PI Brief Update

Payment by Outcome: Don’t Tell the Expert - Ian Gascoigne, Eversheds

12/07/13. Like an unwanted Christmas present returned to the store with its gift receipt on any 28th December, the inception of damages-based agreements has not brought joy. We have been told that they are unworkable, principally because it is unclear whether they preclude any parallel financial arrangement between client and lawyer. The Ministry of Justice is reported to be considering early amendments to the Damages-Based Agreements (DBA) Regulations 2013. The Law Society stopped work on drafting a model agreement. And there is, as yet, no indication that many lawyers are using them.

This does not sound like the time to be worrying about the potential impact of a DBA on the independence of an expert witness.

But older litigation hands will recall similar concerns when conditional fee agreements were introduced in the 1990s. Like those, DBAs will become more popular in time, and no one would seriously suggest that CFAs led solicitors to favour their own interests to their clients’ detriment in practice.

Where does the expert come into the DBA equation? An expert witness cannot enter into a DBA himself as it would impair his independence from the party which is paying his fee. But is that cherished independence impaired, at one remove, if the solicitor who selects and instructs the expert witness is himself acting on the basis that he will be paid a share of the damages his client recovers in the case?

If the expert is unaware of the case funding arrangement, there is no issue. It would not be an obvious thing to tell him. But it may be disclosed inadvertently. Here’s an example.

In a personal injury claim, the solicitor holds a conference with counsel to discuss a party-chosen expert’s draft report into the cause of the accident which the expert and injured client both attend. Barrister and solicitor are each acting on a DBA. Substantial damages are anticipated. The barrister goes through the draft report and, in conclusion, states that he hopes the expert will continue to retain confidence in his explanation of the accident as it is supports the client’s case. The client intervenes to the effect that he supposes both barrister and solicitor are hoping that too. They all laugh. The expert goes away understanding that by his comment the client meant the lawyers would benefit from a successful outcome in favourable financial terms.

The honest expert will do his best to put that remark out of his mind, But he would not be human if it didn’t keep coming back to him. He knows his fee is hours-based, estimated in advance of instruction in order to get the court’s permission to use expert evidence at all. And payable by the client in any event. The other participants on the same side, as he is aware from hearing the chance remark, are being paid in a different way and have ‘skin in the game’. They will not be paid at all if the claim fails.

Would this knowledge have any impact on the expert’s work? Most of the time, probably not, but it could do. Maybe the expert would be encouraged to stretch his opinion towards the claimant’s side on a difficult aspect of the case if he thought it would help those alongside whom he was working.

Experts, of course, are mindful of their reputations beyond the immediate case and will guard them carefully. An expert with knowledge of how the claimant’s claim is being funded is, however slightly, tainted with that information, If an attack is being made on his independence in cross–examination, that aspect could be thrown in too, even as guesswork on the cross-examining advocate’s part. The problem here is the perception of partiality, not actual influence on an expert's opinion.

Assuming DBAs will become commonplace in litigation involving party-selected experts, there are three ways to attempt to kill this issue. The first is the exhortatory approach to solicitors, via guidance that they should ensure experts are shielded from any knowledge of the financial arrangements under which the case is being conducted by the lawyers. Easy to accept and intend, but harder to guarantee.

A second way of achieving the separation of the expert from the money side of a case is to put a duty on a solicitor, as an officer of the court, to prevent an expert witness instructed by him from becoming aware of any DBA in the case. That would seem a little harsh given the information could come out without anyone intending it to do so.

The final suggestion is to make it part of an expert’s statement of truth given in his report to the court that he is unaware of the financial arrangements used by his instructing solicitor. An addition could easily be made to the end of the current wording (shown in bold below) in the expert’s statement of truth, so it would read:

“I confirm that I have made clear which facts and matters referred to in this report are within my own knowledge and which are not. Those that are within my own knowledge I confirm to be true. The opinions I have expressed represent my true and complete professional opinions on the matters to which they refer. I have no knowledge of the basis on which [the party] on whose behalf I have been instructed has agreed or is liable to make any payment to the solicitor and/or counsel for acting on his behalf in this claim.”

Requiring the expert to add those words to his report shoud ensure that: a) he will do his best to avoid asking about or learning such funding information; b) the solicitor has an incentive to prevent that; and c) this would not be a topic for cross-examination if the case reached trial as the expert’s statement would have ruled it out. No judge would allow the advocate to go behind the statement without a very compelling reason.

Ian Gascoigne
Eversheds

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