Adams & Ors v Allen & Overy & Ors

(Ch) 11 July 2013

When “expert shopping” should be allowed, and on what terms.

The Facts

The Claimant’s claim related to the drafting of a sales agreement for the sale of land that was likely to be granted planning permission. The Claimant entered into a sale agreement with a land trader. The agreement contained a formula to calculate the price for the land, as well as mechanisms to calculate a price where the parties failed to agree. The Claimant alleged that the drafting of the agreement was defective with the result that they received £23 million less than they ought to have, because the defective drafting had the unfortunate effect of creating an artificially low “Open Market Value” for determining the price to be paid under the agreement.

The Claimant’s expert, after discussions with his opposite number, produced a revised report which undermined the Claimant’s case, the expert essentially agreeing with the Defendant that the Claimant would have to bear the tax implications of the transaction, which impacted the Open Market Value calculation.

After a failed mediation, the Claimant indicated in her Allocation Questionnaire that she wished to instruct a new expert, having lost confidence in the existing expert. Hearing the application, the Master refused permission for a new expert.

The judge allowed the appeal, holding that:

  1. The Court’s general approach was that expert-shopping was not permissible save unusual or exceptional circumstances;
  2. However, this case was unusual and not run-of-the-mill. There were a range of potential ways of viewing the tax implications, and experts could legitimately differ;
  3. The effect of the Master’s refusal was disproportionate. If it stood, then the reality was the Claimant was stuck with an expert who did not support her case, and who she would not call to give evidence. Refusing permission would leave her with no expert evidence at all;
  4. The expert had gone on record as stating that he was no longer prepared to give evidence for the Claimant. That was a good reason for permitting a new expert to be instructed;
  5. The trial was 10-11 months away. A change of experts would not affect the trial date;
  6. The appropriate order was that the Claimant should, as the price to be paid for permission to change experts, pay 50% of the costs thrown away by the respondents in considering the now-redundant first round of reports.

Comment

Particularly outside personal injury claims, the rule that expert shopping will not be permitted seems to often be honoured in its breach, and this case provides another example of that. The problem for the court is obvious; no one likes the idea that you can simply discard an expert because they have changed their mind and no longer favour your case, but provided that such becomes clear early enough in the timetable, the alternative to permitting a party to jettison the expert in question is even less attractive – if permission to change experts is refused, then the judge is effectively dooming that party’s case to failure without a trial. It is therefore not surprising that, caught on the horns of that dilemma, the judge tends to permit the change provided that there are credible grounds to suppose that a replacement expert will be able to support the case.

A number of practice points arise here:

  1. First and most obviously, this kind of course is never cheap for the client – normally the order will, as part of the price to be paid for permission to change, contain at least an element of “your mess, you clean it up” reasoning – see the judge’s requirement in this case that the Claimant pay 50% of the costs thrown away in any event as a condition of permission to change experts. Experts who are going to change their mind therefore have an obligation to their client (as well as to the court) to make any material alteration of their opinion clear to everyone as soon as possible (and following Jones v Kaney, a failure to do so which causes increased costs is something for which the expert can be personally liable for);
  2. An application like this is likely to be a substantial one, marked by considerable argument from both sides (the “prize” for the other side if they see off the application to change experts is obvious – a likely premature end to the case; see above). It is likely that to at least have a chance of success the application will need to be supported by a preliminary report from the proposed intended replacement expert. That report will need to be clear and focussed and it will need to explain to the judge in a quick and intelligible way why the existing’s expert’s capitulation is not the end of the applicant’s case, either because the existing expert is wrong or (as here) because there is an alternative, equally valid analysis which continues to validate the applicant’s case;
  3. Needless to say, any expert asked to “step into the breach” in this way will need to consider his or her position extremely carefully. The expert will often be asked to produce a preliminary report at short notice, as soon as the problem with the existing expert is noted. An expert who takes on a brief which an existing expert has, in effect, already passed up in such a public way will often leave himself or herself comparatively little room to adjust his views down the line without exposing himself or herself to criticism – for example, a expert who is initially bullish but then later decides that the original expert may have had something of a point is unlikely to find favour with either his client or the court. 

TEDR Volume & Issue

TEDR Volume: 
18
TEDR Issue: 
2