The recent case of Kyla Shipping Co Ltd v Freight Trading Ltd  EWHC 376 is a reminder of the difficulty parties face to keep the contents of an advisory report confidential, and reinforces the importance of openness when setting out instructions and the information provided to an expert in a report prepared for court.
There is an important distinction between an advisory report provided by an expert to inform lawyers and their client of possible or actual litigation, and a report provided for the purposes of the litigation.
The former, written for the benefit of the instructing party and not ‘to assist the court’, need not comply with the Civil Procedure Rules (CPR) and may well be written with an expectation that it will remain private and confidential between the expert and that instructing party. The latter, which must be CPR compliant and ‘to assist the court’, should be written with the expectation that it will be disclosed to the other side(s) during litigation.
Confidentiality and the advisory report
What is the significance of the report provided on an advisory basis, rather than as a CPR compliant report?
A lawyer may wish to ascertain whether the grounds exist to bring or defend a claim and may ask an expert to provide a preliminary view – quite often in a ‘stripped down’ report, in order to seek to reduce the cost of the report. This will arise in cases where a significant degree of expertise is needed to identify potential breach of duty, for example in some clinical negligence claims, or where foreseeability of injury may be a complicated issue.
Alternatively, a lawyer may want a preliminary view, where a compromise is being offered before proceedings are issued, as to whether the sum being offered, or a particular aspect of the potential damages on offer, is reasonable.
While in these situations the report does not need to be CPR compliant as it is not intended to be used in the proceedings, or at least not used in that format, the expert is under a duty (and therefore potential liability) to the instructing party to use reasonable skill and care when providing advice.
The expert in these circumstances (and quite possibly the lawyer), does not expect the advice given or the contents of the report, or the instructions provided to the expert, to be liable to be disclosed to the other side in the litigation, particularly if, when the claim is not abandoned or settled but is commenced in court, that expert is subsequently instructed as the CPR compliant expert in the claim.
However, it is not that straightforward.
Even if this is the only involvement of the expert, this report may not be ‘privileged’ – i.e. it is not protected from being shown to the other side in the dispute – unless ‘the dominant purpose’ for it being obtained is litigation. And, generally, the pre-proceedings advisory report, if not necessarily the instructions, are not privileged if the same expert is instructed as the CPR compliant expert for the purposes of the proceedings. This is because of the duty to inform the court of any details relevant to the expert’s opinion in their subsequent CPR compliant report.
So, if an expert has provided an advisory or preliminary report for one party or the other, and then is being considered for use as a single joint expert (SJE) by both parties, it is likely that the advisory report would have to be disclosed to the other party. In addition, the expert would need to:
- Make it clear to the party who had already instructed them that they would have to be able to disclose the previous report to the other party; and
- Disclose the fact that they had previously provided a report to the other party before any question of their being appointed as an SJE could arise;, and
- Consider whether there was any information they had been provided when preparing the advisory report which might create a conflict or embarrass either party. For example, anything that came to light (or was provided to them) that might show either party in a bad light or might be of a nature which would not be of common knowledge to both parties (for example, by disclosing the previous report) and could prejudice the position of either and would not be expected to come to light in preparing a report as a SJE, in which case they would have to decline to be put forward as a SJE.
All of which means that it would probably not be a good idea, having provided an advisory report, to allow oneself to be put forward as a possible SJE.
The relevant privilege in this situation, litigation privilege, applies to communications which are made between a lawyer (or the party their self) and a third party, for example, an expert.
Privilege only attaches if ‘the dominant purpose’ of the communication is to conduct or aid the conduct of ongoing or prospective litigation, or if the document was created for the purpose of conducting litigation in reasonable prospect. It is probably obvious enough if litigation is ongoing – for example, if someone has been sued and wishes a preliminary view from an expert as to whether they should defend the claim or just accept liability. Any advisory report obtained for that purpose would be privileged along with its instructions (subject to the expert being re-used as the CPR compliant expert).
But at what point are proceedings ‘reasonably in prospect’?
In a case where Sotheby’s was appointed to sell a painting and the buyer raised concerns that it was a fake, Sotheby’s commissioned an expert report, and subsequently instructed lawyers who commissioned a second report. These two reports were exchanged with the seller’s report. On the basis of these reports, Sotheby’s determined that the painting was a fake and repaid the purchaser and began proceedings to obtain repayment of the purchase price from the seller. The seller wanted disclosure of correspondence between Sotheby’s and their experts. It was held that the subsequent litigation was not the dominant purpose of the expert reports – while they no doubt had potential litigation in mind, the terms of the agreements with the experts confirmed the importance of the commercial decision whether or not to rescind the contract. The contract of sale required written evidence of doubt about the authenticity of the painting if the contract was to be rescinded.
The decision of Kyla Shipping Co Ltd v Freight Trading Ltd is another example of the difficulty of showing litigation as the dominant purpose before litigation has commenced.
Documents came into existence as the result of an investigation into allegations of mismanagement in order to support the allegations being made in correspondence. Although litigation between the parties was in possible contemplation in relation to a mis-pricing claim, that did not relate directly to the mismanagement allegations. As a consequence, the documents about the mismanagement claim were not covered by litigation privilege.
However, even if ‘the dominant purpose’ is found to be the litigation, as mentioned above, litigation privilege will almost certainly fall apart if the same expert is instructed in the litigation.
Confidentiality and the CPR compliant report
Let’s consider the position with regard to the CPR compliant report. As I have written before, a CPR compliant report:
“…must state the substance of all material instructions, whether written or oral, on the basis of which the report was written.” CPR 35.10(3)
“The expert’s report must contain a statement setting out the substance of all facts and instructions which are material to the opinions expressed in the report or upon which those opinions are based.” PD35 3.2(3)
As the substance of all material instructions the expert has received – whether in writing or orally – is to be included in the report, the expert should summarise the instructions to enable the judge to understand what issues the expert is reporting on. Any instruction, for example, not to mention an unfavourable aspect of the case, even if given on the telephone as a further instruction supplemental to a letter of instruction, would have to be included in the report. Also, instructions not to address certain aspects of the case, or to disregard certain documents or witness statements. Guidance 55 states:
The mandatory statement of the substance of all material instructions should not be incomplete or otherwise tend to mislead. The imperative is transparency. The term “instructions” includes all material that solicitors send to experts. These should be listed, with dates, in the report or an appendix. The omission from the statement of ‘off-the-record’ oral instructions is not permitted. Courts may allow cross-examination about the instructions if there are reasonable grounds to consider that the statement may be inaccurate or incomplete.
Those ‘instructions’ will include references to any documents provided by the lawyer or the client as part of the expert’s instructions in the matter, such as witness statements or reports from other experts, and therefore are material to the opinions expressed in the report.
None of this is ‘privileged’ against disclosure to the other side(s) during litigation, although the documents themselves should not be disclosed to the other side(s), unless (in accordance with CPR35.10(4)) the court is satisfied, on an application by the opposing party, that there are reasonable grounds to consider the expert’s statement of their instructions to be inaccurate or incomplete.
This lack of privilege may go further and include the entirety of a report prepared for the litigation but not disclosed in support of the claim for some reason – for example, there may be circumstances where the report is unhelpful, of poor quality, or it may no longer be possible for the expert to attend court (through death, illness or for other reasons).
Where a party seeks to change experts and needs the court’s permission to do so, which will be the normal situation where an expert has been identified as having prepared a report, then the court will generally require that the draft and final reports of the first expert be disclosed as a condition of relying upon the evidence of the second. In other words, the party is required to waive the privilege which would normally apply to the report prepared for the purpose of the litigation until such time as it is disclosed.
- An advisory report will only be privileged from disclosure if it is found that the dominant purpose for it being obtained was litigation. The existence of any other purpose may well undermine this.
- Even if the advisory report is privileged, its contents are likely to be revealed if the same expert is then used to prepare the CPR compliant report for the litigation.
- An advisory report should, therefore, be written on the basis that it is quite likely to be disclosed to the other side in the litigation.
- A CPR compliant report must set out clearly the expert’s instructions, whenever and however they are communicated to the expert, and make clear the source of all of the material information relied upon within the report and in reaching an opinion.
- There must be transparency about the information (and the source of such information) on which an expert relies.
Giles Eyre is a retired barrister and an Associate Member of Chambers at 9 Gough Chambers, London, having practised for many years in the field of injury claims and at the interface of law and medicine. He continues giving training and presenting workshops for experts on providing effective expert reports and evidence, and on medico-legal issues, in his own right and for training organisations. He is co-author of Writing Medico-Legal Reports in Civil Claims – an essential guide (2nd edition 2015), and author of Clinical Practice and the Law – a legal primer (October 2018) both published and sold by Professional Solutions Publishing (www.prosols.co.uk) and through book retailers, and regularly writes articles on these subjects. He blogs on issues relevant to court experts in civil claims at www.Medico-LegalMinder.net.
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