A reminder of expert witness best practice 3 min read
In New Aim Pty Ltd v Leung, the Federal Court of Australia rejected an expert report and oral evidence from a purportedly independent expert witness on the basis that the solicitors who retained the expert had written her report. The decision had adverse consequences for the applicant.
The case is a timely reminder of best (and worst) practices in the engagement of independent expert witnesses and the importance of preserving an expert's independence.
- Interactions with expert witnesses should be treated with great care to avoid any (real or perceived) risk that their opinions have been influenced by lawyers or parties to the proceedings.
- Lawyers should not write expert reports.
- Lawyers may assist experts to express opinions effectively and in accordance with evidentiary requirements, but an expert's evidence must be the expert's own opinions. It is likely that more sophisticated experts will need less assistance than inexperienced experts.
- Expert reports should disclose the involvement of lawyers in preparing the report.
- If a court determines that an expert report has been prepared without the necessary level of independence, the court may reject the report (as was the case here).
- Clear letters of instruction should be issued to experts at an early stage. The instructions should stipulate that the expert is engaged to provide objective and independent advice in accordance with relevant expert witness code of conduct requirements.
- An expert witness owes a paramount ethical duty to the court, to assist impartially on matters within their expertise.
New Aim Pty Ltd (New Aim) is an Australian e-commerce business that sources its products from various suppliers in China.
New Aim commenced proceedings against three of its former employees and two online retail businesses. It claimed that the former employees breached ethical, contractual and statutory confidentiality obligations by allegedly sharing identity information and contact details of some of New Aim's Chinese suppliers with competing retail businesses.
Relevantly, for New Aim to establish its claims for an equitable breach of confidence and misuse of information under section 183 of the Corporations Act 2001 (Cth), it needed to prove that (among other things) the information relating to New Aim's Chinese suppliers was of particular value to its competitors considering the way such information is generally used in the e-commerce industry. In support of its case, New Aim served an expert report by Ms Chen, who was retained as an independent expert on Chinese procurement.
The expert report
Ms Chen produced a detailed report a day after receiving a letter of instructions from New Aim's solicitors. During cross-examination, Ms Chen conceded that New Aim's lawyers had drafted large sections of the report and emailed her suggested changes which she incorporated.
On production of further documents during the hearing, it became apparent New Aim's solicitors had significant involvement in preparing Ms Chen's report, including by providing Ms Chen with a draft expert report and annexures, which were signed and returned to those solicitors in a substantially similar form.
Justice McElwaine observed that sections of Ms Chen's report bore a 'striking similarity' to another of New Aim's lay witness statements, and his Honour inferred that the sections were 'drafted by the same person', being New Aim's solicitors.
Rejection of evidence
Justice McElwaine rejected Ms Chen's report, stating that it could not be relied upon. His Honour also gave no weight to the oral evidence at cross-examination on the basis that his Honour 'could not have confidence that [Ms Chen's] oral evidence was untainted by the factual material and the opinions in her written report and the manner of its preparation'.
Accordingly, his Honour declined to make any finding in reliance of Ms Chen's evidence. Without Ms Chen's evidence, New Aim was unable to support its claims for breach of confidence and misuse of information.
Justice McElwaine also held that the lawyers and Ms Chen had failed to comply with:
- clause 3.2 of the Federal Court of Australia Expert Evidence Practice Note:
A party or legal representative should be cautious not to have inappropriate communications when retaining or instructing an independent expert, or assisting an independent expert in the preparation of his or her evidence.
- clause 2 of the Harmonised Expert Witness Code of Conduct:
An expert witness is not an advocate for a party and has a paramount duty, overriding any duty to the party to the proceedings or other person retaining the expert witness, to assist the Court impartially on matters relevant to the area of expertise of the witness.
His Honour noted that New Aim would more likely have achieved compliance with the practice and conduct requirements if the report disclosed the involvement of lawyers. By contrast, in this case, the court observed that Ms Chen's report misleadingly concealed the methodology adopted, including in that it contained a letter of instructions from the instructing solicitors to draft the report, which was found to have been issued after the report had already been substantially drafted.
We understand that this decision is now the subject of an appeal.