High standards of expert evidence support London’s pre-eminence as the global dispute resolution centre

If there was any doubt, the first London International Disputes Week 2019 (#LIDW2019) certainly demonstrated why London is the premier centre for major dispute resolution by showcasing the impressive range of legal and support skills available here. 

My own professional interest as a frequent expert witness on damages was particularly drawn to Mr Justice Roth’s keynote address in the final session of the week on Competition Disputes.  Competition cases require extensive use of expert evidence and Mr Justice Roth’s address set out the tools and sanctions on experts in recent cases such as the three interchange disputes, BCMR, PayTV v Sky Sports and Britned disputes. 

Mr Justice Roth speaking to a room of international lawyers and expert witnesses with an interest in competition disputes
Mr Justice Roth’s Keynote address

Mr Justice Roth, a Justice in the Chancery Division of the High Court of England and Wales and President of the UK Competition Appeal Tribunal described the framework that has evolved in England for securing impartial expert witness evidence, starting from the principles which Mr Justice Cresswell had laid down in his judgment in The Ikarian Reefer ([1993] 2 Lloyd’s Rep. 68 shipping case. 

He mentioned the increasingly common practice of instructing experts to meet before they prepare their first reports to agree the scope and thus avoid addressing irrelevant issues.  He went on to describe how useful the tribunal recently found asking experts to present a “teach-in” at an early stage of the hearing in Britned Development Ltd v ABB [2018] EWHC 2616 (Ch).  This practice will become even more important as Judges conduct more concurrent expert evidence (better known as “hot-tubbing”) sessions, a process he recognised created much more work for Judges but did shortened the overall hearing. 

At this point it is worth quoting from The Honourable Mr Justice Marcus Smith’s Judgment following the costs hearing in the Britned case, where he observed that:

“the interchange between the experts and the battle between their different approaches, I found (as I hope the Judgment makes clear) incredibly useful. I do not consider that I would have been able to reach so clear a conclusion regarding Mr Biro’s approach had I not had the benefit of understanding why Dr Jenkins’ approach was flawed. The manner in which the experts’ views were tested in the crucible of cross-examination was very helpful indeed.”

In Mr Justice Roth’s view these developments, when combined with the courts willingness to criticise experts in their public judgments (as demonstrated above) and, in extreme cases to report them to their professional body, are a sufficient threat to ensure that experts present evidence impartially.   

He also mentioned developments in tailored proportional disclosure rather than simply mechanically applying standard disclosure, which include using Redfern Schedules and Scott Schedules, such as in the air cargo anticompetition case.  He also referred to new ways of assessing aggregate damages and their distribution in collective actions, which shows how London’s courts are responding to the changing nature of large-scale litigation.

Mr Justice Roth closed by suggesting these strengths means that Brexit will not make London any less attractive as a place for settling major international disputes, in spite of attempts by other countries to attract business by setting up English speaking courts.

Having acted as an expert since before the Woolf reforms in 1999, I have seen these rules gradually develop thanks to various working parties and committees of practitioners.  I share Mr Justice Roth’s opinion that London has a comprehensive set of tools designed to ensure that courts and tribunals can rely on robust and impartial expert evidence. 

Charles Lazarevic

31 May 2019

enquiries@veroconsulting.expert

Does kissing an expert witness suggest too close a relationship?

Readers will not need reminding that an expert’s duty is to help the court on matters within their expertise and this duty overrides any obligation to the person from whom experts have received instructions or by whom they are paid (CPR 35.3 and CrPR 33.2).  As one would expect, the expert is required to approach their work with total independence (PD35 2.1). 

The kiss

This requirement was brought into question at the trial of a Mr Mick Wills at Wellingborough Magistrates Court last year. Having been accused of illegally hunting a fox with dogs, the expert evidence for the prosecution was provided by Professor Stephen Harris, a self-described vulpophile and one of Britain’s leading authorities on foxes and a longstanding opponent of fox hunting.  It was reported to the Judge that a prosecution witness had kissed the expert witness when they met just before court.  When challenged, Professor Harris’s explanation for this behaviour was that he merely knew the lady and had not seen her in 20 years!

Judge Daber’s reaction on being told

On being informed of this incident, Judge Daber took a rather stern view of this incident, concluding that: “If a relationship exists between a proposed expert and the party calling that expert which a reasonable observer might think is evidence of bias, then he must be excluded on the grounds of public policy. Justice must be seen to be done.”

Kissing the expert witness
Has this expert witness compromised his independence?

The judge’s response to this rather unusual event should remind experts and those appointing them to take great care to avoid even the appearance of being too close. 

Those promoting the inquisitorial system’s approach to expert witness will say this case reinforces their argument that experts should always be appointed by courts or tribunals.

Experts must be seen to be unbiased

From my own experience of long and complex court and arbitration hearings, experts are often required to attend many days of evidence and to work extremely closely with those appointing them and their legal team in order to share their opinions on a broad range of evidence within their expertise.  One consequence of such a close working relationship is that an outside observer could interpreted the familiarity between the expert witness and those appointing them as implying bias. Indeed I have seen expert evidence dismissed by an arbitrator merely because the witness entered, sat with and left with the legal team each day. To the tribunal the expert witness appeared to be a member of the legal team and so an advocate for their client’s case.

In order to avoid even the appearance of bias the cautious expert should remain slightly aloof from the party that appointed them. This could include even entering the tribunal room separately and throughout the hearings sitting slightly apart from the party that appointed them.  Perhaps they should even go as far as to stay in different hotels and have their meals separately? All this should be designed to reassure the tribunal that the expert was approaching the work and evidence with total impartiality.

Why not share your experiences?

If readers have come across other examples of expert evidence being excluded for small indiscretions, and how this appearance of bias can be avoided, I would like to hear about them and the consequences for the case.  Please drop me a line.  I look forward to hearing from you.

Charles Lazarevic

27 May 2019

mail@veroconsulting.expert

Cryptocurrencies and fraud continue to be inextricably linked.

The Commodity Futures Trading Commission (#CFTC) filed a federal civil enforcement action in the U.S. District Court for the Eastern District of New York against Patrick K. McDonnell and CabbageTech, Corp., doing business as Coin Drop Markets (CDM) charging them with fraud and misappropriation in connection with purchases and trading of Bitcoin and Litecoin.

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The risk of fraud involving cryptocurrencies

Action Fraud recently reported that “once the price of Bitcoin started to surge in mid to late 2017 we started to see a massive increase in the number of frauds. These new investment scams are exploiting a lack of general understanding about Bitcoin and, it being the flavour of the month, to make money before moving on to the next investment craze”.

A few weeks ago we advised a digital currency trader who had a dispute with his broker following an especially volatile day. The broker decided to close his position with no warning in order to minimise their own risk, causing the client to incur losses. Having reviewed the regulatory and contractual position we were able to advise the client that he had a claim against his broker and advised him to pursue his losses.

At present there are about 1,000 digital currencies of which about 260 are actively traded on the digital currency market. Live bid and sell prices for digital currencies are now quoted by all major financial brokers. The nature of these digital currencies, otherwise known as cryptocurrencies with Bitcoin being the most well know, are created by digital hardware and software. These price increases has meant that demand for GPUs (graphics processing units), and consequently the cost of processing power, has soared recently thanks to cryptocurrency mining. The fact that cryptocurrencies are not regulated by any financial authority, makes digital currency very attractive for the risk takers in current market conditions.

Unfortunately, these same characteristics have made them also very attractive for the criminally minded. The currencies only exist online and are highly anonymised, making it difficult to identify users and to track payments. This has resulted in Bitcoin being seen as the preferred currency of drug dealers, cyber criminals and online ransomware demands, such as last year’s WannaCry cyber attack!

Some financial brokers offer their clients derivative contracts based on digital currencies, but do not offer physical ownership of the digital currency. This was the case for our client. Recently a U$500m theft at the Japanese cryptocurrency exchange Coincheck highlighted the risks connected with safeguarding digital currencies. In that case even holders who had their digital currencies recorded in what is called “wallets” were defrauded.

Our client’s dispute was handled by one of the firm’s team, an experienced former trader. They are available to assist in disputes between traders, financial brokers and cryptocurrency exchanges either as a result of theft, errors in transaction record keeping or market manipulation. We can also help with disputes where derivatives are based on digital currencies are the subject of the trade.

For further information, or if you have a dispute where we may be able to help, please contact us on: enquiries@veroconsulting.expert.

Charles Lazarevic

23 February 2018