At times “unrestrained and rude”

A routine recommendation in witness preparation is to keep answers as short as possible, preferably to answer with a “yes” or “no,” if possible.  This case provides an interesting counter-view from the Bench: that “one-word answers” might reflect an unwillingness to “engage in meaningful dialogue,” potentially indicating partisanship.  The judgement dealt with expert evidence in considerable detail, and in doing so provides some rare and interesting insights about the impact of the demeanour of experts while they give evidence.

Background

The plaintiff (the Patient) had woken in extreme pain, lying on the floor on his left arm, with no recollection of how, or when, he came to be on the floor.

He called for an ambulance and was taken to hospital, where he underwent emergency surgery to relieve the severe swelling that had cut off the blood flow to his arm.

His recovery was long and complicated.  Despite several further surgeries he suffered significant muscle loss and nerve damage, and he took action against the hospital, claiming damages said to arise because of unacceptable delays in undertaking that initial surgery, heard in Toon v Central Adelaide Local Health Network, [2025] SADC 98.

The hospital argued that extensive, irreversible damage had already occurred well before his arrival at the hospital – which meant that earlier surgery would not have resulted in a different outcome. Complicating the determination of the facts was the Patient’s then “extensive drug use” which together with pain relieving medications post‑surgery pain levels meant that he did  not have a “clear and true memory of what occurred”.

Expert evidence

The Patient arranged expert evidence from two former experienced vascular surgeons.

The evidence given in Court by the First Expert varied from the evidence in his written report.  In two instances this was because he said, he had changed his opinion.  The Court explicitly declined to accept his evidence that “he ‘thought” he had communicated his change in opinion to his instructing solicitors, and noted that counsel “was taken by surprise by the change.”

Two other changes arose because the First Expert realised that he had incorrectly relied on information in his instructions, rather than the hospital records.

The Court found that his failure to provide a supplementary report to his instructors following his changes of opinion was a serious matter, and that his failure to advise his instructors of his amended opinions impacted his reliability and credibility as a witness.

It said that he:

was not an impressive witness. He was suspicious while being cross examined, and often combative. He at times attempted to guess what counsel was seeking in cross examination, rather than simply answering the question. His evidence was inconsistent in several areas. His attempts to cover up his changed opinions was not the behaviour expected of an expert witness. I find that I cannot rely upon [his], where it is not supported by other evidence.

The Court found that the Second Expert was:

reluctant at times to engage in meaningful dialogue, rather giving one word answers.”  He gave some evidence based on incorrect detail and was “combative and argumentative and did not always address the question put to him…at times unrestrained and rude in his responses to the respondent’s counsel…[and] not an impressive witness.

By contrast, the hospital’s expert was:

an impressive witness…[who] at all times, attempted to assist the court, including explaining and breaking down complex medical issues…[and] his answers were balanced, considered and were not partisan.

Outcome

The Court preferred the evidence of the hospital’s medical experts – that the damage had already been done by the time the patient was admitted to hospital, and found that there was no breach of duty of care.

The “Blazing Car Murder”

Some of my (busman’s) holiday reading was about the 1931 “blazing car” murder trial.

I would be surprised if many recognised the case name, but R v Rouse is the source of an often-quoted example of an expert who was completely discombobulated by a curly first cross-examination question, in this case: “what is the coefficient of the expansion of brass?”

The effect on the expert’s evidence was such that the jury was later instructed to consider the truth of his opinions “irrespectively of whether he appeared rather foolish” in giving them!

Background

Albert Rouse suffered serious injuries from his service in World War One. Following his return and his recovery from his wounds, he worked as a commercial traveller for a company selling braces.

In late 1930 Rouse took out a £1,000 life insurance policy naming his wife as beneficiary, and attempted to fake his own death by setting his car on fire.

He visited a lover (one of several, it transpired) immediately after the fire.

She identified the burnt-out car as his from a newspaper photograph, and contacted the police.  He was swiftly arrested, and charged with the murder of the unidentified man whose body was found in the car.

The circumstances were newsworthy in themselves, but the case attracted even more public attention following newspaper reports that Rouse had several children via at least three bigamous marriages, and that he had described his lovers as a “harem” and “an expensive game.”  It appeared that his plan to fake his death was an attempt to secure a ‘fresh start,’ free from obligations to financially support his children.

Rouse told the police that his car caught fire when he had stopped to answer a call of nature.  He said that he asked his passenger – a hitchhiker, whose identity he did not know – to fill the petrol tank from a jerry can, and speculated that the hitchhiker’s cigar had ignited petrol fumes, causing the fire.  He told police that he had tried and failed to rescue the passenger – somehow now trapped inside the car – and had then panicked, and fled.

A forensic examination identified a loose joint on a pipe between the fuel tank and the carburettor.  The prosecution case was that Rouse, apparently a handy amateur mechanic, had loosened the nut on the union joint to speed the flow of petrol.  The defence argued that the union nut was loosened by the fierce heat from the fire, and that no human agency was involved.

The Expert Evidence

Expert evidence was provided about the position of the body in the car – whether the body been placed in the car; the cause of the fire; and the loosening of the union nut, which is the focus here.

The expert whose confidence was so shattered by Birkett, Mr Isaacs, was not an expert as is normally engaged – rather, he was one of two “public spirited volunteers”[1] who came forward following newspaper reports of the evidence provided by the prosecution expert, Colonel Buckle.[2]  Buckle was an electrical engineer by training with extensive experience in fire investigation, who testified that the union nut was a “full turn loose,”[3] and that it was inherently unlikely to have become loose, accidentally.

Isaacs gave evidence contradicting the opinion of Colonel Buckle: that in his practical experience as an insurance fire investigator “it is invariably found at all fires that have been very intense that [such] nuts are loose.”[4]

The famous challenge to Isaac’s credentials is as follows:[5]

Birkett: “What is the coefficient of the expansion of brass?”

Isaacs: “I beg your pardon?”

Birkett: “ Did you not catch the question?”

Isaacs: “I did not quite hear you.”

Birkett: “What is the coefficient of the expansion of brass?”

Isaacs: “I am afraid I cannot answer that question off hand.”

Birkett: “If you do not know, say so. What is the coefficient of the expansion of brass? What do I mean by the term?”

Isaacs: “You want to know what is the expansion of the metal under heat?”

Birkett: “I asked you what is the coefficient of the expansion of brass? Do you know what it means?”

Isaacs: “Put it that way, probably I do not.”

Birkett: “you are an engineer?”

Isaacs: “I daresay I am.”

Birkett: “Let me understand what you are. You are not a doctor?”

Isaacs: “No.”

Birkett: “Nor a crime investigator?”

Isaacs: “No.”

Birkett: “Nor an amateur detective?”

Isaacs: “No.”

Birkett: “But an engineer?”

Isaacs: “Yes.”

Birkett: “What is the coefficient of the expansion of brass? You do not know?”

Isaacs: “No; Not put that way”

The question was unplanned – in “The Art of Advocacy” Birkett said:[6]

…whether it was inspiration or what it was I don’t know, but my first question in the cross-examination of the man certainly wasn’t in the brief. I said, “Tell me, sir, what is the coefficient of the expansion of brass?” And he didn’t know. I am not sure that I did, but he couldn’t ask me questions and I could ask him, and he didn’t know. And from that moment, of course, it was easy.

The other volunteer, Mr Cotton, was a colleague of Isaac’s, and he gave similar evidence.  Birkett asked him a similar question, which he dealt with more confidently:[7]

Birkett: “You know the coefficient of the expansion of metal?”

Cotton: “I am afraid I cannot answer that question.”

Birkett: “They are in any little diary that an engineer has. Have you got an engineer’s diary?”

Cotton: “Yes.”

Birkett: “Does it contain all the coefficients of expansion??”

Cotton: “Yes, But I do not study them.”

It is not clear whether the coefficient of the expansion of brass was an important issue.  Birkett’s acknowledgement that he did not himself know the answer to the question that he asked, suggests that it was not, and he did not raise the matter of the loose union nut in his closing speech.

In summing up Justice Talbot said:

I do not think anybody would say that Mr Isaacs made a very brilliant appearance in the witness box, but you may think, and probably will think, that that was mostly because he did not confine himself, as he more prudently would have done, to what he knew…but it does not mean that he is not telling me the truth about his experience. That is a matter which you might weigh quite irrespectively of whether he appeared rather foolish when he was tackled [about] the cause of this phenomenon.

Outcome

Rouse was found guilty.  That verdict was confirmed on appeal (which rejected extensive new evidence about the tendency of union nuts to loosen by themselves), and he was executed.  Prior to his execution he wrote a letter to a newspaper in which he said:[8]

Then I got out of the car, taking my attaché case, the can of petrol, and the mallet with me. I walked about 10 yards in front of the car and opened the can, using the mallet to do so. I threw the mallet away and made a trail of petrol to the car. I took the mallet away with one purpose in view. Also I poured petrol over the man and loosened the petrol union joint and took off the top of the carburettor. I put the petrol can back in the back of the car.

I ran to the beginning of the petrol trial and put a match to it. The flame rushed to the car which caught fire at once. Petrol was leaking from the bottom of the car. That was the petrol I had poured over the man and the petrol that was dripping from the union joint and carburettor.

The fire was very quick and the whole thing was a mess of flames in a few seconds.

His victim remains unidentified.[9]

Comment

Neither Isaacs nor Button (nor those providing new evidence for the appeal) were able to provide a scientific reason to explain the practical experience to which they testified.

Birkett dealt with Isaac’s evidence quickly and effectively – but it appears that he was dealing with a problematic opinion advanced by an inexperienced and under-prepared expert (if that), which may equally have been dealt with by a more orthodox cross-examination.

Notes:

[1] “The Trial Of Albert Arthur Rouse,” Helena Normanton, page xxxi.

[2] Normanton, page 241.

[3] Normanton, page 60.

[4] Normanton, page 241.

[5] Contemporary reporting from each of The Times and “The Trial Of Albert Arthur Rouse” Sydney Tremayne (at page 290); records a slightly different exchange to that recorded in Normanton at page 244 and shown here.

[6] 1048 The Canadian Bar Review 1947, (www.cbr.cba.org/index.php/cbr/article/view/1346).

[7] Normanton, page 253.  Tremayne (page 296) does not record the question being put to Cotton, but The Times does.

[8] Normanton, Appendix II, page 297.

[9] See https://www.bbc.com/news/uk-england-northamptonshire-33426167.

Expert evidence – “bordered on the absurd”

Background

The National Credit Code (the Credit Code) applies to credit provided wholly or predominantly for “personal, domestic or household purposes.” In practical terms, purpose is established by a borrower declaration – unless the declaration is found to be ineffective.

This case dealt with two specific loan transactions.  ASIC said that the two borrowers had lied in making those business purpose declarations – to access credit more readily available to unregulated borrowers – and that the lender would have detected the false declarations if it had made reasonable inquiries.  More significantly for the sole director, ASIC said that those bad lending outcomes evidenced a failure to take appropriate steps to ensure that the company did not contravene the Credit Code, which meant that the sole director had breached her statutory duty under s 180(1) of the Corporations Act.

A complex theoretical framework

Central to ASIC’s case was a long report from a credit expert, which set out a detailed business management framework said to be applicable to all business lenders.  The framework extended well beyond credit management, into general business and human resources management.

The Court described the Report as creating “the very real impression that [the expert] had essentially constructed in his own mind, based on his experience, an ideal sense of the Execution Framework and Minimum Requirements he considered were “necessary” for every lender to have in place, irrespective of its particular circumstances.

Size does matter

The Court described the expert’s Execution Framework as proposing a gold standard, because it did not allow for adjustment to suit the circumstances of the lender, or the size of the loan.

The Court held that requiring a gold standard approach for a business seeking a loan of $2,000 was “as counter-intuitive as it is entirely unrealistic” and said that “there was considerable force” in submissions that “some of [his] opinions, with respect, bordered on the absurd” for example, requiring an applicant for a $2,000 loan “to prepare a detailed business plan…including an explanation of how the business will be marketed, including target market and pricing; a market analysis; staffing; a budget containing forecast revenues and costs; provision for premises including a lease agreement; and evidence of the equipment needed to undertake the business.”

Conclusions on the expert evidence

The Court noted that the expert had only been involved with one comparable business – an un-identified start up business – and that there was no evidence that any Australian non-bank small business lender followed any of the policies and procedures that he identified as necessary.

In terms of his evidence, in ASIC v Green County Pty Ltd [2025] FCA 367 the Federal Court held that:

  • It was “unsatisfactory and less than compelling in several critical respects…of low weight and [providing] little assistance.”
  • His opinions “did not seek to differentiate between lenders depending on the relative cost and burden.
  • He “demonstrated a willingness to express definitive conclusions which did not withstand scrutiny when tested by reference to the particular circumstances.”
  • Some of his opinions “took a particular example to an extreme conclusion” – most notably expressing broad conclusions about the management of a portfolio of many thousands of loans, based on a review of only three loans.
  • He “was prepared to express inflexible and single-minded opinions in his report from which he was only willing to resile in limited respects (and even then, only reluctantly) when met with logical propositions countering the extremities of his opinions.”

Outcome

The Court held that the lender had breached the Credit Code, but dismissed the claims against the director, finding that although “[the lender] should have done more by way of reasonable inquiries…and that more generally [its] systems and training could have been better,” ASIC had not established the specific pleaded case that it brought.

Another for the trainwreck collection

Background

A husband and wife sought compensation for “debilitating and lifelong” respiratory system injuries due to exposure to toxic chemicals from the installation of spray polyurethane foam (SPF) insulation in their home.

They said that the Installer failed to ensure that they were absent from the house during installation, and failed to ensure that the house was properly ventilated post the installation.

The Installer accepted that the chemicals involved were highly toxic – his staff were required to wear a full protective suit with breathing apparatus – and also that the claimants suffered from Reactive Airways Dysfunction Syndrome (RADS) as diagnosed – but disputed negligence and causation.

The Installer’s defence relied heavily on the evidence of an expert toxicologist – which was rejected in its entirety, and the plaintiffs won substantial damages.

The Installer appealed, arguing that the trial Judge was wrong to exclude all of the Toxicologist’s evidence, given that it was uncontradicted by the plaintiffs.

“Hired Gun” experts

In Duffy v Brendan McGee & Anor [2022] IECA 254, the Irish Court of Appeal set out the importance of expert impartiality, and commented on the challenges posed by the use of so-called “hired gun” experts:

Very frequently, the evidence of the expert will be decisive to the outcome, particularly where, as here, there are complex scientific or medical issues arising.  Some of the most high-profile miscarriage of justice cases have arisen from serious failures on the part of experts.  It is right therefore that the law expects and demands the highest standards of experts.  This has found expression in many judgments and more recently, rules of court.

Unfortunately, the hired gun syndrome is one with which all lawyers are familiar and is perhaps an inevitable by-product of adversarial litigation…It may be an overstatement to say that one can always get some expert to subscribe to one’s point of view, but there is nothing to prevent litigants with deep pockets consulting any number of experts until one is found who will support the case being made.  As matters stand, there is no obligation to disclose such information to an opponent.

The Evidence of The Toxicologist

The Appeal Court identified several concerns with the Toxicologist’s evidence, including:

  • “…rather extraordinarily” he had purported to give an opinion on Irish law which was “entirely beyond his competence and entirely inappropriate for a supposedly independent expert.”
  • He did not rely on his own research or expertise, but rather on two papers which were not independent peer reviewed scientific papers.
  • His evidence was predicated on the Installer’s instructions on strongly disputed crucial issues, and he “made no attempt to consider, and evidently avoided considering, any alternative scenario.”
  • He repeatedly accused the plaintiffs of lying, “referring to their evidence as deception and misrepresentation” and “steadfastly refused to withdraw his allegations of deception” despite clear evidence to the contrary.
  • He purported to give a medical opinion on psychiatric and skin complaints, “an area clearly outside his competence and advanced for no obvious purpose other than attempting, again improperly, to undermine the plaintiffs’ case.”
  • He relied upon documents from the EPA to support his arguments but in cross-examination “sought to disavow the documents, saying the EPA was wrong.”
  • He gave evidence that was contradicted by his own statements in a podcast interview titled “SPF Lawsuit Avoidance” (which is still accessible via youtube).

The Court concluded:

“…any one of these matters on its own would tend to strongly suggest an absence of objectivity and impartiality on the part of [The Toxicologist], but taken in combination, can only be described as a wholesale abdication by [The Toxicologist] of his duty as an expert witness.  I share the trial judge’s experience of never having encountered such an approach to giving evidence by an expert witness before our courts.  [The Toxicologist] impermissibly donned the mantle of a partisan advocate in his efforts to discredit the claim of the plaintiffs.

It is simply not possible to adopt some kind of curate’s egg approach to this evidence, as counsel for [the Installer] suggested, and I am satisfied that the trial judge was perfectly correct to exclude [the Toxicologist’s] evidence in its entirety.  There was in this case such an abject failure to comply with the most basic obligation of an expert, namely, to be objective and impartial, as to render all of [the Toxicologist’s] evidence inadmissible.”

Comment

There is no obligation to disclose “expert-shopping” in Ireland, which is true for most jurisdictions.  The South Australian District Court has an anti-shop framework – a party seeking an expert report must provide a copy of the instructions to the other parties (Uniform Civil Rules 2020, rule 74.2), and parties must share copies of all expert reports, whether they intend to rely upon them, or not (rule 74.3) – but I’m not aware of anything similar in any other jurisdiction. 

Mr Bates and the Experts

A big story compressed into three hours of television means something gets squeezed out – so you can watch the excellent BBC series Mr Bates vs the Post Office (released in Australia in February 2024) without realising that expert evidence played a key role, or that the evidence of one expert was subject to very severe criticism.

Background

Each month UK Post Office sub-postmasters (effectively franchisees, the SPMs) were required to input details of stock and cash on hand into an accounting system called Horizon, owned and operated by an IT company, Fujitsu. 

Those actual figures were compared to the amounts that the Horizon system calculated as expected balances. If the actuals were less than the expected balances, Horizon identified the difference as a shortfall, which SPMs were contractually required to make up – presumably on the assumption that a shortfall reflected either a cash withdrawal from the till, or a sale that had not been correctly processed through the till.

Some of the SPMs were prosecuted for theft because they did not (or could not) pay the shortfall amounts that Horizon calculated.  Some of the SPMs were prosecuted for false accounting because they entered incorrect details into Horizon, to reduce the amount that they would be required to contribute.

Affected SPMs formed an action group, They argued that Horizon was not a robust and universally accurate system, and that it produced incorrect information which should not have been relied upon, especially for criminal prosecutions, and initiated a class action against the Post Office

Expert Evidence issues

Bates & Ors v the Post Office Ltd (No 6: Horizon Issues) [2019] EWHC 3408 (QB) was a separate hearing, dealing solely with the operation and functionality of the Horizon system itself, and so the role of  IT experts was critical to the outcome.

Each expert witness had substantial industry experience, and significant experience as an expert.  They prepared separate reports, supplementary reports, and then worked together to produce four joint reports.

“Shadow Experts”

The Post Office cost budget allowed £500,000 for experts who, notably, were instructed directly by the Post Office – not their solicitors or counsel – and who would not actually be giving evidence.

The Court said that direct instruction by a party was “a highly unusual situation,” and that estimated costs “were extraordinarily high, unreasonable and disproportionate,” which “did not, on the face of it, appear to be properly recoverable sums in the litigation.”

Direct Communication with the trial judge

The Post Office Expert prepared a second supplementary report, which he sent direct to the court, by email, after the trial had commenced.

The Court said that it was “extremely unusual, if not verging upon unheard of” for an expert witness to communicate directly with the trial judge rather than through the solicitors that engaged them. 

Although experts have a positive obligation to prepare a supplementary report if they change their opinions, in this case the Court held that the report was not due to a change in opinion, but rather an attempt “to bolster” existing conclusions.

Criticism of the Post Office Expert

The Court was not “universally critical” of the Post Office Expert.  It was careful to note that he had performed “a substantial amount of detailed analysis in his two reports” and played his part in significantly increasing “the overall knowledge that the court had.”  It recorded that he had also “discovered some bugs himself…[and] also took a sensible and considered view of some elements of the documentation,” and that his agreement in the Joint Reports had “saved a considerable amount of court time.”

Nonetheless, there was severe criticism of the Post Office Expert:

  • His methodology was “wholly flawed…and obviously so,” using reasoning that was “entirely circular.”
  • His analysis was “so riddled with plainly insupportable assumptions as to make it of no evidential value. It is the mathematical or arithmetic equivalent of stating that, given there are 3 million sets of branch accounts, and given there are so many sets of branch accounts of which no complaint is made, the Horizon system is mostly right, most of the time. It is a little more sophisticated than that, but not by very much.”
  • He “took a partisan view of the evidence of fact…an obvious preferring of the evidence of fact of the party instructing him, added, in this case, to a refusal or failure to accept further evidence of fact to the contrary which subsequently emerged.”
  • He relied “heavily” upon information from a Fujitsu executive whose involvement in the report “was simply hidden…[without] a note or summary of all the information that” the executive had provided.

Outcome

The Claimants were successful in that decision, the last of the reported judgements. 

In 2019 the Post Office agreed to pay compensation of £58m to the claimants. In 2021, the UK Government initiated a statutory inquiry by a retired high court judge, which is still underway.  In January 2024 the Government announced an intention to pass legislation to squash the SPM convictions, and passed legislation to set up a compensation scheme for the affected SPMs.

“As far removed from serious, credible expert evidence as I find it possible to imagine”

An apparently successful property developer turned out to be a “conman and a forger.”  After the collapse of his £600m property empire, he and an accomplice were prosecuted for fraud, convicted, and sentenced to lengthy prison sentences.

Some years later, in his capacity as the beneficiary of a purported trust, the conman’s son took legal action against his father and the lender to the property empire (which lost at least £150m).

The court held that all the claims had failed, on multiple grounds: it did not accept the existence of the claimed trust;  it held that the litigation was an abuse of process because the real litigant was the conman father, who had manipulated his son (and about whom it said “the extent of his dishonesty is astonishing, and some of the individual charades in which he engaged are almost comical”); and, finally, that the actions of the lender did not in fact cause any loss.

Before arriving at those conclusions, the role and evidence of a banking expert was the subject of severe criticism, which is the focus here.

Which expert, by whom engaged?

The son was given permission for expert evidence “in the field of real estate valuation” – limited to the issue of the best price reasonably obtainable for the portfolio properties, at the time of their sale by the lender.

The father sought permission to submit an expert report “relating to [the bank’s] banking misconduct.” When that application was refused, the banking expert proposed for the father’s report on banking misconduct was engaged by the son to prepare the real estate valuation report for which permission had been given.

Should the expert have accepted the engagement?

On the question of whether the banking expert should have accepted the engagement, it was said:

[205] [the banking expert] should not have been asked to give expert evidence…He was not competent to do so. Having been asked, he should have declined to assist, recognising that he was not an expert in the field of expertise from which expert evidence had been permitted. In a rare moment of concession, [the banking expert] said in answer to my direct question that had he been told that [the son] had been given permission to provide expert evidence in the field of real estate valuation…‘I would say go for a – go for a working chartered surveyor.’

The expert’s evidence

On the evidence actually given by the banking expert, it was said:

[206] Having thus failed in his most basic duty to the court to ascertain whether he was competent to provide the kind of expert evidence for which the court had granted permission, in my judgment [the banking expert] presented an ill-reasoned and for the most part obviously unsustainable or irrelevant argument about the case that had very little to do with the issue…His opinions did not withstand serious scrutiny, he declined to make obviously appropriate, reasonable concessions, and I regret to say that on a number of occasions, I was left in no real doubt that [the banking expert] was making his evidence up as he went along, which involved him not telling the truth to the court about how he had derived some of the opinions he had expressed in writing.

[215] In re-examination, in response to an obviously loaded series of questions…[the banking expert] invented [a]  thesis…[216] …about as far removed from serious, credible expert evidence as I find it possible to imagine.

The (lengthy) judgement is available here: Kallakis v Kallakis & Ors [2023] EWHC 2148.

New angle on New Aim

In an earlier blog I wrote about the decision in New Aim Pty Ltd v Leung [2022] FCA 722, a decision in which the Federal Court rejected an expert’s written and oral evidence in light of the extent of lawyer involvement in the drafting of the expert’s report.

Background

Apparently prompted by what was described as a “remarkable” timeline – a sixteen page report delivered on the day after the expert has received the letter of instruction, the Court paid careful attention to the process by which the report was prepared.

The Court found that “most of the report was, at least initially, the product of drafting by the lawyers” that was “well beyond permissible guidance” and meant that the Court could not be satisfied that the opinions in the report “truly represented the expert’s honest and independent opinions” – and concluded that the report should not be admitted.

The Appeal

In New Aim Pty Ltd v Leung [2023] FCAFC 67 the Full Court held:

  • A question might not “be formulated at the time the expert [is] first retained – and in fact might be finalised after discussing the issues with the expert.
  • The issue of a final letter of instructions containing the final form of the questions to be answered by an expert, shortly before an expert report is finalised, was in fact “a common occurrence.”
  • Ordinarily a report would be drafted by the expert, but there were circumstances such as “physical, language or resource difficulties” in which the legal practitioner’s involvement might be appropriate.
  • The primary judge had “erred in rejecting the entirety of the evidence of [the expert].”

The appeal was successful.

Compensation ordered against expert witness

Introduction

A “group proceeding” legal action against the auditor, directors and trustee of a failed non-bank lender was settled for $64m, subject to approval by the Court. The Court of Appeal approved the overall settlement and asked the Victorian Supreme Court to review the legal costs as well as the amount of commission claimed by a litigation funder.

What presumably began as a routine approval process uncovered matters which gave rise to very serious concerns about the conduct of the solicitor and the barristers (“the Lawyers”), the litigation funder, and the Legal Costs Expert engaged to express an opinion on the reasonableness of the legal fees.

The Bolitho v Banksia Securities Ltd (No 18) [2021] VSC 666 judgement is long, and the facts are complex.  Others will focus on the duties owed by the Lawyers, but as someone undertaking expert witness work, I am very interested on the issues that resulted in an expert witness being ordered to pay compensation!

The Expert Witness

The Legal Costs Expert witness had issued four reports expressing the opinion that the claimed legal costs “were fair and reasonable,” before issuing a fifth report in which he withdrew those opinions and claimed that he had been misled.

The Court agreed that the Legal Costs Expert had been misled by “grossly improper” and dishonest conduct by which false evidence was “manufactured” to support the barristers’ fee claims, but it made swingeing criticisms of the expert nonetheless:

  • Inadequate disclosure of previous engagements – The Legal Costs Expert did not appropriately disclose previous engagements involving the barristers, which were relevant to an assessment of his independence, and he did not draw the Court’s attention to his limited experience in large commercial litigation, and specifically, group proceedings.
  • Breach of duty to assist the court impartially – The Legal Costs Expert did not undertake a proper independent objective assessment of the facts he was asked to assume, and he failed to seek further evidence or information when he should have done so. His claim that he had complied with the Expert Code of Conduct in this regard, when he had not, misled the Court.
  • Failure to apply specialised knowledge – His reports did not demonstrate the application of any expertise or specialised knowledge. He adopted a “formulaic approach” and did not satisfy himself that the time claimed was both actually spent and reasonably spent – as demonstrated by his failure to identify duplicated work and charges.
  • Failure to promptly respond to new information – Despite becoming aware of material new information the Legal Costs Expert did nothing to correct the misleading statements in the reports that he had prepared until “the eve of the trial” when he issued a fifth report that recanted his earlier opinions. Even then, the fifth report did not “confront the reality that [the expert] had, by his third report, misled the court.”

Conclusion

The Court held that the Legal Costs Expert had breached his duties to the Court and that those breaches “materially contributed” to the loss suffered by investors.  Together with the other parties, the Legal Costs Expert was ordered to pay compensation of $11.7m and to also pay costs on an indemnity basis.