In litigation it may be tempting to retain an expert sympathetic to your case, but do so at your peril. Expert opinions in litigation are for the benefit of the Court and experts have a special duty to provide fair, objective and non-partisan assistance. Where an expert cannot provide such assistance, the Court will reject their evidence.
In a recent voir dire ruling on the admissibility of proposed expert evidence, the Supreme Court of British Columbia found that the proposed expert was unable to be fair and objective, and barred him from giving opinion evidence.1
The case in question is a class action suit against TD Asset Management Inc. The Plaintiffs allege that consumers paid excessive fees for management of an equity fund that was alleged to employ a passive investment strategy designed to close track or replicate, but not exceed, the performance of the equity fund's benchmark index. The Plaintiffs also allege that as a result of this passive investment strategy, once management fees are considered, the equity fund never exceeded the benchmark index. Damages allegedly exceed $1.3 billion.
At trial, Plaintiff's counsel sought to admit an expert report on the issue of management fees charged by big banks. The defence objected.
The Expert previously authored a textbook on the management fee issue, which he quoted from in his report. In particular, he included a quote saying “Canada has become the world leader in a particularly insidious form of financial malpractice … closet indexing”, which in short he describes as a strategy designed to produce results that match the relevant performance indices with ‘post-fee' results that consistently fall just short of the index and go unnoticed.
The Expert also authored several Twitter posts critical of investment banks, accusing them of defying investor protection efforts, accusing them of “tyranny” in charging high fund fees that ruin results for millions.
Considering the Expert's book, his Twitter posts, and testimony during the voir dire, the Court found that the Expert had an “unshakeable bias against any ‘big Canadian' bank” and that he was unable to give fair and objective opinion evidence.
While counsel in that case may have had their own very good reasons for selecting the Expert, the Court's decision indicates that all counsel should look closely at proposed expert's prior publications to determine whether there is a risk their evidence could be successfully challenged because of bias.
1 Turpin v TD Asset Management Inc., 2021 BCSC 1830
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