High Court refuses permission for new expert where party delayed in disclosing previous expert's withdrawal

The High Court has held that, in the circumstances of this case, the claimant's failure to disclose its expert's withdrawal from the case for some six months amounted to a serious abuse of the court's process: Clarke v Barclays Bank Plc [2014] EWHC 505 (Ch).

The court was highly critical of the claimant's decision to hold back news of the expert's withdrawal until a replacement expert was found, particularly in circumstances where the defendant's expert was to respond to the claimant's expert report and the experts were supposed to meet to seek to narrow the issues. The court described as an "inculpatory factor" the fact that the claimant was clearly hoping to settle the action via a mediation before having to disclose his difficulty with the expert; that mediation would have been held under false premises unless the claimant disclosed the position.

Although each case will turn on its facts, this decision highlights the risks in a party withholding information about an expert's withdrawal from a case for fear of undermining its negotiating position. Such a strategy may backfire as it did in this case.

Background

The claimant alleged that the defendant mortgagee had sold his property at a gross undervalue. The claimant relied on expert evidence from a surveyor, Mr Dall, dated 22 November 2010. Directions agreed in April 2013 included:

• the defendants were to serve expert evidence by 2 August 2013;
• the experts were to hold a discussion to narrow the issues and where possible reach agreement by 27 September 2013, and were to file a statement of issues on which they agreed / disagreed by 1 November 2013;
• the parties were to notify the court by 29 November 2013 of the extent to which they had complied with the directions.

On 3 May 2013 Mr Dall sent an e-mail to the claimant's solicitors informing them that he was unable to continue as expert in the matter because he had retired. The claimant's solicitors did not however inform the court or the defendants until the end of November 2013 in response to a reminder of the need to notify the court of the extent to which they had complied with the directions. At that point they wrote to the defendants announcing that Mr Dall had withdrawn and that they would provide a report from their new expert, Mr Yates, in advance of a mediation that had been arranged for 16 December.

The mediation fell through. The claimant served Mr Yates's report and issued an application for permission to rely on it. The deputy master granted permission and the defendants appealed against the grant of permission.

Decision

The High Court (Mr R Hollington QC sitting as a Deputy Judge) allowed the appeal, saying that the claimant's delay in disclosing Mr Dall's withdrawal was a pivotal issue in the case. It was "wholly improper" for the claimant to withhold that information in circumstances where:

• the expert evidence was critical to the claimant's case on both liability and quantum;
• the directions envisaged a sequential exchange of expert evidence, with the defendants responding to the claimant's expert evidence once finalised;
• the directions also envisaged that, following the exchange of expert evidence, the experts would meet and seek to narrow the issues.

Once it was clear the claimant would need to instruct a new expert, he should have disclosed the problem he faced to the court and the other side and applied for directions.

The court inferred that the claimant withheld the information in order to see if he could settle the case in a proposed mediation on favourable terms before he disclosed his difficulty to the other parties and thereby undermined his negotiating position. That strategy failed when the mediation was delayed beyond the end of November. The court noted that a mediation conducted earlier would have been a mediation conducted on false premises unless the claimant disclosed his problem with Mr Dall.

The defendants would have suffered serious prejudice if the claimant could rely on Mr Yates's report. They had responded to Mr Dall's report. The claimant had seen their experts' positions and had the advantage of preparing his new expert's reports in the light of it. The defendants would have to respond again to a wholly new expert report and the trial would have to be adjourned. The deputy judge referred to the following words of Waller LJ (said in the context of late amendments) which he said were directly applicable in this case (from Worldwide Corporation v GPT Limited [1998] EWCA Civ 1894, cited with approval in Swain Mason v Mills & Reeve [2011] 1 WLR 2735 (see post)):

"In the modern era it is more readily recognised that in truth, the payment of the costs of an adjournment may well not adequately compensate someone who is desirous of being rid of a piece of litigation which has been hanging over his head for some time and may not adequately compensate him for being totally (and we are afraid there are no better words for it) 'mucked about' at the last moment. Furthermore, the courts are now much more conscious that in assessing the justice of a particular case, the disruption caused to other litigants by last minute adjournments and last minute applications have also to be brought into the scales."

Taking all these factors together, the claimant's conduct amounted to a serious abuse of the court's process.

Since the deputy master had failed to appreciate that the claimant's conduct amounted to a serious abuse of process, and failed to find that the defendant would suffer serious prejudice if the new expert evidence were allowed in, his decision could not stand. The deputy judge therefore had to exercise the court's discretion afresh.

In the deputy judge's view, the balance of justice as between the parties came down firmly in favour of refusing the application for permission to rely on the new expert.

That conclusion was reinforced by the guidance in Andrew Mitchell MP v News Group Newspapers Limited [2013] EWCA Civ 1537 (outlined here). The deputy judge referred to Practice Direction 23A paragraph 2.7, which provides: "Every application should be made as soon as it becomes apparent that it is necessary or desirable to make it." Accordingly it was the claimant's clear duty to apply to the court for further directions in respect of expert evidence very soon after being informed of the expert's withdrawal. If the new report were to be allowed in, the trial would have had to be vacated, to the detriment of other court users. He said "It is an important factor that the Court should enforce procedural discipline in order to raise standards of time-keeping in the courts, which the Deputy Master did not do."