As someone that deals mainly with construction and engineering disputes, it is sometimes easy to forget that the “T” in TCC stands for Technology. In my defence, I would hazard a guess that at least three-quarters of judgments from the TCC are associated with the “C” (Construction), but the lack of technology cases means that they often stand-out.
It’s one such case that I want to talk about this week, Dana UK AXLE Ltd v Freudenberg FST GmbH, which concerned pinion seals manufactured by FST and supplied to Dana who then fitted them to rear axles installed on Jaguar Land Rover vehicles. However, that’s as far as the judgment of Joanna Smith J goes into the technical side of the case, as the judgment actually concerns an application by Dana to exclude the technical evidence of FST’s experts.
This isn’t the first time that the behaviour of experts and those that instruct them has cropped up recently, for example see Fraser J’s judgment in Beattie Passive Norse Ltd and another v Canham Consulting Ltd. Furthermore, Lord Hodge, the Deputy President of the Supreme Court and President of the Expert Witness Institute, said last week that lawyers must do better in not jeopardising the impartiality of expert evidence.
I appreciate that the vast majority of experts and those instructing them follow the rules, and that we only hear about the minority of cases where they are alleged not to have followed the rules, but it nevertheless got me thinking about what can be done about it. However, before setting out my thoughts, back to our pinion seals application.
Dana UK AXLE Ltd v Freudenberg FST GmbH
This case went to trial on 5 May 2021 and, on day seven, Dana applied to exclude FST’s technical expert evidence. How the parties got to this stage can be summarised as follows:
- Expert evidence in engineering and materials/polymer science was due to be exchanged in February 2021 but FST served its technical expert evidence late.
- Dana said it would not object to the late service provided various defects in FST’s experts’ reports were remedied:
- a failure to identify the documents the experts had relied on (Dana was aware that detailed material containing technical information had been made available to FST’s experts “long before” it had been provided to Dana’s experts);
- a failure to provide details of site visits, such as photos, notes and other documents (the site visits had been undertaken without Dana being put on notice of the visits and without its experts being given the same opportunity to inspect FST’s operations); and
- a failure to always identify documents or sources of data referred to in the reports, which meant Dana’s legal team had to try and identify material from over 8,500 documents that had been disclosed.
- At the pre-trial review, the judge (O’Farrell J) ordered FST to provide revised reports addressing the above defects (the PTR order).
- Although revised reports were served, Dana remained of the view that they did not comply with the rules.
- Something called CPR Part 35 Questions and CPR Part 35 Answers were served in April, but Dana was still dissatisfied. However, as the trial was fast approaching, it wrote to the court to say it wouldn’t pursue the matter further as it wished to “avoid distractions in the short time remaining”.
- Dana continued to maintain its position during opening submissions and then during the trial itself. This resulted in the judge ordering FST’s solicitors to serve a witness statement explaining the situation regarding the contact FST’s experts had had with FST staff, site inspections and documents provided to the experts. This resulted in further disclosure from FST of some 175 documents (from about 2,500 referred to).
- Dana’s application to exclude FST’s technical expert evidence followed and was heard on a Friday afternoon, in advance of the planned start of FST’s experts’ evidence the following Monday. Dana said there was a breach of the PTR order and a failure to comply with CPR Part 35 and its Practice Direction, and the CJC’s guidance for experts.
Application to exclude technical expert evidence: breach of PTR order
While Joanna Smith J’s judgment is detailed and fact specific, given her findings, I think it is a must read for anyone involved in instructing experts. She held that FST was in breach of the “letter and the spirit” of the PTR order:
- With regard to the need to provide full details of all materials provided to FST’s experts, she concluded that a significant amount of information had been provided to FST’s experts over a long period of time that had not been disclosed to Dana or otherwise identified, and that the experts had “unfettered and unsupervised access to [FST] personnel”. She also identified different approaches within FST’s legal team to the question of privilege. This was not a technical or unimportant breach, it was important there was a level playing field for the experts.
- In terms of site visits, she described it as “entirely unacceptable” that the full extent of what FST’s experts were doing only came to light during trial.
- In terms of a failure to identify sources of data and so on, it was:
“… a paradigm example of what can go wrong if an expert is left to obtain information direct from his clients without legal involvement and, indeed, if that expert does not even require sight of the detailed information on which he then relies for the purposes of preparing his report…”
Consequently, FST did not have permission to rely on its three experts’ reports.
Application to exclude technical expert evidence: breach of CPR
Joanna Smith J started this section by referring to Fraser J’s judgment in Imperial Chemical Industries Ltd v Merit Merrell Technology Ltd (which Matt discussed at the time), and then by setting out the relevant sections of Part 35 and the experts guidance, before turning to the breaches that had been revealed. Again, it is fact specific.
The judge referred to the free flow of information between FST’s experts and FST’s employees with “no, or very little oversight from Fladgate”, which went beyond “logistics” and meant it was “inevitable” that FST’s experts were “privy to information that was not shared with Dana’s experts”. This continued during the period from when the experts met in October to when they signed the Joint Statement in December. They then relied on this information when they prepared their reports. At this point, she reminds us that the TCC Guide expressly tells legal advisors not to be involved in negotiating or drafting joint statements. Interestingly, she makes the point that this prohibition must also extend to parties but that the TCC Guide probably doesn’t make the point expressly because:
“… it does not anticipate that the parties themselves will ever be directly (and independently) in contact with the experts instructed on their behalf during this critical period.”
The evidence suggested that FST’s experts were:
“… relaying information obtained from the joint meetings to those employees and they were seeking assistance in how to respond.”
There was also evidence that the experts’ analyses and opinions were “directly influenced by FST”.
She concluded that:
“… FST’s direct influence over their respective reports is nevertheless clearly evidenced by their willingness to engage in the unrecorded communications … Truly independent experts paying proper attention to their duties would not have attended site visits without first informing their opposite number (Professor Mead) and would not have felt comfortable receiving extensive information from their clients to which their opposite numbers were not privy (Professor Mead and Professor Salant) …
The conduct of all three Experts has (at the very least) called into question the independence of their reports and the extent to which they have provided objective and unbiased opinions in those reports. Indeed I think there is some justification for the suggestion … that FST has interposed itself in the Experts’ reports to such a degree that they cannot confidently be said to be the result of the Experts’ independent analysis.”
Although the judge accepted that each expert had behaved differently, she was not inclined to draw a distinction between them. They had all failed to comply with the CPR in varying respects. Even without the breach of the PTR order, this would have been sufficient to justify refusing FST permission to rely on their reports.
What needs to change?
It is clear from Dana v FST and similar cases that something needs to change, and not just on the part of experts. Rather, as Lord Hodge makes clear, responsibility must also fall at the feet of those instructing the experts. This chimes with Joanna Smith J’s conclusion and her point that this is even more important when a case involves experts from other jurisdictions who may not be familiar with the rules that apply here.
I have covered this point before and you can see my recommendations in Blog post, When two judges go to war (on experts). However, since writing that post, we have seen new rules around witness statements and the declarations that both solicitors and witnesses have to sign. I wonder whether the answer would be to adopt that approach and oblige solicitors to sign a certificate of compliance for experts’ reports too.
There is also the option of increasing the use of single joint experts, but perhaps that is a point for another day!
How is this relevant to adjudication?
Some of you reading this might think that what’s been discussed above doesn’t really affect you because you only practice in adjudication. However, don’t fall into that trap. Just because an expert only normally practices in adjudication doesn’t mean that their disputes won’t proceed to trial. Also, if the expert in question is a RICS member then they will have professional obligations under the RICS Practice Statement and Guidance Note, Surveyors Acting as Experts, which applies to any instructions for surveyors acting as experts, and not simply litigation. Equally, party representatives who are RICS members have similar professional obligations under the RICS Practice Statement and Guidance Note, Surveyors Acting as Advocates.
The problem is that, unlike in litigation where CPR 35 applies to all experts regardless of their qualifications, these RICS standards only apply to RICS members and can’t be imposed on experts who are members of other professional bodies. However, all experts should strive to comply with these types of standards which, ultimately, have their origins in the Ikarian Reefer.
One final thought when it comes to adjudication is this. I would encourage party representatives to ensure that it is clear whether reports submitted in support of a party’s case are actually expert reports. I say this because I sometimes see reports that are set out like an expert report but conspicuously fail to use the term “expert”, provide a declaration, and so on. Are such reports meant to be part of the factual witness evidence, in which case they shouldn’t express opinions, or part of the substantive submissions, in which case they are part of a party’s advocated case? Surely if a party has appointed a specialist to give an opinion on, say, a pinion, they can give an expert declaration?