Expert witness duties re-examined by the Court of Appeal
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With many professional expert witness service providers operating on an ever larger and more global scale, difficult and sensitive issues can arise in relation to potentially conflicting engagements.
In a judgment handed down on 11 January in Secretariat v A Company [2021] EWCA Civ 6, the English Court of Appeal gave important guidance on the approach required under English law.
Notably, the Court did not rely on the existence of a fiduciary relationship between the expert witness and client. Rather, the terms of the expert's retainer are determinative of the scope of their duties in this regard.
In April 2020, we reported on the High Court's judgment in the same case, A v B [2020] EWHC 809 (TCC). Mrs Justice O'Farrell DBE continued an interim injunction against the defendant – an expert consulting firm – that restrained its group company in the UK from providing expert services to a party in arbitration proceedings, where its group company in Singapore had already been engaged by the opposing party to provide similar expert services in separate but related arbitration proceedings.
The Judge held that, on the facts, a fiduciary relationship had arisen and a duty of loyalty was owed by the consultancy firm to the claimant.
By accepting instructions to provide expert services to the claimant's opponent in related proceedings, the consultancy firm had created a potential conflict of interest in breach of that fiduciary duty.
This was the first time in the English jurisdiction that a Court had held that fiduciary duties were owed by an expert witness to their clients.
The Court of Appeal dismissed the consultancy firm's appeal and continued the injunction. However, its reasons for doing so were different to those of the first instance judge.
In particular, the Court of Appeal declined to find that a fiduciary relationship between expert and client existed, noting that "it might be inapt to import all of that baggage into a relationship between a client and an expert".
The Court held that it was not necessary to find a "freestanding duty of loyalty" in circumstances where the contract between the parties contained an express clause dealing with conflicts of interest.
On the facts, the Singapore entity owed a contractual duty (which bound all the companies in the group) to avoid any conflicts of interest, which was breached when the UK entity took on the related engagement.
The Court's analysis
Fiduciary duty of loyalty
Fiduciary duties typically arise in certain settled categories of relationship, such as that between solicitor and client, or trustee and beneficiary: in broad terms, where one party assumes a position of trust in relation to the other.
The relationship between an expert witness and his or her client is not one of the settled categories of fiduciary relationship. However, the Court of Appeal did not automatically reject the possibility that an expert witness could owe a fiduciary duty of loyalty on appropriate facts.
The defendant consultancy firm argued that an expert witness cannot owe a fiduciary duty of loyalty to the client because their overriding duty is to the Court or tribunal, and this would conflict with a fiduciary duty of loyalty to the client. This argument was dismissed.
The Court held that the position of an expert witness is similar to the position of an advocate, who owes duties to the Court and client simultaneously. The Court stated that complying with their overriding duty to the Court is the best possible way in which an expert can satisfy their professional duty to the client.
An expert complying with their duty to the Court will not only ensure that the client receives a frank and honest appraisal of their case (thereby enabling the client to decide whether the case is really worth pursuing), but also that any evidence presented is, and can be seen to be, independent and unbiased, enhancing its credibility.
Nevertheless, diverging from the High Court's view, the Court of Appeal did not find that the consultancy firm owed a fiduciary duty of loyalty to the claimant on the facts of this case.
Coulson LJ (with whom Carr LJ agreed) found that it was unnecessary to decide whether such a freestanding duty existed because the parties had signed a retainer contract dealing expressly with conflicts of interest, and a fiduciary duty of loyalty would not add to or enhance the obligations it provided for.
Coulson LJ noted he would be reluctant to conclude that an expert witness owed a fiduciary duty of loyalty. He explained that to categorise the relationship as a "fiduciary" one could have unintended ramifications because the expression “fiduciary” has various legal implications, not all of which may be appropriate for the relationship between a client and an expert.
While still not ruling out the possibility altogether, Males LJ expressed a more concrete opinion, that "an expert witness is not a fiduciary and does not owe fiduciary duties to his client (…) [s]ave perhaps in circumstances far removed from the present case".
Contractual duty of loyalty
The Court of Appeal's analysis puts the focus on the terms of the agreement between the expert and client.
In this case, the retainer between the Singapore entity and the claimant contained an express clause recording that the entity confirmed it had no conflicts of interest in acting for the claimant and that it would "maintain this position for the duration of [its] engagement".
The Court found that, based on this clause, the Singapore entity owed the claimant a clear contractual duty to avoid conflicts of interest for the duration of the retainer.
Obligations owed by different entities within the consultancy firm
The Court found that, on the facts, the Singapore entity gave the undertaking of loyalty on behalf of all entities in the firm's group. It was relevant that the conflict check on which the clause in the retainer was based had been (and the client had been told it had been) carried out in respect of all entities in the consultancy firm's group.
Further, the consultancy firm marketed itself as a single global firm with a single global team, and there were multiple indications that a distinction between entities was merely technical.
In the circumstances, the Court concluded that the parties could not have intended that the conflict of interest obligations bound only the Singapore entity.
Conflict of interest
In determining whether a conflict of interests existed on the facts, the Court also considered the nature and scope of services that the consultancy firm agreed to provide.
The Court rejected the argument that a strict distinction could be drawn between an expert with a testifying role and one with a wider advisory role. However, it acknowledged that, where the expert has a wider advisory role, including involvement in the preparation of the client's case from an early stage, there is a greater risk of creating conflicts of interest than where the expert just gives evidence at trial or at the arbitration hearing.
Males LJ acknowledged that "[t]ypically (…) the professional expert witness will be viewed, and rightly so, as part of the client’s litigation team". In this case, in addition to giving evidence, the consultancy firm had agreed to play a wider arbitration support role (as is commonly undertaken by delay/quantum experts in construction disputes).
The Court concluded there was a clear conflict of interest between the Singapore entity acting for the claimant and another entity of the consultancy firm acting for the claimant's opponent in a separate arbitration arising from the same construction project and concerning the same delays.
The Court found it relevant that there were "all-pervasive" overlaps of parties, roles, project and subject-matter in relation to the two engagements.
However, the Court emphasised that the existence of a conflict of interest is a matter of degree and that its findings should not be taken to mean that the same expert cannot ever act both for and against the same client on different projects.
The scope of the duty, and which side of the line a potential conflict falls, will depend on the terms of the parties' agreement and the facts of the case.
Further, the Court acknowledged that it is possible for a group like the consultancy firm to make plain that its representations as to conflict of interest and its undertakings for the future do not apply to the whole group, should it consider it "commercially sensible" to do so.
Comment
The Court of Appeal's focus on the parties' contractual arrangements, rather than any freestanding duty of loyalty, underscores the importance of addressing conflicts of interest clearly in an expert's retainer.
In particular, where – as is common in high‑value international disputes – the expert services provider is an international firm, the approach to engagements by different network offices or entities should be carefully considered. As the Court of Appeal noted, this is, to an extent, a commercial issue rather than a strictly legal one.
There remains scope for debate as to how the Court might deal with a similar issue in the absence of a written retainer or provisions in it dealing with conflicts. The Court did not absolutely rule out the possibility of a duty of loyalty arising in an appropriate case. It is in the interests of all parties, however, to seek to avoid such uncertainty by ensuring their expectations are aligned and recording them clearly at the outset of their engagement.
This article was authored by Emily Wyse Jackson, senior associate and Iurii Nikitin, associate, in Fieldfisher's dispute resolution team.