Joint Privilege

[2011] EWHC 2583 (Admin) TEDR Volume 16 Issue 3

Disclosure of an Expert’s report obtained during the pre-action protocol period

The independence of an Expert

[2011] EWHC 474 (Ch) TEDR Volume: 16 Issue: 1

The Facts

This involved an application by the Claimant, Meat Co against the Defendant, Dawn, to oppose an application by the Defendant to call a new expert witness. They wished permission to be refused on the basis that proposed expert was in possession of confidential and privileged information concerning the Claimant which they said prevented her from acting or continuing to act for the Defendant and because they said she lacked the necessary independence of an expert. It was agreed that the expert was a retired meat trader and had the appropriate qualifications to be a suitable expert in the case. That was doubly so given that both sides had tried to instruct her in the matter. The Claimant tried first followed by the Defendant. The Claimant’s managing director (who used to work for the Defendant) had contacted the expert in May 2010. A conversation took place between the pair and, at the time, she said she was expecting to hear from the Defendant with a view to engagement as a consultant. There were also several e-mails between the pair. Full details of the information shared between them were not made available within the Judgement but made available to the Judge to assist him in making his decision.

 Issues

1. Did the fact the proposed expert possessed privileged and confidential information about the other party disqualify her from acting as an expert?

2. Did the proposed Expert lack independence?

The Decision

Privilege and confidentiality

It was not contested that the expert had been given some privileged and confidential information. However, His Lordship did not agree with the Claimant that the expert ought to be treated in the same way as perhaps a solicitor and client would be treated if there had been a previous engagement that had Lordship’s conclusion was that the expert had only received the information in the course of enquiries as to whether she would “that does not rob it of its confidential quality, but it does mean that the relationship between her and Meat Co is very different from that of an engaged solicitor and his client”. He observed that to some extent the information had been forced upon her and whilst she could have refused to receive the information it was not appropriate to equate her with the sort of relationship of a solicitor and client. Overall His Lordship considered that, whilst confidentiality and privilege must be maintained, an undertaking by the expert she would maintain privilege and confidentiality would be sufficient. Overall His Lordship did not think that her deciding to act for the Defendant meant that she would betray confidences she had received and that it was a matter for her to decide what to do.

Further, having reviewed the e-mails and privileged information he considered that much of it would be uninteresting to the Defendant in any event and, as observed above, the undertaking would prevent her disclosing it.

Overall whilst previous cases have suggested that the practical approach was for the expert to refuse to act for both sides thus leaving the solicitors with the sensible course of action of seeking alternative experts, that did not automatically follow and the expert was not automatically disqualified. Overall therefore Mr Justice Mann considered that the expert was not disqualified from acting as an expert by virtue of her receipt of privileged and confidential information in this particular case.

Lack of independence

The second limb of objection was that the expert lacked the necessary independence. The Court set out the principles which were conveniently set out by Mr. Justice Nelson in Armchair Passenger Transport Limited v Helical Bar PLC [2003] EWHC 367 as follows:

i) It is always desirable that experts should have no actual or apparent interest in the outcome of proceedings.

ii) The existence of such an interest, whether as an employee of the parties or otherwise, does not automatically render the evidence of that proposed expert inadmissible. It is the nature and extent of the interest or connection that matters, not the mere fact of the interest or connection.

iii) Where the expert has an interest of one kind or another in the outcome of the case, the question of whether he should be permitted to give evidence should be determined as soon as possible in the course of case management.

iv) The decision as to whether an expert should be permitted to give evidence in such circumstances is a matter of fact and degree. The test of apparent bias is not relevant to the question of whether or not an expert should be permitted to give evidence.

v) The questions which have to be determined [are] whether (i) that the person has expertise; and (ii) he or she is aware of their primary duty to the Court if they give expert evidence and willing and able despite the interest or connection with the litigation or party thereto, to carry out that duty.

vi) The judge will have to weigh the alternative choices openly if the expert’s evidence is excluded, having regard to the overriding objective of the CPR.

vii) If the expert has an interest which is not sufficient to preclude him from giving evidence the interest may nevertheless affect the weight of his evidence.

His Lordship also applied one qualification of his own in that he was of the view that sometimes it would not be possible to determine with any clarity whether there was any disqualifying connection between the expert and the party at an interlocutory stage. Whilst of course it is desirable to do so, he would not rule out the prospect of having to decide the point at trial if necessary. Overall, the conclusion is that whether or not an expert is disqualified by reason of a connection with a party will depend upon the facts of the case and not on a single issue such as whether there is some contractual relationship between the two. The status of being an employee does not automatically disqualify a person acting as an expert and therefore it is difficult to see why the status of a consultant with limited functions would either.

Comment

Clearly, issues such as the above can be raised by the legal representatives at the interlocutory stage in the case. However, they are also issues that can be raised in cross examination during the trial for determination then. It may therefore be thought by experts that, professionally, they wish to decline instructions on the basis that there may be a conflict of interest or that it may result in difficult cross examination at trial even if ultimately there is no such conflict.

Privilege and Expert reports

[2011] EWHC 268 (Comm), [2011] Lloyd’s Rep IR 544 TEDR Volume: 16 Issue: 1

The Facts

The Defendants claim litigation privilege over various pieces of material that were obtained and prepared pre-proceedings. The law was not seriously in dispute but was helpfully reiterated.

Issues

When is a pre-action report privileged?

The Decision

The law was re-affirmed as follows:

For a document to be protected by litigation privilege two conditions had to be satisfied. Firstly, at the time the document in question was created, litigation must be reasonably in prospect and not a mere possibility. It was not sufficient for there to be a distinct possibility of litigation in the future or a fear that future litigation would follow. However it was re-affirmed that it was not necessary to show that there was a greater than 50% chance of litigation.

Secondly, the document in question must have been made either with the sole or at least the primary purpose of using it for advice about actual or anticipated litigation.

Clearly, an Affidavit which explains the purposes of the document was instructive but was not conclusive if it appeared from the document itself that the characterisation of it was misconceived. The Court was at liberty to consider all the evidence as to whether or not a document fell within the description above.

Comment

Accordingly, it is important for an expert advising a party to confirm on what basis that advice is to be given and to reflect the same in the document where there is an issue. The instructions and/or the document itself can be viewed with a view to the Court deciding whether or not litigation privilege attaches and therefore care should be taken when acting as an expert in such a role.

The confused case of the meeting of experts and mediation

[2006] EWHC 2338 (TCC) TEDR Volume 12 Issue 1

The Facts

This was a building dispute which went to litigation. In the course of the litigation HHJ Thornton QC made a direction that:

“By 23.9.05 the parties’ architectural experts ….do meet without prejudice and prepare a statement of the issues upon which they are agreed and those upon which they are not agreed with a brief statement of the reasons for the disagreement.”

He also ordered that the case be stayed from 1st October to 31st November 2005 to allow the parties to mediate.

The experts complied with the directions order and by 1st September 2005 had agreed a statement of matters agreed and not agreed. In December 2005 (slightly later than anticipated) there was mediation. The mediation was unsuccessful in resolving the dispute and so the legal proceedings carried on in the New Year of 2006.

The Claimants sought to amend their pleadings in a way which was apparently inconsistent with the views expressed by their expert in the statement. The Defendants opposed the Claimants’ application to amend the pleadings. The Claimants asserted that as the statement was produced “without prejudice” for the mediation, it was a “without prejudice” document and so was privileged. Accordingly the Claimants contended that no reference could be made to its contents in the on-going litigation. The Defendants disagreed and contented that even if it were “without prejudice” and hence privileged, the differences between it and the Claimants new case were “so grotesque” that there had been an abuse of privilege whereby the document should lose its privileged status.

The Issues

The key issue was the application of the without prejudice rule in the above circumstances.

The Decision

The judge confirmed that normally a statement produced by experts under CPR 35.12 (3) would not be without prejudice and could be referred to in litigation.

However, the judge found as a fact that in this particular case “the primary function of the statement was to assist in the mediation”.

He accordingly found that it was and remained privileged and hence its contents could not be referred to in the litigation.

He also found that there was no abuse of privilege in this case which would otherwise cause the without prejudice and hence privileged nature of the document to be lost.

Comment

The judge confirmed that normally a statement produced by experts under CPR 35.12 (3) would not be without prejudice and could be referred to in litigation.

However, the judge found as a fact that in this particular case “the primary function of the statement was to assist in the mediation”.

He accordingly found that it was and remained privileged and hence its contents could not be referred to in the litigation.

He also found that there was no abuse of privilege in this case which would otherwise cause the without prejudice and hence privileged nature of the document to be lost.

Disclosure, Without Prejudice, Confidentiality and Litigation

[2008] EWHC 786 (QB) TEDR Volume 13 Issue 2

The Facts

The Defendant had acted as Solicitor for the Claimants in connection with the drafting and negotiation of an agreement between themselves and DEFRA for the provision of waste management services during the foot and mouth epidemic in 2001.

The Claimants and DEFRA were in dispute as to the sums owning pursuant to that agreement.

Settlement of that dispute took place after a series of ‘without prejudice’ correspondence and two mediations.

The action before the Court was brought by the Claimants against the Defendant (their original solicitors) for negligence in relation to the initial negotiation and drafting of the agreement and thus the shortfall in the sums they contend that they were entitled to under the original agreement and those recovered from DEFRA following the mediations.

The Agreement to Mediate in the case of each mediation contained clauses as to the confidentiality and without prejudice nature of the mediation.

The Issues

Whether the Defendant (the original solicitor) was entitled to disclosure of documents arising out of or in connection with the two mediations between the Claimants and DEFRA.

The Defendant contended:

1. That there is no principle of English Law which means documents are protected from disclosure by reason of confidentiality alone;

2. Whilst without prejudice documents are prima facie protected from disclosure on the basis that they are privileged, the Claimants waived that privilege when they pleaded the case on the basis that the settlement with DEFRA was reasonable and thus claimed the shortfall;

3. In order to assess the reasonableness of the Claimants’ conduct, the Defendant needed to know what that conduct was and that included conduct at the mediations.

DEFRA were not a party to the proceedings but had been permitted to make representations pursuant to CPR 31.19(6)(b) and resisted the application.

The Claimants were neutral as to the application.

The Decision

The Law of privilege was reviewed. It exists because:

a. There are public policy reasons for encouraging parties to attempt settlement of their disputes by means of without prejudice discussions without fear that any statements made therein would be used within litigation; and

b. The express or implied agreement between the parties that the communications within the course of their negotiations should not be admissible in evidence should a contested hearing ensue.

The only exception of relevance was noted to be where a former client sues his former solicitor and an issue arises as to whether he has acted reasonably to mitigate his losses in his conduct and conclusion of negotiations with a compromise of proceedings brought against him (See: Muller v Lindsay & Mortimer [1996] 1 PNLR 74). The Claimants had sought to deny disclosure of the without prejudice material without success. It was held that the issue of the truth (or otherwise) of anything stated in the negotiation was unconnected with the issue and therefore, it fell outside the principle of public policy protecting without prejudice communication.

The instant case was distinguished from the exception in Muller. This case involved consideration of whether the without prejudice material of a third party (DEFRA) should be disclosed. The privilege belonged not only to the Claimant but to DEFRA as well. There were public policy reasons why DEFRA should be entitled to assert privilege.

There was an express agreement (within the Agreement to Mediate) that the without prejudice rule should apply. DEFRA were entitled to protect themselves from disclosure of material that may embarrass them. Here, the truth or otherwise of what was said at the mediation would or could be at issue.

The CPR encouraged without prejudice communication and mediation and thus the Court should be slow to find exceptions to the general rule. The Defendant was not within the Muller exception and thus the application failed on that basis.

In addition, whilst confidentiality is not necessarily a bar to disclosure, DEFRA were party to a confidentiality agreement within the Agreement to Mediate. DEFRA wished that agreement to be honoured and thus the Court should support the mediation process (which was encouraged by the CPR) in refusing, in normal circumstances, to Order disclosure of documents and communications within a mediation. In particular, the Court should be very slow to Order disclosure of documents held by a mediator. Mediators should be able to conduct mediations confident that, in normal circumstances, their papers should not be seen by the parties or others.

Comment

This case reinforces the purpose and importance of the Agreement to Mediate and the fact that, if there was a risk of disclosure being Ordered (absent abnormal circumstances) the process would be undermined.

Fact Sheet on legal professional privilege issued by The Academy of Experts