Evidence – expert evidence preparation – fact evidence preparation
A five-member bench of the Full Court has overturned the first instance decision of Justice McElwaine in which his Honour rejected the entirety of New Aim’s expert witness’ evidence on the basis that he was not satisfied that the opinions expressed in the report truly represented the expert’s honest and independent opinions.
A key feature of the first instance decision was Justice McElwaine’s marked disapproval of the extent of solicitor involvement in the drafting of the expert report and the fact that that involvement was not disclosed in the report.
In addition to overturning the first instance decision and ordering a retrial on the substantive issues (breach of confidence and related claims), the Full Court has provided legal practitioners with some useful guidance on expert evidence preparation.
The core message from the Full Court’s judgment is that practitioner involvement in the drafting of expert evidence is not problematic per se, although disclosure of such involvement is desirable. What must be guarded against is a practitioner influencing that witness’ evidence.
We also consider some helpful recent authority from single judges which is relevant to the drafting of fact evidence.
The substantive dispute, so far as relevant to this appeal, relates to New Aim’s claims against its previous employee (Mr Leung) for breach of confidence, breach of contract and contravention of section 183 of the Corporations Act 2001 (Cth).
New Aim, a large online retail business in Australia who sources its products from a range of Chinese suppliers, alleged that Mr Leung disclosed the identity and contact details of New Aim’s product suppliers to New Aim’s competitor Broers Group Pty Ltd and used that information to benefit both Broers and another of New Aim’s competitor’s, Sun Yee International Pty Ltd. New Aim also claimed that Broers and Sun Yee had each received confidential information in circumstances that bound them to an equitable obligation not to use it.
First instance decision
Justice McElwaine dismissed New Aim’s breach of confidence, breach of contract and s 183 claims largely on the basis that he did not consider the identified information to be confidential. In reaching that conclusion, McElwaine J rejected the entirety of the written and oral evidence of New Aim’s expert witness, Ms Chen. This case note focuses on the Full Court’s finding on that evidentiary issue.
Full Court’s decision
New Aim appealed the first instance decision in relation to each of the substantive issues as well as the exclusion of Ms Chen’s evidence. Presumably due to the significance of the evidentiary issue for practitioners, an enlarged bench of the Full Court heard the appeal. Justices Kenny, Moshinsky, Banks-Smith, Thawley and Cheeseman delivered a unanimous judgment allowing the appeal on all grounds and remitting the matter for retrial.
The Full Court’s reasons provide guidance on the following three issues:
(a) The proper preparation of fact evidence.
(b) The proper preparation of expert evidence.
(c) The timing and content of letters of instruction.
Proper preparation of fact evidence
Ms Chen’s expert report was comprised of 60 paragraphs. Paragraphs 1 to 55 were fact evidence and paragraphs 56 to 60 were opinion evidence. Justice McElwaine rejected the entirety of Ms Chen’s report. The Full Court found that the primary judge’s reasoning for rejecting Ms Chen’s evidence focused on the opinion evidence paragraphs, and that no separate explanation was given for why the factual material was rejected.
The Full Court observed at  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.” The Court confirmed that it is appropriate for practitioners to draft factual evidence from a statement or source material provided by the witness, even where that witness is engaged as an expert witness.
Proper preparation of expert evidence
In some practice areas it is virtually unheard of for legal practitioners to draft any portion of an expert report. However, in other practice areas, particularly intellectual property, this is a standard approach. In many intellectual property cases involving the use of experts, a similar approach to drafting fact evidence is adopted, whereby the expert conveys his or her opinion to the lawyer and the lawyer then drafts the text reflecting that opinion for the expert’s approval.
Justice McElwaine disapproved of this approach, although he accepted that in limited circumstances it might be appropriate for an expert report to be “settled” in an admissible form by a lawyer. His Honour said at  “[i]t may be perfectly appropriate, such as in cases where an expert is unfamiliar with the form and content requirements for an expert opinion report, for that document to be settled in an admissible form by someone else, but then in my opinion, only if that fact is disclosed in the report.”
The Full Court clarified that there are circumstances where it may be appropriate for a practitioner to have a more active role in the drafting of expert evidence, provided that one paramount rule is adhered to - the practitioner must not influence the witness’ evidence. At - the Full Court said (emphasis added):
“There are various ethical requirements on legal practitioners involved in the process of gathering or putting evidence into an appropriate form for hearing. At the core of these is a requirement not to influence a witness’s evidence. This applies both to witnesses of fact and expert witnesses providing opinion evidence. Legal practitioners commonly take proofs of evidence from, or draft affidavits of, witnesses of fact. These are commonly drafted from oral communications which occur in conference or written material provided by the witness or which are otherwise available. It is less common for this to occur in the preparation of expert evidence, but there are reasons why it might occur.”
The Full Court observed that there is not one rule or practice covering all situations involving expert witnesses, but provided the following useful examples:
- For medical opinion experts, expert valuers preparing a valuation and accountants preparing a report on economic loss, typically the expert would draft the report rather than the legal practitioner (although there may be discussion in relation to drafts of the report).
- Where there are physical, language or resource difficulties, it may be appropriate for legal practitioners to be involved in the process of recording the evidence, including by drafting the report.
Where the situations referred to in (b) arise, care must be taken to ensure that the legal practitioner does not suggest what the expert’s evidence should be. However, the Full Court observed at  that it is “difficult to conceive of a situation in which a legal practitioner, acting appropriately and ethically, could draft an expert’s report otherwise than on the basis of what the expert had communicated to the legal practitioner to be his or her evidence.”
At first instance, McElwaine J considered that practitioner involvement and all correspondence relating to the preparation of the report must be disclosed in the report. At - of their reasons, the Full Court made clear that this might be desirable, but there is no legal obligation for this to occur. Whether or not there is an ethical obligation depends on the particular circumstances.
Timing and content of letters of instruction
Justice McElwaine was particularly troubled by the timing and content of the letter of instruction provided to Ms Chen. His Honour commented that he found it “remarkable” that Ms Chen was sent a letter of instruction requesting her to provide detailed information, all of which was able to be answered by Ms Chen in her expert report the following day in 16 pages and 60 paragraphs (not including attachments).
The Full Court did not take any issue with the timing and content of the letter of instruction and made the following useful observations at -:
- “It is not unusual for a final letter of instructions, containing the final form of the questions to be answered by an expert, to be prepared shortly before an expert report is finalised.”
- “It would be expected, for example, that a solicitor would engage with an expert in a specialised field of scientific knowledge about how to frame a question so as not to give rise to a nonsensical question or one which misses the real issues or one which fails to engage with all of the issues.”
- “[Federal Court] Rule 23 does not require every single question asked of the expert during the course of the expert’s retainer to be identified. It requires the report to identify the question the expert was asked to address in his or her report. That question may or may not be formulated at the time the expert was first retained. In the present case, the question was not finally reduced to writing until a day before the report was filed, a fact which was made clear by the material filed with the report.”
The following five guidelines can be discerned from the Full Court’s judgment:
- There is no blanket prohibition on practitioners drafting expert evidence based on the material and comments provided by an expert.
- For all evidence (fact and expert), the paramount concern is to ensure that the practitioner does not influence the witness’ evidence.
- While there is no rule or practice covering all situations, it may be appropriate for the practitioner to do the drafting where there are physical, language or resource difficulties.
- There is no legal obligation to disclose the nature of any practitioner involvement in preparing expert evidence. However, these authors consider that including a description of the process adopted in preparing the evidence is a prudent course to adopt.
- The expert evidence must identify the question or questions the expert was asked to address in their evidence, but that question or those questions need not be formulated at the time the expert was retained and can be reduced to writing just prior to the filing of the evidence, or in the report itself.
Post-script –while we’re on the topic of evidence…
Shortly before delivering judgment in New Aim, one of the members of the Full Court (Thawley J) dealt with another issue of evidence preparation, this time in the context of evidence of fact in a case involving alleged contraventions of the Australian Consumer Law. That case (Girchow Enterprises Pty Ltd v Ultimate Franchising Group Pty Ltd (Final Hearing)  FCA 420 at -) and Kane’s Hire Pty Ltd v Anderson Aviation Australia Pty Ltd  FCA 381 at - warrants mention.
In Girchow Enterprises, Thawley J raised concerns about striking similarities between passages of evidence contained in affidavits given by different deponents, relating to the question of reliance. Given the similarities, his Honour inferred the passages “were ‘cut’ and ‘pasted’ between affidavits, before being altered in minor ways”. Justice Thawley observed that several consequences flowed from this, including that “the affidavit evidence about reliance [was] called into question”, that it “exposed [the witnesses] to an attack on credibility” and that the practice “[made] it more difficult, and sometimes impossible, to give serious weight to the evidence”.
At -, Thawley J issued the following reminder – to the extent one was necessary:
“…an affidavit must reflect a witness’s evidence, not the evidence which the legal practitioner would prefer to see in light of the case which the legal practitioner has pleaded or wishes to run. A legal practitioner must not suggest to a witness what the witness’s evidence should be. The placing of material in an affidavit which is not based on what the witness has instructed and is taken from a different witness’s affidavit – such as an account of events or a statement about what a person relied upon – amounts, in substance, to a suggestion about what the witness should say.
Where it appears that parts of affidavits have been copied from other affidavits, doubt is cast on the integrity of the whole process by which the affidavits have been prepared. This inevitably affects the assessment of the reliability of the whole affidavit. The problem is particularly acute where evidence of conversations appears to have been drafted in this way. It suggests a lack of attention on the part of the drafter of the affidavit to accurately recording the deponent’s actual recollection of what was said, or the gist of what was said, and risks causing a deponent to swear or affirm the truth of something outside his or her knowledge.”
In Kane’s Hire, Jackman J discussed (at -) when it is appropriate for evidence to be given in direct speech – and, perhaps more importantly, when it is not appropriate to do so. Observing that there is “ample authority for the proposition that there is no rule in the law of evidence in Australia that evidence of conversations must be given in direct speech”, Justice Jackman gave the following pithy (and helpful) summary of general principles applying to the form of evidence of conversations (citations omitted):
- “The form of the evidence should correspond to the nature of the actual memory the witness has of the conversation…. There is no reason in the abstract to think that evidence in direct speech is more reliable or credible than evidence in indirect speech, or vice versa.
- If the witness remembers only the gist or substance of what was said, and not the precise words, then the evidence should be given in indirect speech (also known as reported speech), in terms which reflect the witness’s actual memory….
- If the witness claims to remember particular words or phrases being used, then those words or phrases should be put in quotation marks to indicate that they are verbatim quotations, even if the evidence is otherwise given in indirect speech….
- If the witness genuinely claims to recall the actual words used in a conversation, then the evidence should be given in direct speech; that is, quoting the words as actually spoken…. Apart from rare cases of photographic memory, this may well be the case where the witness has made a detailed contemporaneous note of the conversation, and has refreshed his or her memory from the note (in which case this should be expressly stated along with the tender of the note).
- Evidence given in direct speech should not be prefaced by the phrase that the conversation occurred “in words to the following effect”. That expression blurs the important distinction between verbatim memory and gist memory, and leaves the Court unable to ascertain which kind of recollection is being claimed by the witness….
- Evidence of a witness who claims to remember the exact words of a conversation, but who is found after cross-examination to have exaggerated the nature and quality of his or her memory, may well suffer an adverse effect on his or her credibility (the weight of which will depend on all the circumstances). However, the inability to cross-examine in that manner a witness who gives evidence in indirect speech is not unfairly prejudicial within the meaning of s 135 of the Evidence Act 1995 (Cth)….”
The authors consider that both of these cases provide useful guidance for practitioners. Fact evidence must be based on the witnesses’ own evidence, not a general structure which has been developed by solicitors to support their case theory. Given the fallibility of memory, if witnesses do not recall conversational exchanges precisely, evidence of speech should be given in indirect speech. Failure to comply with either of these general principles is likely to affect the witness’ credibility (and the strength of your client’s case).