For some time now, the rising cost of arbitration has been a stalwart topic at conferences, seminars, and any other occasions when arbitration practitioners meet. But only infrequently do we discuss the value of one particular aspect of international arbitral practice which contributes significantly to its cost: the practice at hearings of questioning witnesses about their recollection of past events. In this article, we discuss a recent decision of the High Court in London which casts doubt on the reliability of memory and its recollection in the evidential process.
While international arbitral practice will vary from tribunal to tribunal and seat to seat, the dominant method of determining disputed factual matters is for individuals with contemporaneous knowledge of relevant matters to provide witness statements and attend a merits hearing at which they will be cross-examined on their evidence and asked questions by the tribunal. This is a process which necessarily involves considerable participation on the part of counsel such as ourselves, so it is with some reluctance that we call into question its value. But how often do cases turn on such witness evidence? Sometimes, certainly, but we suspect it is not the majority of cases, or even perhaps a substantial minority.
If that impression is correct, then it may suggest that tribunals already appreciate, consciously or otherwise, the problems concerning the reliability of memory which have been noted occasionally by arbitration commentators and, most recently, by Mr Justice Leggatt in Gestmin SGPS S.A. v (1) Credit Suisse (UK) Limited and (2) Credit Suisse Securities (Europe) Limited.1 Whilst his observations in this regard were made in the context of court proceedings, they are equally applicable to prevailing arbitral practice.
The case concerned a failed claim for damages in respect of allegedly negligent investment advice. At trial, a total of ten witnesses of fact and three expert witnesses gave evidence. Before commenting on their testimony, Leggatt J made some remarks on the reliability of oral testimony in general. His observations are particularly pertinent to “document heavy” cases, including complex commercial disputes of which Gestmin itself is an example.
We comment on each of these observations in turn.
“I do not believe that the legal system has sufficiently absorbed the lessons of a century of psychological research into the nature of memory and the unreliability of witness testimony”.
- Leggatt J echoed a concern recently expressed in Guidelines published by The British Psychological Society that “the law generally is unaware of the findings from the scientific study of human memory”.2
- His specific observations mirror some of the points raised in the Guidelines, and will doubtless resonate with many practitioners.
- In his Kaplan lecture in December 2010, Toby Landau QC discussed memory and witness testimony in arbitration, raising certain of the concerns outlined in the Guidelines and making many remarks which were supported by or similar to those of Leggatt J in Gestmin. Specifically, Mr Landau QC urged those in international arbitration to approach evidential procedures by reference to the conclusions of psychological research.
“Psychological research has demonstrated that memories are fluid and malleable … [rather than]… a mental record which is fixed at the time of experience of an event and then fades (more or less slowly) over time”.
- Leggatt J expressed his views regarding the nature of memory, confirming that the commonly held idea of memory as a “flashbulb” or recording device can be misleading.
- Further, he emphasised that the accuracy of a memory should not be judged by the apparent strength of recollection, or by the confidence with which it is recalled.
- This chimes with a point made by Jennifer Kirby in her March 2011 speech at the Vienna arbitration days,3 in which she cited Salvador Dali’s observation that: “the difference between false memories and true ones is the same as for jewels: it is always the false ones that look the most real, the most brilliant”.
- Both observations are borne out by psychological research.
“External information can intrude into a witness’s memory, as can his or her own thoughts and beliefs, and both can cause dramatic changes in recollection”.
- Witnesses’ personal experiences, beliefs and thoughts can shape their perceptions, meaning that two witnesses can have different views, and therefore different recollections, of “facts” concerning the same event.
- We tend to remember events subjectively; for example, a reader may recall that an article was long if he or she found its contents dull.
- An additional explanation for misleading evidence given by witnesses may be that their perception of events is flawed in the first place, for example, as a result of interruptions, distractions, levels of attentiveness, and fatigue.
- Perception may also be affected by the unconscious automatic shortcuts which our brains use in order to process the huge amounts of information we are confronted with each day.
“Considerable interference with memory is also introduced … by the procedure of preparing for trial”.
- A witness’s memory may be influenced by disclosure insofar as it is refreshed by reference to contemporaneous documents or has gaps in recollection filled following a review of documents to which the witness may not have paid much attention, or even seen, at the relevant time.
- Memory may also be affected by the act of drafting a witness statement. Leggatt J recognised that a statement will inevitably go through “several iterations”, will often be drafted by lawyers “conscious of the significance for the issues in the case of what the witness does or does not say” and will ultimately become the record of a witness’s memory whether in fact it is true or false.
- The extent to which lawyers should participate in the preparation of witness statements, as well as the manner in which they should do so, is, of course, a contentious issue. The practical reality, however, is that witness statements produced in the vast majority of international arbitrations will have been the product of considerable input from counsel.
- Collectively, the disclosure process and the review of contemporaneous documentation which the preparation of witness statements typically entails may often lead to a witness’s memory becoming based on that documentation (and the interpretation of that material by a witness’s lawyer), rather than the witness’s original experience of the event.
In conclusion, Leggatt J observed that “the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses’ recollections … and to base factual findings on inferences drawn from the documentary evidence and known or probable facts”.
In our experience, typically this advice is already followed by tribunals making findings of fact in international arbitrations. Where a conflict arises, only rarely do arbitrators find against documentary evidence and in favour of witness recollection. That begs the question of whether the time and cost presently expended on the preparation of witness statements and cross- examination of witnesses is money well spent.
Leggatt J did see some value in the exercise, particularly as a tool to “subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness”. But it might well be argued that there are less expensive ways of scrutinising relevant documents, and that the personality and working practices of a witness may only infrequently be material in commercial disputes.
So what practical tips can parties and counsel glean from the observations of Leggatt J and the arbitration practitioners cited above?
- Do not be afraid to limit the number of witnesses you call. Although witness evidence may often be limited in its value, not calling any witnesses (when otherwise available) risks sending the wrong message. But parties and counsel should think hard about whether the evidence of each proposed witness is central to the issues in the case. If in doubt, leave them out.
- Do not immediately “refresh” a witness’s memory with documents. As noted above, this practice can distort recollection, by supplanting existing memories with new (false) memories triggered unconsciously by reading contemporaneous documents. This can trip up witnesses in cross-examination, and make them appear unreliable through no fault of their own. Instead, interview witnesses first without the documents, allowing them time to think back to relevant events and give their recollection unaided, and untainted, by contemporaneous documents, which should only be shown to them subsequently.
- Draft statements using the witness’s language and anecdotes. Arbitrators who suggest that lawyers should play no part in the drafting of statements would, we suspect, quickly recant were they forced to work from the resulting statements, meandering and unfocused as they would undoubtedly be. But for reasons both ethical and self-serving, counsel should strive to keep the voice of the witness alive in the statement, adding anecdotes where they give colour to a recollection or help explain why it was memorable. These, in turn, are the statements arbitrators remember and, understandably, find credible.