UK: Courts Consider Admissibility Of Expert Evidence In Mis-Selling Claims

Last Updated: 15 June 2017
Article by Paul Gair
Most Read Contributor in UK, July 2017

The High Court has held that expert evidence as to the suitability of swap products sold to London Executive Aviation Ltd (LEA) by Royal Bank of Scotland (the Bank) and the risks associated with those products was not admissible under Part 35 of the Civil Procedure Rules (CPRs).

The judgment was handed down in February 2017 but has only recently been reported.

This is a positive decision for banking institutions, supporting the approach taken in Darby Properties last year.

CPR 35

The rules governing expert evidence are contained in CPR 35 and give the courts broad powers to control the use, scope and format of expert evidence. The relevant rule when considering the admissibility of expert evidence is CPR 35.1 which provides that "Expert evidence shall be restricted to that which is reasonably required to resolve the proceedings".

Previous decisions

It is established law that expert evidence should not opine on the extent of a legal duty, such a question being one to be properly considered by the court itself. Instead, it should be used where there is a recognised expertise in a discrete area governed by recognised standards or rules of conduct and that expertise is capable of influencing the courts' decision on any issue it has to decide. Even then, the court can choose not to hear that evidence if it considers that it would not assist, i.e. where the court could come to a fully informed decision without hearing such evidence.

In two recent swaps mis-selling cases, Battrick v Royal Bank of Scotland and St Dominic's Ltd v Royal Bank of Scotland, HHJ Havelock-Allan considered the need for expert evidence.  He allowed the applications in both cases, commenting in St Dominic's that expert evidence can act as a "yardstick either to assist in determining what the [legal] duty encompasses or to assist in resolving whether the defendant's conduct fell short of the required standard". He also suggested that the customer and the bank were not on a level playing field during the case because of their relative knowledge of the products and that expert evidence could appropriately assist to alleviate any such inequality of position.

However in Darby Properties Ltd v Lloyds Bank  , Master Matthews departed from the approach adopted in Battrick and St Dominic's and held that there was no recognised body of expertise in the issues in respect of which the proposed expert evidence was concerned and that the evidence was not reasonably required for the Court to determine the points in issue.

LEA - the background

LEA is a swap mis-selling claim and the claimant, LEA, applied to have expert evidence admitted at trial concerning suitability requirements, the risks associated with the products LEA were sold and the question of whether those products were suitable and/or appropriate for it at the time. LEA relied on the Battrick and St Dominic's decisions in support of its application. The Bank opposed the application because 1) any risks with the products could be explained by reference to the documents in standard submissions; 2) expert evidence was not necessary or appropriate to explain the legal implications of the relevant legal standards (e.g. application of the COBs rules); and 3) the application of such standards was very fact specific to the particular customer and their circumstances, rendering expert evidence on the issue of little use in any event.

The decision

Newey J rejected the rationale HHJ Havelock-Allan's employed in Battrick and St Dominic's following detailed consideration of those decisions in his judgment. He agreed with the Bank that application of the relevant rules and standards to the case was very fact specific, noting that makes it difficult for an expert to produce useful evidence in advance of trial given they do not know which facts will be proven at trial.

Newey J went on to consider the proportionality of allowing expert evidence and decided that the cost (in both monetary terms and time with the impact on trial length) would not be proportionate given the limited usefulness of the evidence sought.

Finally, Newey J responded to a point made by HHJ Havelock-Allan in St Dominic's regarding equality of the parties stating that, while LEA may feel more comfortable if they were allowed expert evidence, the true test remained whether that evidence was reasonably required to assist the Judge in coming to a decision. In this case, Newey J concluded, it was not.


This case supports the decision in Darby Properties, providing a candid analysis of Havelock-Allan's previous decisions and lays down a useful marker for financial institutions looking avoid the admission of expert evidence or alternatively to limit its scope in order to keep the costs of litigation proportionate.

Contributor: Jack Hargreaves

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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