hot tub may assist the court in such labours going forwards, it will no doubt throw up all sorts of quandaries for parties with under-prepared quantum claims.
By encouraging quantum experts to meet and prepare joint statements and consolidated Scott Schedules early on, with a well thought-out case parties can limit the risk of the court ordering hot-tubbing. If hot-tubbing is elected or ordered, they can assert greater control over the process. If your expert does not have the documents he needs to be satisfied that the claimant has substantiated its claim, make a specific disclosure request. This will avoid allowing their counterpart time to improve the claimant’s case in the hot tub.
What happens where the dispute centres on remedial solutions for defective works and the parties are in agreement that some damages are payable, but cannot agree on the measure of damages?
In this example, there is a risk that the parties’ experts will adopt a positional approach and dispute item after item, leaving a lot to chance before the court. Judges will of course encourage the experts to work together to find some middle ground (especially for small ticket items). In my experience, by adopting a reasonable approach to claims and seeking to “meet in the middle”, parties are likely to fare much better before the courts and will have more control over the outcome whether their experts appear concurrently or one at a time.
It may be obvious but…
If you ask any TCC judge how parties have been conducting their quantum claims and counter-claims in the last year, I am sure they would list a plethora of cases where a poorly-prepared case on quantum has presented them with a headache, taken up more of the trial timetable than anticipated, or crucially, undermined a well-argued case on liability. Whether you are trying to minimise the risk of an order for hot-tubbing or trying to reign in the direction of the quantum evidence, you will invariably better manage client expectations and be received by a grateful court if quantum is not merely an afterthought.