Commercial Court finds witness evidence less reliable where witnesses did not refresh memories from contemporaneous documents

In a recent decision, the Commercial Court has rejected a party's witness evidence on a key issue, commenting that the fact the witnesses did not refresh their memories from contemporaneous documents meant their evidence was "far less likely to be reliable than it might otherwise have been": Global Display Solutions Ltd v NCR Financial Solutions Group Ltd [2021] EWHC 1119 (Comm).

The witness statements in the present case were signed before 6 April this year and so were not subject to the new requirements relating to trial witness statements in the Business and Property Courts, at Practice Direction (PD) 57AC and Appendix, including in particular the requirement to list documents a witness has referred to or been referred for the purpose of providing the evidence set out in their statement. However, it is clear that the judge did not consider the new requirements to affect his decision. He commented that the new rules contemplate that witnesses will be shown contemporaneous documents, particularly those they had seen at the time of the relevant events.

It is true that the new PD and Appendix do not preclude a witness being shown contemporaneous documents. However, the general tenor of the new provisions is to discourage over-reliance on documents in preparing witness evidence, and to distinguish between what is spontaneous recollection and what may have been influenced by reviewing documents, with the implication appearing to be that the former is somehow preferable.

The witness evidence working group's implementation report, in presenting opposing views among the group as to the proposed requirement to list documents to which the witness has been referred, noted that those in favour took the view that the court should know "the extent to which what is presented as factual witness testimony in chief" may have been influenced by going through the documents. It added that the question of what documents to show a witness should be given careful thought because "it may affect the weight to be given to what the witness will claim as recollection to have an understanding of the extent to which it was spontaneous, recollection refreshed from documents the witness saw at the time, or testimony prompted by reviewing documents the witness did not see at the time". It noted a concern among those opposed to the new requirement that a court might draw adverse inferences if the list indicated that a witness had been shown large numbers of documents.

The recent decision therefore illustrates the difficult judgments that will need to be made in any given case as to whether a witness should be shown contemporaneous documents, in the hope that by refreshing their memory they will be able to give more complete and ultimately more reliable evidence, or whether by doing so there is a risk that a court might consider their evidence to be primarily reconstruction rather than recollection and potentially discount it on that basis. Where a decision is taken to show a witness documents, parties should also bear in mind the new requirement at paragraph 3.7 of the Appendix to identify (where practicable) any documents used to refresh a witness's recollection on important disputed matters of fact.

Background

For many years prior to January 2013, the claimants ("GDS") supplied screen displays and component parts to the defendants ("NCR") for use in bank automatic teller machines and retail point of sale systems manufactured by NCR.

As part of the contractual arrangements, NCR was required to supply GDS with regular forecasts setting out its projected demand for such products on a rolling 12-month basis. NCR's last forecast was provided on 14 January 2013 and projected a demand for over 176,000 displays over the next 12 months, at a value of over US$50 million. Two days later, NCR informed GDS that it had taken the manufacture of screen displays in-house and, without prior warning, it cancelled around US$5.1 million of existing purchase orders and reduced all its forecasts to zero.

GDS brought claims on various bases including breach of contract, deceit, conspiracy, and the tort of intimidation. NCR contended that the claims were settled by a "Letter of Agreement, Release and Waiver" entered into between the parties.

The court gave judgment on certain issues relating to the claims following a hearing in February 2021. This included issues as to whether GDS's claims in breach of contract, deceit and conspiracy were well-founded in principle, leaving aside questions of reliance and quantum. The central factual issue the court needed to resolve in relation to these issues was whether false forecasts started to be given from July 2011, as GDS alleged, or some other date (NCR having admitted the falsity of the forecasts given from the end of April 2012).

This post considers the court's comments on NCR's witness evidence relating to that issue, and in particular on certain provisions of the new PD 57AC and Appendix which apply to trial witness statements signed on or after 6 April 2021 in proceedings in the Business and Property Courts. The relevant provisions are as follows:

• Paragraph 3.2 of PD 57AC: "A trial witness statement must set out only matters of fact of which the witness has personal knowledge that are relevant to the case, and must identify by list what documents, if any, the witness has referred to or been referred to for the purpose of providing the evidence set out in their trial witness statement...."
• Paragraph 2.6 of the Appendix: "During evidence in chief given otherwise than by witness statement, the witness’s memory may be refreshed by being shown a document, but only if the witness created or saw the document while the facts evidenced by or referred to in the document were still fresh in their mind, so that they would have known if they were accurate or inaccurate."
• Paragraph 3.4 of the Appendix provides that a trial witness statement should refer to documents, if at all, only where necessary, and states that (subject to certain exceptions) it will generally not be necessary for a trial witness statement to refer to documents, beyond providing a list to comply with paragraph 3.2 of PD 57AC. It adds: "Particular caution should be exercised before or when showing a witness any document they did not create or see while the facts evidenced by or referred to in the document were fresh in their mind."

Decision

Following a detailed review of the evidence, and in particular the documentary evidence, the court (Jacobs J) concluded that false forecasts were given during the entire period from July 2011 up to when NCR revealed its hand in January 2013.

The judge stated that his conclusion was reinforced because there had been no clear evidence from any of NCR's witnesses which identified April 2012 as the start-date for the false forecasts, or explained why the forecasts were false after that date but not before.

NCR's witness statements did accept that false forecasts were given, stating that there was "a short period" in which forecasts were inaccurate, and that the data "might not have been accurate for the entire period it covered", but none of them clearly stated when the forecasts became false or identified April 2012 as the start date for falsity.

The judge noted that counsel had "sought to make a virtue of the vagueness of NCR's evidence" by emphasising that the relevant events occurred many years previously, and the witnesses were giving their best recollection of events by searching their memories rather than looking at a large volume of contemporaneous documents. In other words, NCR did not seek to have its witnesses reconstruct what probably happened from documents in the disclosure, submitting that the most likely period had to be worked out from the contemporaneous documents. NCR were in fact critical of GDS's witnesses for, as they put it, reconstructing their recollection by reference to a careful reading of the contemporaneous documents, rather than giving evidence of what they actually recalled.

The judge commented:

"I am not persuaded that there was any virtue in the way in which NCR's witnesses had given their evidence in their witness statements, vague as it was, as to the period during which false forecasts were given. There was a significant issue in the present litigation not only as to whether false forecasts were given at all..., but the period of those false forecasts. There is no reason at all why NCR's witnesses should not have considered, and indeed looked carefully, at the significant volume of contemporaneous documentation before giving their evidence in relation to the question of when the forecasts became false to their knowledge."

The judge noted that the new PD 57AC and Appendix were introduced after witness statements had been served in the present litigation (and therefore did not apply). However, he said that even under the new rules "it remains permissible for witnesses to refresh their memory from contemporaneous documents before setting out their evidence in witness statements". He noted that the sections cited above (paragraph 3.2 of PD 57AC, and paragraphs 2.6 and 3.4 of the Appendix) contemplate that witnesses will be shown contemporaneous documents, particularly those they had seen when the events were fresher in their minds.

He said that if NCR's witnesses did not wish to refresh their memory from contemporaneous documents, or if NCR did not wish them to do so, that was "surprising although it is not impermissible". However, it meant their evidence was "far less likely to be reliable than it might otherwise have been". It also means there was no sound evidential foundation for NCR's case as to when false forecasts came to be given.

Note: Permission to appeal against this decision has been refused.