Introduction
Facts
Decision
Comment
The decision in Mansion Place Ltd v Fox Industrial Services Ltd(1) is the first to give substantial guidance on the new witness statement rules under Practice Direction (PD) 57AC. Some of the main points that arose from this judgment were that parties should:
- only list the documents used to refresh the memory of the witness;
- use the statement of best practice as a checklist; and
- follow the principles of PD 57AC.
The defendant (Fox) had agreed to design and build an extension to and refurbishment of a student accommodation for the claimant (Mansion). The project was delayed and the contractual completion dates were missed. This resulted in a dispute regarding Mansion's right to deduct liquidated damages from sums claimed by Fox in a payment notice.
The key issue was whether, on 14 October 2020, Mark Kite, Fox's managing director, had entered an oral agreement by telephone with Mansion's director, Shankar Ramanathan. Fox alleged that in this phone call, Mansion had agreed not to deduct liquidated damages from Fox as regards the project delays, and Fox had agreed not to claim any loss and expense. Mansion averred that no binding contract had been formed, whereas Fox maintained that there was a binding agreement or, alternatively, that the liquidated damages provision was void and/or unenforceable.
Both parties made applications in relation to the admissibility of the other party's witness statements.
The statement from Fox's witness had a list of documents referred to in the statement attached, but the list did not include all of the documents to which the witness had been referred. Mansion's solicitors asked Fox's legal representatives to confirm the approach used and Fox's solicitor replied that "I have to confess I wasn't aware Practice Direction 57AC applied and have prepared the statements the 'old fashioned way' by exhibiting documents referred to in the statements". Fox's solicitors later stated that this was only a reference to the PD 57AC requirement to list documents, instead of the whole of PD 57AC.
Mansion's solicitors raised their concerns in relation to Fox's witness statements and their PD 57AC compliance; in return, Fox's solicitors raised concerns with Mansion's witness statements. Mansion applied to remove non-PD 57AC-compliant sections of Fox's evidence and to amend the certificate of compliance so that it specified that the requirements of PD 57AC had not been discussed with or explained to the witnesses until after the statements were drafted, and that the statements had not been prepared in accordance with the statement of best practice in PD 57AC. Fox later sought to amend or redact all of Mansion's evidence that was not compliant with PD 57AC and/or Civil Procedure Rule 32. Fox's counsel identified corrections and additions to ensure compliance.
It later transpired that one of Fox's witnesses (Mr Higginbottom), a non-solicitor, had taken Kite's evidence for the initial drafts of Kite's statements. Fox maintained that following Aquarius Financial Enterprises Inc v Lloyd's Underwriters (The Delphine),(2) the witness statements could be prepared by someone other than the party's solicitor if the third party exercised the same standards that would apply if the statements were taken by the solicitor. Further, Fox's solicitors had explained the approach to preparing trial statements to Higginbottom – specifically, the need for the statements to be in the witness's own words and confined to the facts, avoiding argument, submission or any detailed commentary on the documents.
The judge found that Fox's solicitor had been aware of PD 57AC (having referred to it in earlier, unrelated adjudication proceedings). The judge reiterated the importance of avoiding satellite litigation that is disproportionate to the size and complexity of the dispute, and flagged that the sensible course of action where one party is concerned that another has not complied with a PD is to raise the concern with the other side and attempt to reach an agreement. The court's assistance should be requested at a time and manner that does not disrupt trial preparation or cause unnecessary costs. In this case, the judge did not criticise the parties for bringing the matter before the court as it highlighted the new PD and enabled the court to set out guidance.
The judge clarified that while paragraph 3.2 of PD 57AC states that a witness statement must 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", this does not require each document looked at during the proceedings by the witness to be listed. The purpose of the rule is to provide transparency regarding the documents used to refresh the memory of the witness, so that the court and the other side can understand the extent to which the witness might have been influenced by the contemporaneous documents, including those not seen at the time. Even prior to PD 57AC, a proper approach to preparing a trial witness statement would comply with the statement of best practice as set out in PD 57AC.
The judge found that Mansion was justified in its concerns with regard to Higginbottom's impartiality and independence in preparing Kite's draft statements, especially where the evidence related to a vital telephone exchange. While the judge found that it may be difficult for Higginbottom to record the evidence "without viewing it through the lens of his formed opinion", it was evident from the statement of Fox's solicitor and an email from their counsel that steps had been taken to ensure that Kite's account was revised before service to set out the words Kite had used, rather than any paraphrasing. The judge also found that Kite and Higginbottom being tendered for cross-examination at trial was an additional safeguard against tainted evidence.
The court opined that Fox's witness statements had been prepared with the PD in mind and that the best practice principles had been adopted. It rejected Mansion's application for Fox's representatives to redraft the certificate of compliance.
The judge confirmed that in keeping with PD 57AC, commentary on documents or opinion should be avoided. Accordingly, both parties had to redact evidence where this principle had been breached.
This decision provides clarity that witness statements only need to list documents used to refresh the witness's memory. This resolves the debate of whether client witnesses, who may have seen documents throughout the course of litigation, may need to refer to documents seen earlier in the process.
The judgment also reminds practitioners that the statement of best practice should be used as a checklist for witness evidence. Further, as long as practitioners bear in mind the principles of PD 57AC when preparing witness evidence, even if the rules are not completely complied with, an attack on the witness statement by the other side may not be successful. This may discourage parties from engaging in satellite disputes, save in the most egregious cases of non-compliance.
For further information on this topic please contact Daniel Hemming, Sophie Parkinson or Olivia Dhein at RPC by telephone (+44 20 3060 6000) or email ([email protected], [email protected] or [email protected]). The RPC website can be accessed at www.rpc.co.uk.
Endnotes