The Full Court of the Federal Court of Australia recently overturned the decision of New Aim Pty Ltd v Leung [2022] FCA 722 (Trial Decision). Amongst its findings was that the Trial Judge erred in rejecting the entirety of an expert report based on the involvement of the Applicant’s solicitors in its preparation.
KEY POINTS
- There is no one universal rule governing the level of assistance practitioners may provide in drafting expert reports.
- There is no legal obligation for practitioners to disclose their involvement in preparing expert reports.
- In situations where practitioners are involved in recording an expert’s evidence, they must ensure an expert report is drafted solely from the information communicated to them by the expert.
THE TRIAL DECISION
New Aim Pty Ltd (New Aim) has a large, online retail business in Australia and sources products from a range of suppliers in China. At trial, one issue in dispute was whether a former employee had disclosed confidential information to competitors, as was alleged by New Aim. The allegation was that the employee had breached his employment contract, obligations in equity and had contravened s183 of the Corporations Act 2001 (Cth).
New Aim’s solicitors retained an expert witness, Ms Chen, to prepare a report advising on the Chinese goods supplier industry. The Trial Judge was not satisfied that Ms Chen’s report contained the witness’ honest and independent opinions or that no significant matters had been withheld[1]. The following factors were relevant to that decision:
- Ms Chen’s finalised witness statement attaching her 16-page report was dated only one day after she had received her formal letter of instruction;
- draft versions of the report had been sent to New Aim’s solicitors for comment, who sent emails to Ms Chen suggesting she make amendments; and
- New Aim’s solicitors had ‘put together’ versions of the report, including a version that was substantially the same as the final version[2].
In the opinion of the Trial Judge, the involvement of New Aim’s solicitors in the preparation of Ms Chen’s report ‘went far beyond the permissible scope of involvement of lawyers who retain an independent expert in order to give evidence in a proceeding’[3] and it was therefore rejected in its entirety.
THE APPEAL
In New Aim Pty Ltd v Leung [2023] FCAFC 67 (the Appeal) the Full Court unanimously overturned the Trial Decision, ordering a retrial before another Federal Court justice. Regarding Ms Chen’s report, the Full Court was not prescriptive when considering the obligations of solicitors in their conduct with expert witnesses, noting that ‘there is no one rule of practice which covers all experts or all situations’[4].
The Full Court clarified the inference that Ms Chen had drafted the report within one day of receiving the formal letter of instruction, observing it was common for issues to be discussed with an expert before the formulation of the question posed to the expert was finalised. Doing so can avoid the laborious process of asking a question, only to later have its inadequacies pointed out[5]. The Court did however agree with comments from Lee J in BrisConnections that annexing a letter of instructions to an expert report should not be done merely out of a ‘stylised ritual’[6]. In the reasons, direction is given that Material placed before the court should make clear what has been provided to the expert, and the questions they had been asked to address[7].
Departing from the Trial Judge’s view, the Full Court observed that although it may be desirable, there was no legal obligation for practitioners to disclose:
- their involvement in the preparation of a report; or
- the correspondence with an expert regarding the report’s preparation to be disclosed within the report.
Whether there is an ethical obligation to disclose depends on the particular circumstances[8]. The legal or ethical necessity of including within a report disclosures as to whether the expert has relied upon oral advice provided by a practitioner also depends on the circumstances, including the nature of the advice and the extent it is relied upon[9].
The Full Court was critical of the lack of reasons for the Trial Judge’s rejection of paragraphs [1] to [5] of the report containing factual material, commenting that the ‘drafting of written evidence of a factual nature by a solicitor from a statement or other material provided by a witness is far from unusual’[10]. Further, the Court found the reasoning in rejecting the opinion evidence at paragraphs [55] to [60] contained factual errors and errors of approach, absent which the evidence may not have been rejected[11].
LESSONS FOR PRACTITIONERS
Legal practitioners are bound by legal and ethical requirements when gathering or preparing evidence into an appropriate form for hearing – central to these is the requirement not to influence a witness’s evidence[12].
Whilst tempering the legal obligations of disclosure outlined in the Trial Decision, the Appeal emphasised the importance of transparency; the material placed before a Court should make clear what has been provided to an expert, and the questions the expert was asked to address[13].
The Expert Evidence Practice Note and Harmonised Expert Witness Code of Conduct, set out the Federal Court’s expectations for the engagement of expert witnesses. Whilst there is no prescribed approach for all circumstances in which an expert may be engaged, the paramount obligation of practitioners is preserving the independence of witnesses.
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[1] Trial Decision [77]
[2] Ibid [55]
[3] Ibid [76]
[4] Appeal [120]
[5] Ibid [89]
[6] BrisConnections Finance Pty Ltd v Arup Pty Ltd (2017) 252 FCR 450 [71]
[7] Appeal [89]
[8] Ibid [121]-[122]
[9] Ibid [123]
[10] Ibid [112]
[11] Ibid [126]
[12] Ibid [119]
[13] Ibid [89]
