Parties beware: control communications with experts to keep litigation on track
The judgment in Dana UK AXLE Ltd v Freudenberg FST GmbH  EWHC 1413 is a salutary reminder of the importance of full compliance with the rules around instructing experts and controlling communications with those experts throughout the litigation.
Part way through trial in the Technology and Construction Court (TCC), Smith J granted the claimant's application to exclude the defendants’ technical expert evidence following a finding that there had been ‘serious and unexplained’ breaches of a pre-trial review (PTR) order, as well as breaches of CPR 35, PD 35 and the related 2014 Guidance for the Instruction of Experts in Civil Claims (2014 Guidance).
The claimant (Dana) had brought proceedings against the defendant (FST) following the alleged failure of pinion seals manufactured by FST and supplied to Dana, a manufacturer and supplier of automotive parts. Dana had fitted the seals to vehicle rear axles which were then supplied to Jaguar Land Rover for installation into vehicles.
Dana had pointed out a number of defects in FST’s technical expert reports, including that:
- The reports failed to identify many of the documents on which each of FST's experts had relied, contrary to paragraph 55 of the 2014 Guidance.
- Two experts' reports revealed that the experts had undertaken site visits to factories operated by FST which had taken place without notice to Dana.
- The reports did not always cross-refer to the evidence relied on.
At the PTR, the court made an order (PTR order) permitting FST to rely on its three technical expert reports at trial, provided they were amended to comply fully with the CPR and 2014 Guidance. The PTR order required FST to (i) provide a full list of all materials provided to each of its experts; (ii) disclose all documents produced by, or provided to, each expert during the site visits, including any notes taken by the expert of information provided to the expert or seen by the expert during those visits; and (iii) identify the source and details of the information relied on in the reports.
FST’s response to the PTR order
FST served revised reports from two experts, together with lists of the documents on which each expert had relied but failed to provide a list of all the materials provided to its experts. In particular, it did not address whether FST’s experts had been provided with anything else in addition to the disclosure documents, or whether any other documents had been produced by the expert or provided to him during the site visits, and whether he had retained such documents.
Dana raised targeted CPR 35 questions with FST’s experts with a view to addressing the above issues. Shortly after, FST provided new disclosure including evidence of information being supplied directly and unilaterally by FST to its experts.
Trial & Dana’s application to exclude FST’s evidence
In opening submissions at trial, Dana reiterated its concerns on the defendant’s expert process, following which Smith J directed FST’s solicitors to provide a witness statement explaining the extent of any contact between FST and its experts and details of all information and documents passed to those experts. This led to the disclosure of a further 175 documents evidencing direct communications between FST and its experts.
Against that backdrop, Dana applied on day 5 of trial for an order to exclude FST’s technical expert evidence on the grounds that FST had: (i) failed to satisfy the conditions imposed by the PTR order; and (ii) failed to comply with CPR 35, PD 35 and the 2014 Guidance, in respect of the instruction of its experts and its interaction with them.
Smith J held that FST and its experts had acted in serious and unexplained breach of the PTR order and accordingly refused FST permission to rely on the three reports. She further concluded, obiter, that their conduct constituted particularly serious breaches of CPR 35, PD 35 and the 2014 Guidance which would have been sufficient in themselves to justify the court excluding the relevant reports.
In reaching her conclusion that FST breached the PTR order, the judge made the following key observations:
- The experts had “unfettered and unsupervised access to the Defendant’s personnel” and were provided with information by FST during calls and meetings which was never provided to Dana’s experts or otherwise identified. Smith J, referring amongst others to CPR 39.5 and paragraphs 30-32 of the 2014 Guidance, noted that it was “essential for the court to understand what information and instructions had been provided to each side's experts, so that it was clear whether they were operating on the basis of the same information and, therefore, on a level playing field. Experts should be focused on the need to ensure that information received by them has also been received by their opposite numbers.”
- It was "entirely unacceptable" for Dana and the court to have discovered at trial that FST's experts had not only engaged in site visits about which they did not inform Dana's experts at the time, and in respect of which they had apparently kept no records, but also that there were more site visits than had previously been disclosed in their reports. Smith J observed that FST had ignored paragraph 13.3.2 of the TCC Guide, which provides that experts need to "co-operate fully" with each other, including "where tests, surveys, investigations, sample gathering or other technical methods of obtaining primary factual evidence are needed". This was a manufacturing defect case in which FST had unique knowledge of its own manufacturing processes, and no factual witness evidence was provided on those matters, so it was particularly important that a level playing field was maintained between the experts on both sides.
In terms of breaches independent of the PTR order, the following comments by the judge are of particular note as regards the interpretation of the rules:
- There had been a "free flow exchange of information" between the experts and FST’s employees which also continued between the joint expert meetings and the signing of the experts' joint statement. Pursuant to paragraph 13.6.3 of the TCC Guide, legal advisers should not be involved in the negotiating and drafting of joint statements and it followed that the same prohibition applied to the parties.
- In response to FST’s submission that there was a distinction between material instructions (the substance of which must be set out in the expert’s report pursuant to CPR 35.10 and paragraph 3.2(3) of CPR 35 PD) and non-material instructions which the expert may have received but need not refer to in his or her report, the judge observed that the contact between FST and its experts in this case was so extensive and lacking in control that she could not possibly determine that it involved nothing more than the provision of immaterial information. Further, the very fact that the provision of information appeared to have taken place behind closed doors, without the involvement of solicitors and without any adequate records being kept, supported the inference that the information being discussed was material.
This hard-hitting judgment is a clear reminder of the importance of full compliance with the CPR when it comes to instructing and communicating with experts. It illustrates that direct, unsupervised interaction between parties and their experts can seriously compromise the parties’ position in the litigation. In the words of Smith J, “the establishment of a level playing field in cases involving experts requires careful oversight and control on the part of the lawyers instructing those experts”; this includes ensuring that lawyers are present during meetings and calls between clients and experts and that detailed contemporaneous records are kept of any such exchanges.