In the most recent judgment interpreting the new witness statement rules in Civil Procedure Rules Practice Direction PD 57AC (PD57AC), the High Court gave guidance on the circumstances in which it will be appropriate to apply to strike out whole or parts of trial witness statements that do not (or may not) comply with PD75AC.(1) The application was successful in part but overall the judge held that the application as a whole was not justified.
The underlying proceedings were brought by 150 claimants who were owners of flats in Swansea, and who brought claims against Zurich for damages in deceit. The claimants alleged they had been induced to purchase their flats by fraudulent misrepresentations.
In January 2022, the claimants, by their solicitors, served their witness statements. There were 49 witness statements and the makers of those witness statements fell into four broad categories: claimants, conveyancers, mortgage lenders and others. The final category comprised two witnesses: Zurich's surveyor who undertook warranty inspections at the development, Mr Dummer, and the solicitor who acted for the developer, Mr Davies.
In February 2022, the first defendant's solicitors wrote to the claimants' solicitors indicating that they would be writing about the compliance of the claimants' witness statements with PD57AC. The anticipated letter was sent two months later, in April 2022. The letter was 16 pages long and was followed by a 109-page schedule giving particulars of alleged non-compliance.
The solicitors for the claimants responded to the complaints thematically rather than by itemised reference to the schedule. In that letter they said:
1.1.3 Practice Direction 57AC was not intended to encourage a party to perform a line-by-line analysis of a witness statement with a metaphorical scalpel in hand ready to object to or excise a sentence in a witness statement that might stray beyond the bounds of Practice Direction 57AC. That would be inconsistent with the overriding objective, for it would generate satellite litigation and cause the parties to incur unnecessary cost in protracted pre-trial skirmishing. That is particularly so in a case such as this where there is inequality in the financial resources of the parties.(2)
The first defendant applied for an order pursuant to paragraph 5.2 of PD57AC, striking out the entirety of four of the witness statements and parts of a further 29 witness statements on the grounds they did not comply with PD57AC and the statement of best practice appended to it. The application notice appended a revised version of the earlier schedule and was supported by a substantial witness statement by a solicitor for the first defendant with an exhibit running to several hundred pages.
PD57AC compliance
The witness statements of four witnesses, being the two conveyancers and two mortgage lenders, were struck out because the Court held that they contained no relevant evidence from the personal knowledge and observations of the makers but tended to introduce opinion evidence on matters on which His Honour Judge Keyser QC had previously refused to permit expert evidence. Various parts of Davies's witness statement were also struck out, because they contained commentary or opinion on documents or on matters HHJ Keyser QC did not consider fell properly within the scope of his evidence.(3) Certain other parts of the application that were pursued were unsuccessful. HHJ Keyser QC did not provide detail of these in his judgment, other than to say he:
- declined to order Dummer (Zurich's surveyor) to give a new witness statement;
- declined to strike out "stock phrases" from six witness statements; and
- left in place some other parts of Davies's witness statement which the first defendant had asked to be struck out.(4)
For the purposes of this judgment, HHJ Keyser QC did not find it necessary to set out in any detail the reasoning behind his substantive decisions on the application but his guidance on these types of applications can be discerned from his judgment on costs.
Costs
On the issue of costs, the first defendant relied on its success in significant parts of its application and went on to make the following submissions:
- Even on matters where it was unsuccessful, the application had elicited from the Court adverse remarks about the claimants' witness statements, in particular the use of "stock phrases".
- The claimants had never accepted that there was merit in any of the objections raised by the first defendant.
- The application had to be viewed in the context of substantial litigation (damages exceeding £25 million in total).
- The application would have saved some costs in the long run by excluding some evidence from trial.
- It was reasonable for the application to have been prepared in its initial form because the decision in Blue Manchester Ltd v BUG-Alu Technic GmbH & Anor(5) showed that the courts would be willing in principle to give detailed considerations to schedules of objections.
- The first defendant had been entitled to take guidance from the remarks of Mr Justice Fancourt in the Greencastle case,(6) to the effect that it was not convenient or appropriate to leave such objections to be disentangled at trial by protracted cross-examination.(7)
Despite those submissions, HHJ Keyser QC found that the application was fundamentally inappropriate and ordered the first defendant to pay 75% of the claimants' costs on the indemnity basis.(8)
Although the first defendant had some measure of success on the substance of the application and the claimants had never accepted that any of their witness statements were open to any criticism, HHJ Keyser QC found this carried little weight for two reasons:
- The meritorious points were set in the context of a disproportionate and oppressive schedule, much of which was lacking merit. The solicitors for the claimants had also indicated in their letter of 9 May 2022 that they would give further consideration to the matter if the first defendant's solicitors provided a revised schedule having regard to the points raised in their letter, but that invitation had not been taken up.
- Although he had made an order striking out all or part of several witness statements, that did not show the application was justified. Having considered the objections, he had thought it sensible to address them. However, in his view, they could have been addressed without an application, leaving the points to be dealt with at trial by counsel in cross-examination and in submissions.(9)
This case is an interesting new direction for the courts' interpretation of PD57AC and when it might be appropriate for parties to make an application regarding allegedly non-compliant witness statements.
HHJ Keyser QC was "unimpressed" by the reliance of the first defendant on the guidance said to have been drawn from previous cases, in particular the decisions in Greencastle(10) and Lifestyle Equities CV.(11)
He addressed the first defendant's reliance on Greencastle and said:
The remark, to which I was referred as "guidance", was doubtless entirely apposite in the case with which Fancourt J was dealing, but it should not be taken as expressing, far less establishing, any general principle that it is never convenient or appropriate to leave matters of non-compliance with PD57AC until trial.(12)
In respect of Lifestyle Equities CV, HHJ Keyser QC stated that the judge in that case was not purporting to lay down any one rule, but he endorsed the observation in that case that an application is warranted only where there is a substantial breach of PD57AC and that it should be capable of being dealt with on the papers (for further details, see "High Court refuses to strike out passages in fact witness statements").
HHJ Keyser QC emphasised that the Court has a wide array of case management powers and must exercise its discretion with a view to giving effect to the overriding objective. The judge made two observations in this regard:
- "applications for the imposition of sanctions for breach of the Practice Direction should not be used as a weapon for the purpose of battering the opposition"; and
- "when assessing how to respond to a failure to comply with the Practice Direction, a party must use common sense and have regard to proportionality. Before the application in the present case was made, there were sufficient dicta to make it clear, if there had been any doubt, that the power to strike out offending parts of a witness statement will be exercised only where it is reasonably necessary and that in many cases the appropriate course will be for the court to place less, or no, weight on witness evidence that fails to comply with the requirements of the practice direction".(13)
Although the recent judgments on PD57AC appear to agree that an application must be proportionate, it is becoming increasing unclear as to when an application under PD57AC might be appropriate. Therefore, practitioners should remember that while they are entitled to apply, they should carefully consider whether it is "reasonably necessary", or whether the Court might consider that the issues could be appropriately dealt with at trial.
For further information on this topic please contact Simon Hart or Sinead Westaway at RPC by telephone (+44 20 3060 6000) or email ([email protected] or [email protected]). The RPC website can be accessed at www.rpc.co.uk.
Endnotes
(1) Curtiss v Zurich [2022] EWHC 1514 (TCC).
(6) Greencastle MM LLP v Payne [2022] EWHC 438 (IPEC) (Fancourt J).
(10) [2022] EWHC 438 (IPEC) (Fancourt J).
(11) Lifestyle Equities CV v Royal County of Berkshire Polo Club Ltd [2022] EWHC 1244 (Ch) (Mellor J).