Defendant’s application for an order that parts of the claimant’s expert report and the experts’ joint-report were inadmissible.

Factual background

The defendant challenged the claim under section 103 of the Arbitration Act 1996 for recognition and enforcement of an arbitral award of damages for an alleged breach of a Franchise Development Agreement (the ‘FDA’). The FDA was governed by English law, but provided for arbitration to be conducted in Paris.

The tribunal had concluded that the defendant became an additional party to the FDA by novation and became a party to the arbitration agreement under French law. The defendant argued that the law governing whether it became a party to the arbitration agreement was the law governing the transfer of the FDA, and, even if that was not the case, it claimed that the validity of the arbitration agreement was governed by English law. Both parties instructed experts to prepare reports and, later, a joint expert report was produced.

The defendant brought French annulment proceedings pursuant to Article 1520 of the French Civil Code and the claimant applied for the English section 103 proceedings to be adjourned, pending the outcome of the French proceedings. A hearing was fixed for March 2019 to deal with the claimant’s adjournment application and to try preliminary issues in respect of the s.103 challenge.

Article 5(1) (a) of the New York Convention, as enacted in s.103 (2) of the Arbitration Act, provides that recognition and enforcement of an award may be refused if the party is under an incapacity or the arbitration agreement is not valid under the law to which the parties are subject or the law of the country where the award was made. The defendant submitted that sections of the claimant’s expert’s report and the joint experts’ report were inadmissible or prejudicial, and Rogers -v- Hoyle [2014] EWCA Civ 257 should be distinguished .

Legal issues

The principle to be derived from Rogers -v- Hoyle was that there is nothing to be gained, except in very clear cases, from excluding or excising sections in an expert’s report which opine on inadmissible matters. Mrs Justice Moulder commented that this exercise was ‘unnecessary and disproportionate’.

The judge found that the whole document should be before the court, and it was for the judge at trial to take account of the report only to the extent that it reflected expertise and to disregard it in so far as it does not.

The court held that the principle in Rogers -v- Hoyle should not be limited to expert reports which fall outside CPR 35. Although the dicta of Christopher Clarke LJ appeared to leave open the possibility of excising inadmissible evidence in a clear case, the court had to weigh whether this is in fact the correct approach, even to those sections of the report which the defendant says are clearly inadmissible.

The judge concurred with the conclusion of Carr J in Moylett -v- Geldof [2018] EWHC 893 (Ch) that the ‘ultimate message’ from Rogers -v- Hoyle was that it is preferable for the court, rather than picking through expert reports - seeking to excise individual sentences and engaging in an editing exercise - to allow the trial judge to consider the report in its entirety.

In her judgment, Mrs Justice Moulder found that the defendant had not established any real prejudice resulting from the reports being presented in their entirety to the judge at the March hearing. Additionally, it was held that requiring a report to be reissued with specified paragraphs removed was contrary to the approach in Rogers -v- Hoyle. The judge commented that no modern or sensible case management should put the parties to the expense of excision; a judge would just ignore anything inadmissible.

In the joint expert’s report, the defendant’s expert responded to opinions expressed in the claimant’s expert’s report. The defendant sought to remove those responses from the joint report. The defendant argued that this was a consequence of its application to remove the original opinions expressed in the claimant’s expert's report. It was held that the appropriate course was to allow the joint report to stand in its entirety and to allow the court at the March hearing to consider it along with all the other experts’ reports. Mrs Justice Moulder observed that it was difficult to see how this would cause any real prejudice and why the experts should be put to the time and expense of reissuing the joint report.

Insofar as there were matters in one of the reports which had a bearing on the determination of the adjournment application, the judge in the March hearing would be addressed on the merits of that application in its entirety. The Moulder J noted that it was unnecessary and undesirable to pre-empt that decision in any way by considering the relevance of the expert’s evidence.

Finally, as to the defendant’s submission that one of the expert’s report was prejudicial, the court concluded that, even if the relevant passages were not excised from the report, the defendant was not precluded from advancing its submissions at the March hearing. If the defendant was successful in persuading the judge at that hearing that the expert’s opinions are inadmissible, the judge would disregard the opinions in reaching a decision. The defendant’s application was dismissed.

Comment

This Commercial Court decision clarifies the principles applied in Rogers -v- Hoyle and highlights the approach courts will follow in determining whether experts’ reports should be excised for inadmissibility.

The court concluded that reports should be brought before the court in their entirety, and that it would be for the judge at trial to take account of the report only to the extent that it reflects expertise.

This article originally appeared in the March 2019 edition of shipping case digest. Other articles include:

Silverburn Shipping (IOM) Ltd -v- Ark Shipping Co LLC (THE M/V “ARCTIC”) [2019] EWHC 376 (Comm)

Globalink Transportation and Logistics Worldwide LLP -v- DHL Project & Chartering Limited [2019] EWHC 225 (Comm)