Summary
The judge found that the report by the claimants’ forensic accounting expert was not expert evidence because it simply reported what the underlying documents said in a more digestible way, without adding any expert opinion. On the one or two occasions where the expert did offer an opinion, they were not opinions on any accountancy matter.
Learning points
Learning points for new or occasional experts
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You must only provide opinion evidence in respect of matters on which you have sufficient expertise and, where necessary, appropriate qualifications.
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Expert evidence must include the opinion of the expert. Evidence which simply reports what the underlying evidence says is not expert evidence.
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If you are not confident that you fully understand your duties as an expert witness, you should consider seeking training from a reputable provider, such as EWI.
Learning points for instructing parties
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Experts who have not undertaken training with a reputable provider, such as EWI, may not fully understand their duties. They may not even understand the concept of expert evidence.
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If you have any doubts about an expert, make sure to assess whether they understand their duties.
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Make sure that your instructions clearly set out the expert evidence that is required.
The case
The main issue in the case concerned monies paid to the defendants by the claimants. The claimants maintained that these monies were for the purposes of investment by the defendant on their behalf, and the defendants that they were for the purpose of settling a debt incurred by the claimants’ father. The matter was complicated by the first defendant’s being adjudicated bankrupt, and administrative receivers appointed for the second and third defendants, which were companies formerly controlled by the defendant.
The expert evidence
Both parties received permission to adduce forensic accounting evidence with the experts directed to prepare reports, hold a joint meeting and produce a joint statement. The claimant adduced expert evidence from Mr C, a chartered accountant and a partner in the Forensic Services Team at Crowe UK LL. However, as the defendants chose not to adduce expert evidence, the joint meeting and statement were not required and the judge decided that Mr C would not need to attend for cross-examination.
The forensic accounting evidence
In his report, Mr C considered the documentary evidence available to the claimants, including records of the bank accounts held by the defendants, and summarised the available evidence:
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of payments made by the claimants to the defendants,
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of the purchase of the three properties with which the claimants are mainly concerned,
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(of the costs of the renovation of those properties,
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tracing the flow of funds from the claimants through the defendants’ hands and onward into particular applications of funds, and
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of rental income earned by those three properties.
The judge noted that this was a classic exercise in forensic accounting and was well presented. However, except in a couple of insignificant respects, it was not expert evidence. Instead, it was, at best, hearsay evidence of fact because the underlying documents were the primary evidence, and Mr C was simply reporting what they said, in a more digestible way. In doing so, he was not adding any expert opinion of his own.
The principles of expert opinion evidence
The judge chose to go back to first principles to explain what expert opinion evidence is. Expert evidence is an exception to the general inadmissibility of opinion evidence. Section 3(1) of the Civil Evidence Act 1972 states:
“Subject to any rules of court made in pursuance of … this Act, where a person is called as a witness in any civil proceedings, his opinion on any relevant matter on which he is qualified to give expert evidence shall be admissible in evidence.”
Therefore, expert evidence within section 3 can only be tendered by a person who is qualified as an expert. The judge in Barings plc v Coopers & Lybrand [2001] PNLR 22, [45] noted that this is someone who “satisfies the court that he has a sufficient familiarity with and knowledge of the expertise in question to render his opinion potentially of value in resolving any of” the issues of the case. Although, the expert does not necessarily have to possess formal qualifications, and practical experience may be sufficient.
The expertise in question must be “a recognised expertise governed by recognised standards and rules of conduct capable of influencing the court’s decision on any of the issues which it has to decide” (Barings plc v Coopers & Lybrand [2001] PNLR 22, [45]; see also The RBS Rights Issue Litigation [2015] EWHC 3433 (Ch), [13]-[14]).
The judge also noted that someone who does possess a recognised expertise is an expert for this purpose only when giving an opinion within that expertise.
Application of these principles to the case
While the judge accepted that Mr C was an expert in the sense described above, his report was not done in the exercise of any “recognised expertise governed by recognised standards and rules of conduct” etc. He reviewed the available documents, extracted the relevant information and reorganised it into a more digestible form. While this was useful to the court, it did not amount to expert evidence of anything. The judge noted that it might have been different if Mr C had included in his report comments and criticisms of accounting statements made by corporate bodies, partnerships, trustees and others, relying on his training and his experience as an accountant to do so.
There were one or two occasions, the judge noted, on which Mr C went beyond purely factual matters and gave his opinion; that is occasions when Mr C went beyond describing what the documents said and offered his own opinion as to the effect of them. However, these were not opinions on any accountancy matter in which Mr C could claim to be an expert, but instead opinions of law, which Mr C was not qualified to make.
The Judge’s conclusion
The judge concluded that the Mr C's report did not require permission under CPR Part 35 because it was not expert evidence. Whether or not such evidence was admissible would appear to depend on how it was presented to the court.