For your eyes only – expert advice and the risk of disclosure

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The courts have been on a mission to discourage expert shopping although the recent case of Vilca v Xstrata Ltd takes a more nuanced view of the competing risks. We consider whether it is still possible to instruct an expert privately, confident that the report will never have to be disclosed to the other side or the court.

A few years after the introduction of the CPR, the Court of Appeal decided to take steps to discourage expert shopping.  Their line of thought went as follows. Experts instructed in connection with court proceedings under CPR 35 are there primarily to assist the court by giving impartial evidence.  This duty overrides any obligation they have to the party instructing them.  The court should also have before it all the expert guidance available. 

To this end, the Court of Appeal made it a standard requirement that a party wishing to change experts, who is also in need of the court’s permission in one form or another, will have to disclose the reports of its first expert as a condition of relying upon the evidence of the second.   The case that began the process was Beck v Ministry of Defence, and it was followed by Hajigeorgiou v Vasiliou,Edwards-Tubb v JD Wetherspoon Plc and Murray v Devenish.

This new policy was a dramatic departure from what went before.  In effect, it overrides the privilege which applies to communications with an expert for the dominant purpose of anticipated litigation.  The party wishing (or having) to change experts is compelled to waive privilege as a condition of making the change, whether this is necessary because the first expert cannot carry out their role properly or is ill or wishes to retire.  They could choose to proceed without any expert evidence but in most instances such a course could fatally damage their case.

The approach taken in more recent cases

In the last five or six years, the lower courts have followed the lead of the Court of Appeal with enthusiasm.  They have imposed disclosure of the first expert’s previous reports, including drafts, notes to counsel, and letters instructing them as a condition whenever the court’s permission is needed in this context.  Permission may be required to enable the party to rely on a different expert from that named in directions, for a further examination of the claimant in an injury claim or for an extension of time to serve expert evidence.

No distinction is drawn between Part 35 experts instructed before or after proceedings begin.  This disclosure condition is the usual practice where the change of expert comes after the parties have embarked on the pre-action protocol procedure.

This means that a potential litigant should have serious concerns about whether any expert advice it obtains in connection with a dispute will be certain to retain its privileged and confidential status once proceedings are underway.  

Vilca v Xstrata

In the latest decision on this topic, Vilca v Xstrata Ltd, Stuart-Smith J takes a careful and nuanced review of the issues and the case law.  He concludes that it is not compulsory to impose the condition of disclosure of previous reports although that will usually be the order where a party needs the permission of the court to rely on a new expert.

The defendants had initially obtained a report about Peruvian law from Expert A before it was clear that the case was going to go to trial, at which point they decided to opt for the more eminent Expert B.  Expert B was then compelled to withdraw for health reasons.   

The judge refused to order disclosure of Expert B’s report as a condition for extending time for serving expert reports, and thereby allowing the defendants to rely on evidence from Expert C.  He could see no good basis for imposing such a condition in this case - the report was still in draft form, there was no suggestion of expert shopping and no advantage would be gained by having further expert material available to the claimants and the court. 

Are any experts’ reports safe from potential disclosure?

It is still possible for a party to instruct an expert privately, at their own expense, to advise on a dispute.  Such an expert is known as an expert adviser.  They should be instructed on terms that make it clear that they are not being appointed for the purpose of proceedings in accordance with CPR 35.  The distinct role of the expert adviser is acknowledged by Hughes LJ in Edwards-Tubb but he also flags up that it is always on the cards that the report may end up being required for use in court. 

This is most likely to happen where the party decides that they want to use the expert adviser as their Part 35 expert in the proceedings. It will usually be impossible to maintain privilege over the initial report of the expert because they will be under a duty to inform the court of any details relevant to their opinion (Axa Seguros SA v Allianz Insurance Plc).

What remains unclear is whether the court would impose disclosure of an expert adviser’s report as a condition of obtaining permission to rely upon other expert evidence. In Edwards-Tubb Hughes LJ said “where a party has elected to take advice pre-protocol, at his own expense, I do not think the same justification exists for hedging his privilege, at least in the absence of some unusual factor”.  This leaves open questions about the status of an expert adviser’s report obtained after the protocol period begins and what would constitute an unusual factor. 

Disclosure of an expert adviser’s report might be ordered as a condition of relying on any expert evidence where the other side is aware of the expert’s involvement – for example, because they have performed tests on an exhibit.  This was the case in Carruthers v MP Fireworks Ltd where the dispute concerned a firework.

More generally, disclosure might become unavoidable where the Part 35 expert refers to the expert adviser’s report, whether in his own report, in a meeting with the other side’s expert or in court.  If this is a concern, the safest course is not to show the report to the Part 35 expert. 

Comment

The Vilca judgment could, and perhaps should, prompt the courts to take a step back and reassess their direction of travel.  These are some of the questions they might wish to consider:

  • Is it in the interests of efficient court administration and minimising costs that proceedings be clogged up with two sets of expert reports from one party from a single discipline, together with draft reports and letters to and from their first expert? 
  • Is there now a need to discourage satellite litigation of the kind seen in BMG (Mansfield) Ltd v Galliford Try Construction Ltd where the other side went so far as to seek disclosure of attendance notes, even though there was little evidence of expert shopping?
  • Are the interests of justice served by a party plugging on with an inept expert because they fear that an attempt to change horses will lead to a costly case management battle and an extensive order for disclosure?
  • Should a party effectively be deprived of its fundamental right to privilege over advice from their Part 35 expert (or worse, their expert adviser) where there is no solid basis for suspecting that they are expert shopping? 
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