Commercial Court considers interplay between new witness statement rules and admissibility of opinion evidence

Commercial Court considers interplay between new witness statement rules and admissibility of opinion evidence

Companies may elect to receive three month extension period for filing accounts during COVID-19

The Business and Property Courts recently introduced new rules governing the preparation of witness evidence in Practice Direction 57AC of the Civil Procedure Rules (PD 57AC) which require a revised approach to planning and preparing witness evidence.

In particular PD 57AC seeks to limit the scope of evidence given in witness statements and restricts it to the evidence that a witness would be allowed to give if called to give oral evidence at trial. In short, the new rules aim to ensure witness statements are evidence of fact and are not used as a way to convey material that is not for witness evidence, such as legal arguments or commentary on documents the witness was not a party to.

PD 57AC came into force earlier this year and applies to trial witness statements signed on or after 6 April 2021. As the rules came into effect recently, there has been limited judicial consideration of the changes. However a recent decision in the Commercial Court, MAD Atelier International BV v Manes [2021] EWHC 1899 (Comm), was the first reported judgment considering the Court’s powers under PD 57AC and the relationship between the new rules and the admissibility of opinion evidence. We consider the Court’s approach below.

Recent case

In MAD Atelier International BV v Manes, the Defendant (Mr Manes) applied to strike out passages of the Claimant’s (MAD Atelier) witness statements on the basis they contained inadmissible opinion evidence. The application was made pursuant to paragraph 5.2(1) of PD 57AC which gives the Court the power to strike out a trial witness statement where the statement does not comply with the new rules.

By way of background, Mr Manes and MAD Atelier agreed in 2015 to enter into a joint venture to develop an international franchise of restaurants under the brand "L'Atelier de Joel Robuchon". MAD Atelier alleged that Mr Manes fraudulently induced it into transactions that ultimately led to the termination of the joint venture agreement. MAD Atelier claimed that this resulted in two heads of damage relevant to the quantum recoverable for the allegations of fraud: (i) the transfer of MAD Atelier’s interest in the company MAD Atelier SA at a substantial undervalue; and (ii) the loss of the profits that MAD Atelier would otherwise have earned from the joint venture. Both categories require an assessment of the hypothetical profits that were likely otherwise to have been made.

Decision

In dismissing Mr Manes’ application, Sir Michael Burton, considered the position under PD 57AC and concluded “the new Practice Direction does not change the law as to admissibility of evidence or overrule the directions given by the previous authorities, including in the Court of Appeal, as to what may be given in evidence”. The Judge further emphasised the well-established position under Section 3(2) of the Civil Evidence Act 1972, that there is no blanket rule that witnesses who are not independent experts cannot give opinion evidence.

The judgment went on to highlight the following points of interest:

  1. Non-expert witnesses can give opinion evidence which relates to the factual evidence which they give, particularly if they have relevant experience of knowledge;
  2. This is particularly so where the evidence is as to a hypothetical situation and concerns what would or could have happened; and
  3. Witness evidence as to a hypothetical situation is particularly relevant in relation to quantum where the Court is trying to “do its best on the material before it”.
  4. PD 57AC states that trial witness statements should not include commentary on other evidence in the case. However, reference in witness statements to documents does not necessarily amount to inadmissible “commentary” as PD 57AC requires identification of documents to which the witness has been referred for the purposes of giving their statement.

The Court went on to highlight that the power to strike out witness statements under PD 57AC is, in any event, discretionary. In dismissing the application, the Judge noted that the evidence by MAD Atelier’s witnesses was not, in his view, inadmissible and considered it was either (i) itself factual evidence; (ii) or evidence of opinion given by those with knowledge of the facts and by reference to the factual evidence which they each give.

Conclusion

While the Judge recognised the value of PD 57AC, he noted that, in his view, it was not intended to affect the issue of admissibility of evidence. Rather the real purpose of the rules is to address the wastage of costs incurred by the provision of lengthy witness statements that merely recite the contents of the documentary disclosure and comment on it.

As is often the case with procedural updates, the practical application of PD 57AC and the Court’s approach to its provisions is an evolving process. However this decision provides some welcome clarification concerning the Court’s powers under PD 57AC and the issue of admissibility of evidence. This will undoubtedly be of interest to litigation lawyers, and those who may be required to give evidence in proceedings, as the position crystallises.

Contact our experts for further advice

Search our site