13 September 2018
BrisConnections Finance Pty Limited (Receivers and Managers Appointed) v Arup Pty Limited [2017] FCA 1268

Background

This judgment relates to proceedings in which the central allegation was that Arup were negligent in the preparation of traffic forecasts relied upon by BrisConnections. 

This review considers only the obiter dictum comments on whether the practice of legal practitioners providing instruction letters to experts dated on or about the date of the expert’s report is appropriate, with suggestions that this could render an expert’s report inadmissible.

Obiter dictum comments

Justice Lee provided obiter dictum comments in relation to the timing of the letter of instruction to BrisConnections' expert (Mr Veitch). Justice Lee’s comments are best summarised using his own words:

“A practice seems to have developed whereby a letter of instruction is provided contemporaneously (or near contemporaneously) with the finalisation of the expert report. Whether such a course actually complies with the requirements of FCR 23.13(1)(d) is open to question (although it is unnecessary to decide, given the absence of any objection on this basis).” [emphasis added]

He noted that in this instance the “Instruction Letter cannot be taken seriously”, as it was provided after a year of the expert working “hand in glove” with solicitors and dated at a time when the expert’s report was complete except for signatures, yet purported to:

  •  introduce the solicitors;
  •  request the expert review the pleadings by way of background;
  •  enclose a disc and hard drives;
  •  provide a copy of Practice Note CM7 (which apparently other evidence suggests it did not);
  •  identify the questions the experts were to consider; and
  •  request that they prepare a report.

Justice Lee was critical of the approach, stating that:

“The point of a letter of instruction being annexed to a report is not to act out a stylised ritual, but to provide the court with a transparent indication of what has been provided to the expert and the questions that the expert was actually asked to address. It should be able to be read literally without being silly. As is (at the very least) implicit in [the Federal Court rules relating to expert evidence], the work of the expert is to attend to the questions ‘the expert was asked to address’, not to invert the process by using the expert’s specialised knowledge in order to identify the questions that should have been asked and the assumptions that should have been given.”

“The integrity of the expert evidence process and the independence of experts is best facilitated by transparency in what is being asked of experts prior to, or at the time, they are forming their opinions and, if the questions need to change because they are misdirected, a record being made by way of supplementary instructions as to what has changed.” [original emphasis]

He noted that the ‘true instruction’ of the expert was oral, and only emerged during oral evidence at trial.

Attaching a letter of instruction is not mandatory under the Federal Court Rules 2011, which states an expert must “identify the questions that the expert was asked to address” 1. However, the current Federal Court of Australia’s Expert Evidence Practice Note (GPN-EXPT) (which applies to any Federal Court proceeding) states  that an expert shall be compliant with the rules if it:

  • complies with the Harmonised Expert Witness Code of Conduct; and
  • additionally, attaches or exhibits “documents that record any instructions given to the expert.”

Justice Lee noted that rule 23.11 of the Federal Court Rules 2011 provides that “a party may only call an expert at trial if the party has complied with Division 23.2 of the FCR.” This suggests that, to the extent a judge finds the practice of providing instruction letters dated contemporaneously with the finalisation of an expert’s report does not comply with the Federal Court Rules 2011, the report may be inadmissible.

An expert’s perspective

In relation to the timing of a letter of instruction, Justice Lee’s comments are not binding since he identified that it was unnecessary for him to consider the issue. However, there are some important potential implications that arise from his comments.

The role of oral instructions

There is no requirement that requires instructions to be provided in writing, other than perhaps the Federal Court of Australia’s Expert Evidence Practice Note (GPN EXPT) 5.2(c)(i), which indicates a report must “attach or exhibit instructions.”

Even where a formal instruction letter is provided early in an engagement, experts may be provided additional instructions during an engagement. For example, when estimating the value of a company, an expert may be instructed during the course of the expert engagement to assume an average life of a company’s assets to be 20 years for the purposes of calculating depreciation.

The need for these instructions is often unknowable at the time an expert is engaged, since it is the expert themselves who identifies that there are facts that must be proved by their engaging solicitors in support of their opinion.

For expediency, and to avoid contradictions and confusions in instructions, it is not uncommon for these instructions to be formalised into an ‘instruction letter’ issued contemporaneously to the finalisation of a report.

The evolutionary nature of case management

It is common for an expert to be approached on a matter when there are still uncertainties in relation to some aspects of the proceeding or the allegations being made by one or both ‘sides’. This may be in the form of pleadings being amended, documents being discovered, and lay witness reports or statements being still in progress.

With modern case management timelines, it is more common than ever to be engaged to perform work while these areas are being finalised. An expert may be engaged when the appropriate questions are therefore not known, and where the information to be provided is still incomplete.

The role of experts

When commenting on the timing of the letter of instruction, Justice Lee stated that “the work of the expert is … not to invert the process by using the expert’s specialised knowledge in order to identify the questions that should have been asked and the assumptions that should have been given.”

With respect, an important role for experts is to assist lawyers and their clients understand the issues on which the expert can legitimately provide an opinion (those being the matters that are within their expertise) and the limits of those opinions in relation to the issues which need to be established by the relevant party. Indeed, that lawyers and clients do not have a complete understanding of the appropriate questions to be put to an expert must be the rule rather than the exception, given that the role of the expert will typically relate to matters in which the lawyer or client is not an expert.

Clause 3.2 of the Federal Court of Australia’s Expert Evidence Practice Note (GPN EXPT), while including a valuable warning about ‘inappropriate communications’, also emphasises that lawyers should not feel compelled to engage a second ‘consulting’ expert to address such matters:

“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. However, it is important to note that there is no principle of law or practice and there is nothing in this practice note that obliges a party to embark on the costly task of engaging a ‘consulting expert’ in order to avoid ‘contamination’ of the expert who will give evidence. Indeed the Court would generally discourage such costly duplication.” [emphasis added]

Of course, the roles that an individual with expertise relevant to a matter in dispute might play extend beyond the preparation and delivery of evidence before the court. The court has long recognised the (at times) valuable role of an expert who provides ‘expert assistance’ to lawyers and clients in the preparation of their cases. This was made plain by Justice Allsop in the seminal case of Evans Deakin Pty Ltd v Sebel Furniture Ltd [2003] FCA 171 (which was for many years included as a footnote in the Federal Court of Australia’s Expert Evidence Practice Note (GPN EXPT)). As Justice Allsop said then, there was no reason why the same person could not undertake both that role and provide admissible expert evidence in the same matter3 :

“There may well have been great value in those preparing Sebel’s case obtaining the views of [Mr R]. Such views would no doubt have assisted them in analysing and preparing the case and in marshalling and formulating arguments. That is the legitimate, accepted and well known role of expert assistance for a party preparing and running a case. Expert evidence in which a relevant opinion is given to the Court drawing on a witness’ relevant expertise is quite another thing. There is no ethical reason why it cannot be given by the person providing assistance, as long as that person and the legal advisers understand and recognise the difference between the two tasks, and keep them separate.”

Timing of instruction letters

Having said that, with a modicum of care and attention to the formulation of a ‘confirmatory’ instruction letter, the peculiar (if not bizarre) aspects of the instruction letter to which Justice Lee referred can be avoided. Plainly, such a letter should not suggest, in any way, that it forms the first communication with the expert, nor that the expert is receiving, for the first time, a copy of the requisite code of conduct (not least because, if that was indeed what was happening, it is likely that the resulting report would not have been prepared in compliance with the practice note). It should also not suggest that, for the first time, a vast array of information that plainly could not have been absorbed by an expert in the course of one 24 hour period is being provided to the expert. However, if the expert is retained at the start of an engagement using an instruction letter which reflects the (likely) uncertainty as to the scope of the engagement (and to which is attached the requisite code of conduct) and is then provided with a final instruction letter which records in one place the substance of all preceding oral instructions, the desired level of transparency to which Justice Lee refers may well be achieved.

Significance

Given the increasing trend towards attaching letters of instruction that are contemporaneous with the completion of an expert’s report, it is likely that there will be future case law on this topic. In the interim, legal practitioners should consider the implications of Justice Lee’s comments that this practice may represent non-compliance with the Federal Court Rules 2011 and result in the exclusion of an expert’s evidence.
There are also the general potential negative inferences a judge may form due to perceived transparency issues of the nature to which Justice Lee refers.

Possible alternatives to dating instruction letters contemporaneous to the finalisation of an expert report include:

  • engaging a consulting expert to help draft questions to be put to an independent expert;
  • requesting an expert detail their instructions in the report rather than attaching an instruction letter. In the Federal Court, this should be considered in the context of GPN-EXPT;
  • issuing a generic instruction letter when appointing an expert, noting that specific instructions are to be provided orally; and
  • issuing a series of instruction letters, moving from a general brief to specific questions over time.
 
Endnotes
  1 Federal Court Rules 2011, rule 23.13(1)(d).
  2 Federal Court of Australia’s Expert Evidence Practice Note (GPN EXPT), 5.2.
  3 The expert to whom Justice Allsop was referring in this matter was Andrew Ross, a Partner in KordaMentha Forensic’s team.


 
This case review is an early extract from the upcoming ‘Expert Evidence: Recent Cases Edition 2’ to be released in October.
To register to receive a copy please click the register button below.


About KordaMentha Forensic

At KordaMentha Forensic, we uncover, analyse and clarify facts at the centre of disputes, investigations and other sensitive matters. We have one of the largest teams of forensic investigators, forensic accountants and forensic technology specialists in Asia-Pacific. Our experts are regularly called on to provide evidence in high-profile disputes and investigations. 

Subscribe