As commercial contract lawyers we spend a lot of time discussing the interpretation of written contracts. What we spend less time doing is discussing the difficulties that arise if parties decide not to put their contracts in writing at all.

It is unusual if there are no relevant documents. Typically, even if there is no detailed contract, there are usually purchase orders, invoices and emails between the parties which can be spoken to by witnesses. Pinning your hopes on witness evidence, however, is problematic. Increasingly, the judiciary is expressly recognising the limitations of this sort of witness evidence, particularly when taking into account the passage of time. The most comprehensive explanation of these difficulties can be found in an English case - Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 in which Lord Leggatt (then Leggatt LJ) said:

"…the best approach for a judge to adopt in the trial of commercial cases is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose - though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of the particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth".

The warning given by Lord Leggatt is an important one and the full passage from his decision is worth reading. Quite often a witness who is not telling the truth is not actually lying. They are simply misrepresenting events innocently because the passage of time has led them to recollect events wrongly or perhaps because they have simply persuaded themselves of the truth of something over a number of years.

The Scottish courts have followed Lord Leggatt's lead on this matter and increasingly accept in express terms that oral evidence of events that took place some years previously can be unreliable through no fault of the witness. Lord Bannatyne does so in Agilisys v CGI 2018 CSOH 112 in which he questions how reliable a witness's evidence could be about an event several years ago "when they were very busy". Lord Uist also considers the question in McAnulty v McCulloch 2019 SLT 449 in which he relies on the approach of Lady Arden (or Arden LJ as she was then) in Re Mumtax Properties Ltd - the terms of contemporaneous documents are crucially important when considering the evidence, and the oral statements of witnesses about these documents is less so.

All of this, of course, is another reminder about the importance of putting things in writing and where there is nothing in writing solicitors need to give clients appropriate advice about the weight that will be attached to their own recollection of long since past events.