Disputes in the energy sector – can employees give expert evidence?
But the availability of experts with the right credentials can prove limited. For atypical issues, there may only be a handful of sufficiently qualified expert witnesses worldwide. Once filtered for conflicts, availability, language proficiency, and the 3am test, clients may find themselves with very little choice of who to appoint.
In such circumstances, could a client’s own in-house expertise provide a viable option? If a client employs people with sufficient expertise to design, build and commission all or part of an innovative, technologically advanced energy project, then perhaps it employs people able to assist a court or tribunal in the resolution of a dispute arising from such a project.
The use by a party of an employee as an expert witness, at first blush, appears impermissible: an expert’s primary duty is to assist the court or tribunal with independent evidence, and he would seem unable (or at the very least heavily conflicted) in maintaining that primacy and his independence where he is giving evidence on behalf of the party that ostensibly pays his mortgage.
But the option of employee-expert evidence should not be dismissed out of hand: the court’s attitude towards admitting employee-experts in recent years shows a preparedness to consider it relevant and helpful. An arbitral tribunal is likely to take a similar view, particularly when English law is the lex loci arbitri (law of the place where arbitration is to take place).
Admissibility of employee-expert evidence
In Whitehouse v Jordan, the House of Lords appeared to suggest the apparent bias test was relevant to the admissibility of expert evidence, saying that expert evidence should be “seen to be the independent product of the expert, uninfluenced as to form or content by the exigencies of litigation”. A similar view was taken in The Ikarian Reefer (No.1), in which the High Court (Cresswell J) gave general guidance as to the duties and responsibilities of expert witnesses, repeating the same phrase quoted above.
These cases would suggest that relying upon employee-expert evidence is unwise, since it will leave the reliant party at the mercy of a court who is prepared to rule the evidence inadmissible for want of independence by virtue merely of their employee status.
However, in Field v Leeds City Council, the Court of Appeal (Lord Woolf MR) moved away from the apparent bias consideration in approving the submission of counsel that: “…if an expert is properly qualified to give evidence, then the fact that he is employed by [the defendant] would not disqualify him from giving evidence”.
May LJ confirmed that: “…there is no overriding objection to a properly qualified person giving opinion evidence because he is employed by one of the parties”. The key was said to be that the expert had “full knowledge of the requirements for an expert to give evidence before the court, and that he is fully familiar with the need for objectivity.”
Despite this approach being taken in Field, the court in Liverpool Roman Catholic Archdiocesan Trust v David Goldberg QC reverted back to the apparent bias considerations referred to in Whitehouse and The Ikarian Reefer.
Although initially (holding an application over to trial) Neuberger J at the pre-trial review commented that a close personal and professional relationship with a party did “…not mean as a matter of law, or even as a matter-of-fact, that [the expert] is incapable of fulfilling the functions” of an expert, at trial the High Court (Evans-Lombe J) disagreed, stating that any relationship between expert and party which might cause a reasonable observer to believe the evidence was unduly favourable to that party, “…his evidence should not be admitted however unbiased the conclusions of the expert might probably be”.
However, the wobble in Liverpool v Goldberg was corrected by the Court of Appeal (albeit obiter) in R (Factortame Ltd and others) v Secretary of State for Transport, Local Government and the Regions (No. 2).
Lord Philips MR concluded that Evans-Lombe J had (in Liverpool v Goldberg) applied the incorrect test to decide whether or not an expert witness should be permitted to give evidence. His Lordship found that applying an apparent bias test was wrong, and that the lack of an interest in the outcome of proceedings is not a precondition to the admissibility of evidence from the interested party.
Armchair Passenger Transport Ltd v Helical Bar Plc confirmed Factortame and Field as the law. With reference to Factortame, Liverpool v Goldberg, Field, The Ikarian Reefer and Whitehouse, the High Court (Nelson J) summarised the following principles as applicable to experts:
- It is desirable for there to be no actual or apparent interest in the outcome of proceedings.
- If there is an interest, including as an employee-expert, that does not automatically render the evidence inadmissible.
- The test of apparent bias is not relevant to the question of admissibility.
- The test is (1) does the person have relevant expertise? If so, (2) is the person aware of, and willing/able to comply with, their primary duty to the court despite their connection to a party?
Gallaher International Ltd v Tlais Enterprises Ltd is a more recent confirmation that the law as summarized in Armchair represents the current law. Aikens J in the High Court held that an expert’s evidence was admissible, giving these four reasons:
- The expert’s employee-status had been openly declared.
- The terms of his engagement were set out in a letter, that had been disclosed, which made clear his primary duty to the court, and showed that the employer had done what it could to isolate him from the business while he was acting as expert.
- The expert’s report made clear that he understood his primary duty to the court, and was willing and able to comply with it.
- Independent experts in the field were scarce, such that it would be onerous and unfair to force the employer to find a new expert at a relatively late stage.
Weight of employee-expert evidence
While employee-expert evidence is clearly admissible in principle, there remains the question of whether it is credible. That will depend on the circumstances (in particular, the nature of the employer/employee relationship and the size of the pool of suitable third-party experts), but while the courts are clear that they are unlikely to exclude employee-expert evidence, they are also clear that the weight to be attributed to such evidence is by no means invulnerable.
Aikens J in Gallaher recognised that an employee-expert’s independence is fair game in cross examination and submissions, and that “The weight of his evidence may well be affected by the fact that he is employed by [ a party ]. That will be a matter for the trial judge to decide”.
Similarly, May LJ in Field, accepting the party’s employee’s expert evidence as admissible, remarked “The fact of his employment may affect its weight but that is another matter”.
Nelson J in Armchair gave a candid warning: “If the expert has an interest which is not sufficient to preclude him from giving evidence the interest may nevertheless affect the weight of his evidence…[and] If it transpires in this particular case that the weight to be attached to [the expert’s] evidence is found to be limited by reason of his connection with [ a party ] this will no doubt sound heavily in costs against [that party]”.
One can expand upon that warning: Following Jones v Kaney, an expert no longer enjoys immunity for his conduct in giving evidence. But if he is an employee of a party, such that his employer is vicariously liable for that conduct, then there may be nowhere to turn if his evidence is the reason for an adverse costs award made against the employer-party.
Conclusions
Employee-expert evidence is not inadmissible: apparent bias concerns are unlikely to be successful in defeating its use. The focus will be whether the expert is aware of, and willing/able to comply with, his primary duty to the court. The steps taken in Gallaher might be thought sensible ways to persuade a court or tribunal that the employee-expert’s evidence is credible notwithstanding his employment.
When an energy sector dispute presents complex atypical issues but there is a small and/or unattractive pool of independent expertise available, employee-expert evidence may prove a sensible alternative to settling for the best of a what might be a bad bunch.
That said, the courts are evidently (and perhaps understandably) wary of the weight to be attached to employee-expert evidence. This, coupled with the potential for adverse costs awards where an employee-expert conducts herself unsatisfactorily, would make it sensible to make use of employee-expert evidence only if the occasion demands.