UK: Naming an expert – the risks

Over the summer you may have missed our article in Insurance Day which discusses the Court of Appeal decision in Nicos Varnavas Hajigeorgiou v Vassos Michael Vasiliou and the new Protocol for the Instruction of Experts.

Expert evidence is often used in insurance and reinsurance litigation. The main purpose of expert evidence is to assist the Court to decide what a reasonable and prudent underwriter or broker would have done in the circumstances. As such, expert evidence may be a crucial factor to swing the Court's decision to one way or another. Therefore, it is not uncommon for a party to shop around for the right expert whose evidence will advance the party's case. A party may change their mind on whose reports they want to adduce as evidence as the litigation develops.

The Court of Appeal decision in Nicos Varnavas Hajigeorgiou v Vassos Michael Vasiliou [2005] EWCA Civ 236 is a reminder to litigators of the importance of choosing the right experts, and not putting forward their names until confident about what they will say. If an expert is named, but a party then tries to change to a different expert (which might arise because the first expert is unhelpful to the party's case), the Court may require the first expert's report to be disclosed as a condition of allowing the substitution – potentially disastrous if the reason for wanting to change is because the first expert has said something unhelpful. Litigators may thus be on much safer ground just identifying a discipline rather than an individual expert.

In Hajigeorgiou, the claimant sought damages for breach of the defendant's covenant of quiet enjoyment in a lease of premises, which were intended to be used as a restaurant. The defendant's solicitor sought the Court's direction to adduce expert evidence on the value of the restaurant and what profit the restaurant would have made if trading had not been restricted as a result of the defendant's breach of covenant. His application was supported by a witness statement to which a restaurant valuation expert, Mr Watson, whose CV was exhibited. At the end of the case management conference, one of the terms incorporated in the court order was as follows:

After Mr Watson inspected the premises and prepared his evidence, the defendant' solicitor wanted to instruct another expert, Mr Negus. The claimant's solicitor refused to provide access to the claimant's premises for inspection by Mr Negus. In the County Court, Judge Cowell held that the defendant needed permission to rely on the report of Mr Negus. Having held that the permission was required, he held that he would give permission to rely on the evidence of Mr Negus, but only on condition that the report of Mr Watson was disclosed to the claimant. The defendant appealed against this decision and the Court of Appeal allowed the appeal.

Two issues were before the Court of Appeal. First, whether permission was required to rely on the report of Mr Negus. Second, if permission was required, whether it was correct to give the permission to rely on the evidence of Mr Negus only on the condition that the report of Mr Watson was disclosed to the claimant.

As regards the issue of permission, the Court of Appeal held that the order above did not of itself require the defendant to obtain the permission of the Court to rely on the evidence of Mr Negus. The order plainly and unequivocally identifies the experts only by their field of expertise rather than a named individual expert. The fact that details of Mr Watson's expertise and charge-out rates were stated in the defendant's solicitor's witness statement could not be taken to oblige the defendant to rely only on the evidence of Mr Watson.

The Court of Appeal also considered the Court's power under the Civil Procedure Rules 35.4. Civil Procedure Rules 35.4 governs the Court's power to restrict expert evidence but not the instruction of experts. The rules state that no party may call or put in evidence an experts report without the Court's permission. They do not empower the Court to give permission for the instruction of experts. The Court of Appeal held that the phrase "permission, if so advised, to instruct one expert" in the above order should be construed as meaning "permission, if so advised, to call and put in evidence a report from one expert". It follows that the fact that Mr Watson had been instructed did not of itself require the defendant to seek the permission of the Court to instruct Mr Negus.

It is interesting to note that the Court of Appeal made an obiter comment that if the defendant did need the Court's permission to rely on the evidence of Mr Negus, Judge Cowell was right to impose the condition that the report of Mr Watson be disclosed. The imposing of the condition is a way by which the Court uses its power to prevent expert shopping. In fact, the Court of Appeal is even prepared to go further by extending the condition from disclosure of the first expert's final report only to any reports containing the substance of the first expert's opinion. The Court's permission to rely on the evidence of Mr Negus would be required if the order had named Mr Watson as an expert. It will follow that the Court would likely to grant permission to rely on the evidence of Mr Negus on the condition that all Mr Watson's reports containing the substance of his opinion be disclosed to the claimant.

Any party involved in instructing experts should be aware that the Civil Justice Council launched a new Protocol for the Instruction of Experts to give evidence in civil claims in June 2005, shortly after the handing down of the Court of Appeal's decision. The Protocol will take effect from 5 September 2005. The purpose of the Protocol is to offer guidance to experts and to those instructing them in the interpretation of, and compliance with, part 35 of the Civil Procedure Rules and to further the objectives of the Civil Procedure Rule generally. In the Protocol, it is stated that before experts are formally instructed or the court's permission to appoint named experts is sought, various prerequisites should be established. For example, the experts should have the appropriate expertise and experience. Case Management Information Sheets in certain Courts already ask for the names of experts but "not yet known" is a common answer. The Protocol may encourage the Courts to press for experts to be named earlier rather than later.

In litigation, it is not uncommon for parties to shop around for experts. Sometimes, the first expert approached is unhelpful, and even positively adverse to the party's case. Both the Court of Appeal's decision and the Protocol for the Instructions of Experts highlight the importance of selecting the right expert at an early stage, ideally prior to the first case management conference. This is another example of the trend towards "front-loading" of litigation. Parties are increasingly required to have undertaken all the necessary preparatory steps at an early stage, rather than waiting to see how the litigation develops.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

The original publication date for this article was 03/10/2005.