Trial witness statements: High Court decisions highlight importance of compliance with Practice Direction 57AC

Two recent High Court decisions have highlighted the importance of complying with Practice Direction 57AC when preparing trial witness statements.

First, in Fulstow v Francis [2024] EWHC 2122 (Ch), the court dismissed a multi-million pound development investment claim after heavily criticising the claimants' witness evidence. The judge decided he could have "no confidence" in the truthfulness of three witness statements relied on by the claimants due to their serial non-compliance with PD57AC, and therefore placed no weight on them. This ultimately contributed to his decision to dismiss the claim.

Second, in IlliquidX Ltd v Altana Wealth Ltd [2024] EWHC 2191 (Ch), the court ordered the claimant to redraft two witness statements due to breaches of PD57AC.

Practice Direction 57AC on trial witness statements in the Business and Property Courts was introduced in 2021 in response to concerns around "over-lawyered" witness statements, and statements that were over-long, argumentative, or contained irrelevant material. Despite these reforms having been in place over three years ago, these decisions show that issues continue to persist in practice.

Background

PD 57AC sets out the detailed requirements for the preparation of trial witness statements in the Business and Property Courts. Some key provisions include that 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”;
• “… should be prepared in such a way as to avoid so far as possible any practice that might alter or influence the recollection of the witness”;
• “… should not … seek to argue the case … set out a narrative derived from the documents … or include commentary on other evidence in the case”;
• should be based on a record made of evidence obtained by an interview, which "should avoid leading questions where practicable, and should not use leading questions in relation to important contentious matters"; and
• unless the court otherwise directs, must include a confirmation of compliance signed by the witness and must be endorsed by a certificate of compliance signed by the legal representative.

In Fulstow, the dispute centred on an investment the claimants alleged to have made in Capital Land (EDA) Swindon Limited, which owned significant development land near Swindon. The core of the claimants' case was that they made payments to the defendant for a substantial shareholding in the company. The core of the defendant's case was that the payments were an initial commitment fee pending a wider agreement, which never materialised. The judge found that "neither side's case theory is entirely consistent with the documentary record". Moreover, much of the discussion leading up to and following those payments took place verbally. The witness evidence relied on by the parties therefore played a crucial role in determining the outcome the claim.

The defendant submitted that the court should strike out three of the claimants' witness statements, including the statements of both individual claimants, or alternatively accord them no weight, due to failures to comply with PD 57AC.

In IlliquidX, the dispute concerned allegations that the defendants had misused confidential information provided by the claimants.

The defendants applied for an order that the claimant was not entitled to rely on two of its witness statements, and should be required to redraft them, due to breaches of PD 57AC. They also sought an order that the claimant's solicitor, who signed the certificates of compliance for the statements, should provide a witness statement explaining the process by which the original statements were prepared.

Decision

Fulstow

The High Court (David Stone sitting as a deputy High Court judge) declined to strike out the witness statements since that would leave the claimants without any evidence, or would require the testimony to be given orally and so prolong the trial. However, the judge concluded that he could place no weight on the relevant witness statements, given the failures in compliance.

The judge found that the statements were "on their face … clearly inadequate". The catalogue of failures included: (i) failure to include the witness's confirmation of compliance and, in one case, the solicitor's certificate of compliance; (ii) failure to include a list of documents to which the witness was referred; (iii) reciting events based on the documents, seeking to argue the case and commenting on other evidence; (iv) addressing matters outside of their personal knowledge; and (v) including very similar wording in two statements, which appeared to be copied from one another (therefore suggesting that they had not been the product of an interview formed of open questions).

Further, and somewhat unusually, due to the claimants' waiver of privilege over a number of documents, the judge was able to consider the way in which the witness statements were actually prepared. This helped the judge to conclude that the statements did not represent the witness's "independent recollection of events". In particular, the judge pointed to an "aide memoire" provided to the two claimants by their solicitor which summarised their case and identified questions and possible responses. The judge found that this was a clear breach, demonstrating "the very behaviour that PD 57AC is aimed at preventing". It was contrary to the requirement not to ask leading questions and would, the judge said, clearly have the effect of altering or influencing the witness's recollection.

There was also correspondence from one witness (the first claimant) to another providing proposed answers to questions raised by the solicitors (which were then adopted in full), and sections of the statements appeared to have been copied from each other and from the particulars of claim.

Due to these failures, the judge concluded that the witness statements were not the witnesses' independent recollections of events, but were based heavily on what the claimants' solicitors, or the first claimant, said they should say. Accordingly, where they were not corroborated by other sources, the judge had no confidence that they were truthful.

The claimants applied on the first day of trial to rely on further witness evidence which purported to cure these defects. However, the application was denied, the replacement statements themselves being non-compliant, including because the lists of documents to which the witnesses had been referred, as set out in the statements, simply referred to the pleadings, the witness statements, and both parties' disclosure. This was clearly and blatantly non-compliant with PD 57AC, as it amounted to a statement that the witnesses had looked at everything, which did not assist the court in weighing their evidence.  

The judge was also critical of the claimants' solicitor for signing a certificate of compliance in two of the statements, commenting that he could not see how the solicitor could have believed that the statements complied with PD 57AC.

IlliquidX

The High Court (Chief Master Shuman) granted the application for an order requiring the two witness statements to be rewritten, but not the order requiring the solicitor to explain how the original statements were prepared. 

The Chief Master emphasised that witness statements should be the witness's evidence of events within their knowledge, and be "tethered" to the case the party is advancing at trial. In this case, the Chief Master accepted, it was hard to resist the defendants' conclusion that the statements were "document led". It was "not clear from the statements how far the evidence reflected what the witness actually remembered of events or simply recalled events from the documents".

The Chief Master said that the overall sense given by the witness statements was that they had been constructed by reference to documents. He was mindful of arguments from the claimant that trial witness statements should not be over-analysed to look for instances of purported non-compliance, and applications under PD 57AC should not allowed to be weaponised. However, on balance, he considered it was proportionate to order the statements be redrafted to comply with PD57AC.

However, the Chief Master made it clear that the order did not amount to a finding of improper conduct on the part of the solicitor, and it stopped short of ordering the claimant's solicitor to explain how the previous statement had been drafted.