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Risk Watch: The importance of keeping your experts independent
KATE MARCUS, RISK & CLAIMS SOLICITOR, LAW CLAIMS
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The recent Federal Court case of New Aim Pty Ltd v Leung [2022] FCA 722 serves as a timely reminder as to the importance of the independence of experts and how interference from the solicitor instructing the expert can have a consequence of the entirety of a report being rejected. In this case it was further found that the entirety of the oral evidence provided by the expert should also be rejected. Consequently, the applicant was unable to prove a central issue in the dispute, and the applicant’s case failed. The case also serves to remind practitioners that experts have a paramount duty to remain independent and assist the courts impartially.
FACTS
New Aim Pty Ltd (the applicant) conducted a large-scale e-commerce business in Australia and sourced its products from a range of suppliers in China. The claim centred on the use of confidential information acquired by former employees during the course of their employment with the applicant and which had allegedly been provided to the other respondents. It was claimed that there had been a breach of the ex-employees’ equitable and other obligations not to reveal or use confidential information acquired during the course of their employment.
Queries in relation to independence of witnesses arose during the course of the trial. Ms Fangyun (Lindy) Chen was engaged as an expert witness for the applicant on account of her relevant industry experience and knowledge. Whilst her evidence was objected to by the respondents the Judge admitted her report dated 8 March 2022 after ruling on the objections to it. The judge subsequently however rejected each of the statements of fact and the expression of opinions contained in the report.
Attached to Ms Chen’s witness statement of 8 March 2022 was her initial report. The witness statement indicated that the purpose of her engagement was to act as an independent expert witness engaged by the law firm Corrs for the applicant in the proceeding. The witness statement said, in part:
“When I was retained, Corrs provided me with a copy of the Federal Court of Australia Expert Evidence Practice Note (GPNEXPT), which includes the Harmonised Expert Witness Code of Conduct (Code). I confirm that I have read, understood and complied with the Code in providing expert assistance in the proceeding (including in making this witness statement), and agree to be bound by it. A copy of the Code is annexed to the retainer letter I received from Corrs on 21 February 2022...” [at 46]
Attached to the witness statement were a number of documents which included a retainer letter from Corrs dated 21 February 2022, an instruction letter from the firm dated 7 March 2022 and her expert report dated 8 March 2022 (i.e. the day after receiving the letter of instruction). The ability of Ms Chen to produce a detailed expert’s report which comprised 16 pages and 60 paragraphs within such a short timeframe was queried.
During cross-examination, Ms Chen initially indicated that she had prepared the report “within 24 hours”, but then disclosed that she had “a couple of conversations” with the applicant’s solicitors in the months prior to her letter of instructions. She further indicated that she had forwarded drafts of her proposed report for comments and that she had received comments from the applicant’s solicitors during a video conference. She conceded that she had received emails suggesting that she make changes to her draft report and in fact that portions of her report had been drafted for her. In further cross-examination Ms Chen accepted that her report was in fact a collaboration between her and the applicant’s solicitors.
REJECTION OF EXPERT EVIDENCE
Justice McElwaine indicated that in some circumstances it may be appropriate for an expert’s report to be settled in admissible form by someone else. This may arise if an expert is unfamiliar with the form and content requirements for an expert report. His Honour further indicated that the fact that an expert witness may agree with a form of words put to them may not detract from the expert’s independence or the reliability of the opinion expressed in some circumstances [at 61].
In this matter however Justice McElwaine said he was left in a state of uncertainty as to who was responsible for the drafting of which portions of Ms Chen’s report, and that it appeared
that most of the report was the product of drafting by the lawyers. The evidence indicated that
“most of the report was, at least initially, the product of drafting by the lawyers for the applicant, albeit in reliance upon some material of a non-specific nature that Ms Chen provided to the lawyers” [at 70]
Accordingly, Ms Chen’s report was rejected on the basis that it could not be relied upon. His Honour was not
“satisfied that the opinions expressed in the report by Ms Chen truly represent her honest and independent opinions and that no matters of significance [had] been withheld.” [at 77].
As a consequence, his Honour rejected all opinions and other factual material as set out in Ms Chen’s report of 8 March 2022. This had flow on consequences as to whether findings of fact could be made based on Ms Chen’s oral evidence. Justice McElwaine determined
“I have no confidence in the ability of Ms Chen to give credible, untainted and independent evidence and it would be quite wrong for me, having rejected the entirety of her written opinion evidence, to then proceed on the basis that I may, selectively, make findings of fact in accordance with her oral evidence. I cannot have confidence that her oral evidence was untainted by the factual material and the opinions expressed in her written report and the manner of its preparation. I will not make any finding of fact based on any of her evidence.” [at 78] CONCLUSION
His Honour concluded that the case “went far beyond the permissible scope of involvement of lawyers who retain an independent expert in order to give evidence in a proceeding.” [at 76]
As a result, the applicant had insufficient evidence to prove its case and its action was dismissed.
On the issue of disclosure, he also added that:
“Even if in some circumstances it is proper for lawyers to draft an independent expert witness statement for consideration by the putative expert, that fact must be disclosed in the expert report. Moreover, all correspondence relating to the manner of preparation of the report should be disclosed and, to the extent that oral advice is conveyed to the expert, the substance should be documented and disclosed.”
Justice McElwaine emphasised the importance of ensuring experts’ independence and reiterated (by reference to the Federal Court’s Expert Evidence Practice Note and the Harmonised Expert Witness Code of Conduct) that an expert witness is not an advocate for a party and has a paramount duty to assist the Court impartially. Here, he considered the requirement of impartiality was “substantially undermined” by the applicant’s failure to disclose the methodology of preparation of the expert report. He also held that the lawyers’ conduct was “misleading”, given their letter of instruction dated 7 March 2022 suggested Ms Chen would prospectively consider the questions raised therein, whereas the lawyers at the time were already aware of the answers and the form in which they would be expressed. The consequences for the lawyers involved are unknown, but it would not be surprising if the applicants, having had their case dismissed because of the lack of admissible evidence, sought to make a professional negligence claim against their solicitors. Key takeaways • experts have a paramount duty to remain independent and assist the courts impartially; • expert evidence should be, and should be seen to be, the independent product of the expert, uninfluenced by the engaging solicitors; • solicitors may assist experts to express opinions effectively and in accordance with evidentiary requirements, however an expert’s evidence must be the expert’s own opinions; • it is important that all dealings between solicitors and experts are transparent and that all relevant communications are disclosed; • solicitors must not invite the expert to misstate facts or proffer opinions not honestly held by the expert. Likewise, a solicitor should not influence the expert such that the report and potentially the expert’s evidence loses independence; • if a court determines that determines that an expert report has been prepared beyond a permissible scope of solicitor involvement, then the court may reject the report. This may also see the oral evidence of the expert deemed tainted and similarly rejected.
