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Experts and conflicts of interest

It’s been a while since I last wrote about experts (last August to be exact, when I looked at “The good, the bad and the ugly” of expert witnesses). However, I couldn’t let the issues that cropped up in Essex County Council v UBB Waste (Essex) Ltd go without comment. If you read the judgment or, at least the relevant paragraphs (35-57), you’ll see what I mean.

 Essex County Council v UBB Waste (Essex) Ltd

This was a dispute over a mechanical biological waste treatment (MBT) plant in Basildon, built to process the county’s household waste. It was certified as having passed its Readiness Tests in November 2014 but did not pass the Acceptance Tests or the Acceptance Longstop Date of 12 January 2017.

Essex CC said that UBB failed to design and construct the facility so that it was capable of passing the Acceptance Tests. It contended that UBB’s failure to pass the Acceptance Tests by the Acceptance Longstop Date was an event of Contractor Default and sought damages and a declaration that it was entitled to terminate the contract. In turn, UBB argued that Essex CC was in breach of contract and sought damages in excess of £77 million as well as declaratory and injunctive relief. It claimed this was “termination for convenience dressed up as termination for contractor default”.

Ultimately the judge decided that “the fundamental problem with this project was that UBB made a number of serious design errors” and “built a facility that simply could not pass the Acceptance Tests”. Also that:

“… it is nonsense to suggest that termination on the basis of UBB’s failure to pass the Acceptance Tests would be termination for convenience dressed up as termination for Contractor Default. The allegations that the Authority failed to act in good faith in its attempts to negotiate a solution and in its approach to termination are without foundation.”

Requirements for expert evidence

In my “The good, the bad and the ugly” expert witnesses blog, I explained that the starting point has to be understanding and complying with the requirements for expert evidence, which are set out in three main places: CPR 35, PD35 and the Guidance for the Instruction of Experts in Civil Claims.

Pepperall J does this too, but also mentions a number of cases, including Rowley v Dunlop, where David Richards J said:

“The essential character of expert evidence is that it should be the independent product of the expert uninfluenced by the pressures of litigation and that it should be objective and unbiased evidence on matters within the expert’s evidence: CPR 35PD.2.1-2.2.

The qualities of independence and lack of bias may be compromised by the expert’s connections with the litigation or the parties or those who may benefit from the litigation. It is always a matter for the court to decide whether any such connections disqualify the expert from giving evidence or whether, as may often be the case, they go not to the admissibility of the evidence, but to the weight to be attached to it.

Such connections may take a number of forms, of which three are the most obvious. First, the expert may have a financial interest in the outcome of the litigation. Only rarely will the court admit the evidence of such an expert … Secondly, the expert may have a conflicting duty. Whether this will disqualify the expert from giving evidence will depend on the circumstances of the case… Thirdly, an expert may have a personal or other connection with a party, which might consciously or subconsciously influence, or bias, his evidence. Such connections will not normally of themselves disqualify the witness, but will go to the weight to be attached to the evidence.”

He also referred to Fraser J’s judgment in ICI Ltd v Merit Merrell Technology Ltd, which I also discussed at the time.

 Evidence in Essex County Council v UBB Waste (Essex) Ltd

The judge had the help of ten factual witnesses and six experts, who gave oral evidence. He also considered reports from a further two experts. However, only one expert’s “independence, impartiality and objectivity” was called into question, UBB’s technical expert, Dr Weatherby (who is the managing director of Fichtner Consulting Engineers Ltd).

(The judge also made some interesting remarks about the factual evidence, but I’ll leave that for another day.)

UBB’s technical expert

After setting out a brief history of Fichtner’s involvement with the project (which pre-dated UBB’s contract with Essex CC), the judge highlighted what he described as “obvious and serious” conflicts of interest:

  • Fichtner had played a substantial role on the project over an extended period of time, particularly between 2012 and 2014 when an employee was seconded to work on the project, and had billed “many hundreds of thousands of pounds”. The expert should have recognised this was a conflict of interest.
  • The expert failed to differentiate between the provision of consultancy services to a client and the provision of independent expert evidence. He failed to appreciate the difficulty in devising UBB’s strategy and then offering expert opinion evidence upon that strategy.
  • While the expert rightly concluded he could not have acted as an expert if UBB was going to make a claim against Fichtner for its consultancy work, he should have realised this did not solve the problem:
    • by being willing to give expert evidence supportive of UBB, the question of whether that evidence was independent, impartial and objective was raised. For example, did he adopt positions in order to please UBB?; and
    • as a significant shareholder in Fichtner, the expert had an interest in defeating Essex CC’s claims against UBB.

The judge said that both the expert and UBB should have recognised the conflict:

“Prudence dictated that the instruction should either have been withdrawn or refused. Upon deciding instead that it could proceed, there was no excuse for failing properly to disclose the conflict of interest.”

However, the expert had written seven expert reports for use in adjudications and his main report in the litigation before it was disclosed in a reply report dated 15 March 2019. This meant the expert’s:

“… failure to understand and declare the problem inevitably causes further concern that he does not really understand either the difference between acting as a consultant advising a client and acting as an independent, impartial and objective expert, or his duty to the court.”

The judge doubted that UBB would have been given permission to rely on the expert’s evidence if “the full extent of the conflict [had] been identified” earlier, although he accepted the point that there was a small pool of potential experts and a party shouldn’t be overly precious simply because an expert has had previous dealings with the project. However, here there was no evidence that UBB could not have found someone without any connections to the project.

This didn’t mean the judge ruled out his evidence as being inadmissible, but treated it with caution because of the way the expert “failed properly to distinguish between advocacy for a client and the rigour required when acting as an independent expert”. The judge cited a number of examples of the behaviour he would not have expected an independent and objective expert to demonstrate, including counsel’s remark that the expert:

“… tended to act as an advocate for UBB and that she was ‘struck by how readily [he] seeks to undermine [Essex’s case on an issue] on the basis of argument and supposition, unsupported by facts’.”

Ultimately, the judge preferred the evidence of Essex CC’s technical experts.

Conclusion

This is yet another cautionary tale for everyone involved in litigation and I’m not sure I really need to add much to the comments Pepperall J made – his words really do speak for themselves.

One thought on “Experts and conflicts of interest

  1. Of similar interest/relevance is the CA decision (particularly comment by Lord Woolf MR in Field & Anor v Leeds CC [1999]EWCA Civ 3013 when an expert was an employee of Leeds CC in its Housing Claims Dept..

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