Summary
The Claimant alleged that the Defendant was in breach of the agreement between the parties for the supply of single alpha chain collagen. The judge was critical of the Claimant’s expert witnesses, in particular noting that he would have had to direct further accounting expert evidence be produced, if the evidence had been required.
Learning points
Learning points for instructing parties
Learning points for experts
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Make sure you set out the information you have relied on and show your workings so that the court can understand how you have reached your conclusions.
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Ensure that all the assumptions you have made in forming your opinion are either clearly set out in your report or in the instructions included with the report.
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Try to obtain the actual numbers (e.g. numbers of sales) before choosing to rely on assumptions.
The case
The Claimant alleged that the Defendant was in breach of the agreement between the parties for the supply of single alpha chain collagen because the collagen:
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had a microbial content which exceeded the contractually agreed specification, and/or
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was not validly tested against the agreed contractual specification under the Agreement, and/or
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was unfit for purpose.
The Claimant claimed that the Defendant was liable for £7 million, which represented the profits it would have made if it had been sent the correct amount of compliant collagen.
The expert witnesses
Both parties served expert evidence in microbiology, from Dr W for the Claimant and Mr K for the Defendant. The microbiological evidence was directed at whether the supplied collagen had:
The Claimant also served expert evidence from an accountant, Mr H, on the quantification of the claimed loss in profit. The Defendant did not adduce expert evidence on this issue.
Additional material provided to the Claimant’s experts
The judge noted that both of the Claimant’s experts appeared to have had discussions with the key representative of the Claimant in which they were provided with additional information on which they then relied. This information was not set out clearly in their expert reports or in the joint statement. As a result, the basis on which the experts had reached their conclusions was not always evident. The judge noted that his was unsatisfactory and that if an expert is provided with additional factual material or assumptions on which to rely, it is important for this material to be clearly identified both to the other party and the court.
The microbiology experts
The judge noted that, although they were seeking to assist the Court, both microbiology experts were hampered by the fact that they were having to give an opinion about the nature of the reformation without having been able to see or test the relevant batches of the Product or review the results of tests for reformation carried out at the time.
The accountancy expert
Although the judge found that the Claimant was not entitled to a claim for loss of profits, he set out his concerns with Mr H’s evidence.
In preparing his reports, Mr H had made a number of assumptions. The judge was not clear what those assumptions were as they were not set out in the reports or contained in any letter of instruction appended to the reports.
Mr H also relied on assumptions about the number of sales rather than actual sales. He made “ambitious assumptions” about future sales, which would have benefited from the use of actual sales data.
The judge noted that:
“In these circumstances, I would not have accepted [Mr H’s] figures or methodology but would have directed further expert evidence to be produced to deal with the issues I have identified. I considered whether the correct outcome would have been simply to reject [the Claimant’s] evidence, but this would have been too extreme a measure given that further calculations would have been required in any event as the amount of additional Product which [the Claimant] would have had available was less than in any of [Mr H’s] projections.”