INTRANSIGENT EXPERT’S APPROACH LEADS TO “SIGNIFICANT PART OF CLAIMANT’S CASE BEING STRUCK OUT”: A CASE FOR EVERY EXPERT AND LITIGATOR TO READ – NOW

The judgment of Mr Justice Males in Mayr & Ors v CMS Cameron McKenna Nabarro Olswang LLP [2018] EWHC 3669 (Comm) is one of the most robust I have seen in relation to expert evidence. An expert’s failure to properly engage in the process of the meeting of experts  has led to large parts of the claimant’s being struck out*. There was no peremptory order. (*That was the claimant’s own submission in relation to the effect of the ruling).  This was a case involving several hundred million Euros and , despite the claimant’s protestations that there had been no warning of the possibility of the evidence being excluded, the judge declined a later invitation to change his ruling. This is a case that should be put on the desks of every expert, and every litigator, this morning.

… a party is not entitled to disregard the rules, secure in the knowledge that until an unless order is made it will always get a second chance”

THE CASE

The judge was considering matters (on the 14th December 2018) in relation to a trial that was due to take place on the 22nd January 2019.  One of the issues was that the claimant’s expert had failed to properly engage with the joint meeting process.  This failure had dire consequences for the claimant.   The claimant was refused permission to rely on that expert evidence.

THE JUDGMENT

    1. The experts’ evidence in this case is in a most unsatisfactory state. The pre-trial review is taking place today, 14th December, for a trial commencing on 22nd January. There are, for the purpose of this ruling, two areas of expert evidence, both of which bear on the quantum of the claimants’ claim which is very substantial, several hundred million Euros. The first area of expert evidence concerns what can be referred to as the LMM issue. For present purposes that is merely a part of the history because it has been resolved in a way with which the parties are prepared to live, although I have to say on behalf of the court that I find it unsatisfactory. The second area of expert evidence deals with what can be referred to as the Turkish issue.
    2. What happened is that in relation to both aspects of the expert evidence, the LMM issue and the Turkish issue, conventional directions were given. These provided, in accordance with the usual practice of this court, for a sequence of steps. First there was to be an exchange of the experts’ initial reports. This would be followed by a joint meeting of the experts in each discipline. Nobody involved in litigation in this court, whether as client, lawyer or expert, can be in any doubt that the court expects and requires the experts at the joint meeting to take a constructive approach, discussing the contents of their report and the issues on which they are required to express their opinions, reaching agreement where they can and setting out concisely where they cannot reach agreement and why they cannot.
    3. That is then recorded in a joint memorandum. It is the experts’ responsibility to agree the content of the joint memorandum. This is part of their duty to the court as independent experts and is the basis on which the court gives permission for expert evidence. While the lawyers may properly assist the experts by ensuring that they focus on the issues which the court will need to determine, neither clients nor lawyers have any role in dictating to the experts what they can or cannot agree.
    4. It is only once that joint memorandum is produced that there is scope for supplemental reports which are usually described, and were described in the order made on this occasion, as short supplemental reports. The object of those reports is not simply to repeat what has been said the first time around but to engage with the points, hopefully although not always, the narrowed points on which the experts remain in disagreement after their joint meeting. Sometimes the order will spell this out but, even when it does not, this is implicit.
    5. What happened in relation to the LMM issue is that reports were prepared by Professor William Kilgallon on behalf of the claimants and Mr. Jean-Michel Peny, on behalf of the defendants. The joint memorandum which they prepared records this at paragraph 4 under the optimistic heading “Areas of agreement”:
“The meeting of experts did not lead to any further agreement on any of the points addressed in the experts’ reports. Each expert continues to fully rely on his own report as a true and accurate statement of his own expert opinions on the issues addressed. However, the situation may change after Professor Kilgallon completes his supplemental report on 21 September 2018, in which case this memorandum can be updated accordingly.”
    1. The memorandum then continues in paragraph 7 with 18 numbered points in which on every issue which is raised for discussion Professor Kilgallon gives the following response:
“Has not finalised his thinking on this point. He is due to serve a supplemental report by 21 September 2018, by when he anticipates he will have formed a view as to whether he agrees or disagrees with Mr. Peny on this point. If he disagrees, he will at that point be in a position to set out his reasons and to prepare an updated version of this memorandum as per the email from Asserson to Simmons dated 12 September 2018.”
    1. Those were the parties’ solicitors. That response is then repeated under every issue raised for discussion.
    2. In the event a supplemental report was provided by Professor Kilgallon, although the joint memorandum never was updated as had been envisaged by paragraph 4 and there has been no further discussion between the experts on the LMM issue. There was instead a sequential exchange of the supplemental reports. As I say, this is not satisfactory. It means that the essential step in the proceeding of a constructive discussion between the experts has simply not happened.
    3. For present purposes that is the background to what has happened in relation to the Turkish expert evidence where again Professor Kilgallon was the expert on behalf of the claimant. This was an issue which was introduced later in the course of the proceedings and as a result the steps relating to expert evidence took place after the LMM evidence had been produced in the way which I have described. Service of the initial round of reports took place on 30th November 2018, a date which I understand was put back to some considerable extent to assist Professor Kilgallon. The experts meeting did not take place until 5th December 2018.
    4. When the experts meeting took place there occurred again what Mr. Roger Stewart QC for the defendant described, with some justification in my view, as the same “stunt” as had happened before. The joint memorandum produced, which is dated 11th December, records this at paragraph 1.5:
“The meeting of experts did not lead to any further agreement on any of the points addressed in the experts’ reports. Each expert continues to fully rely on his own report as a true and accurate statement of his own expert opinions on the issues addressed. However, the situation may change after Professor Kilgallon completes his supplemental report on 21 December 2018.”
    1. There is then a statement, item by item, of the opinion of the defendant’s expert on this issue, Mr. Nuri Kilic to which Professor Kilgallon on every occasion gave this response:
“Professor Kilgallon is considering his response. He is due to serve a supplemental report by 21st December 2018 by when he anticipates he will have formed a settled view as to whether he agrees or disagrees with Mr. Kilic on this point.”
  1. Although the joint memorandum states in these unequivocal terms that Professor Kilgallon anticipated that he would have formed a settled view by 21st December 2018, I am told by Mr. Jonathan Crow QC for the Mayr claimants that this was not intended as an indication that Professor Kilgallon would be in a position to complete his supplemental report by 21st December; it was merely a date which happened to be the date which had been ordered for exchange of supplemental reports. If that is so, I have to say that the statement was thoroughly misleading as well as unacceptably cavalier. In fact I am now told that Professor Kilgallon cannot, for whatever reason, produce his further report until 7th January. That is a very short time before the trial, albeit that the experts on this issue are not due to give evidence until some weeks later, towards the latter part of the trial.
  2. I do not regard the joint memorandum dated 11th December, only three days ago, or the meeting which it records, as coming close to compliance with the order that the parties’ experts should meet and produce a joint memorandum. That is intended to be produced in the way which I have described earlier. When an expert fails lamentably to comply with that order the whole procedure for further expert evidence in the case is thrown into disarray. The purpose of the supplemental reports is to enable the experts to comment on and express their further views upon the points on which they remain in disagreement, having had the benefit of a proper experts’ discussion at which they can properly understand the point of view of the opposing expert.
  3. That has simply not happened in this case. It is impossible for the defendant’s expert to say anything further in a supplemental report until he knows what Professor Kilgallon has to say about the matters on which he has expressed his opinion.
  4. All that the claimants can say in response to this is that the least bad option now is to have sequential exchanges of reports, such as happened in the case of the LMM issue with Professor Kilgallon serving his report on 7th January. Mr. Stewart points out that that is far too late given the preparations for trial which will by then be entering their closing stages with opening written submissions due on 16th January.
  5. It seems to me that the position is that the claimants have failed to comply with the terms on which they were given permission to adduce evidence of the Turkish pharmaceutical industry in this case. The burden is on them to provide a workable solution which they have not done. It is for them too to apply for relief from sanctions. Again, they have not done so. They would need, if they were to do so, to give a proper explanation of why it is that Professor Kilgallon has taken this approach on not one but two occasions. He must have been told, he certainly should have been told after the LMM expert memorandum was produced, that this was not an acceptable way to proceed.
  6. The order which I make therefore is that as matters stand the claimants do not have permission to adduce evidence of the Turkish pharmaceutical industry at the trial. The burden will be on them to come forward, as I have said, with a proper and acceptable procedure which will include a proper joint meeting and will meet the criteria of relief from sanctions if they wish to pursue this evidence. If they have simply left it too late to do so in an acceptable way then that is something for which they must take the consequences.

LATER IN THE JUDGMENT

The judge was later asked to change his mind. The claimant argued that the effect of the ruling was that significant parts of the claim were effectively struck out in circumstances where no peremptory order had been made.  There was no change of mind.

  1. I am invited by Mr. Crow to reconsider the ruling about the Turkish expert evidence which I have just given. He extends that invitation on three grounds, in circumstances where it appears that he was taken by surprise by the ruling which I have made, which was not something for which the defendant had contended. In fact I made it clear in the course of argument before I gave my ruling that the question of permission to rely on the Turkish expert evidence was on the court’s agenda, even if it had not been on the parties’. Nevertheless, I will reconsider the three points which Mr. Crow has mentioned.
  2. The first is that the outcome was not one which was sought by the defendant who had not issued an application notice to the effect that the claimants should not have permission any longer to rely on that evidence. However, it is undoubtedly the case that the defendants were complaining loudly about the procedure which Professor Kilgallon had adopted and the court has its own interest in the orderly preparation of expert evidence. When the failure is as blatant as it was in this case, that is a matter with which the claimants need to be in a position to deal.
  3. The second point is that the default is not that of the claimants but of their expert who is not the claimants’ property or their client. While that may be true, there is in fact no evidence to explain whether what happened was the Professor’s own idea or was a course which he was encouraged to adopt by the claimants or their legal representatives. Even assuming the former, however, which is from the claimants’ perspective the most favourable interpretation, this was as I have indicated the second occasion on which this has happened. The claimants or those advising them were therefore aware of what Professor Kilgallon had done the first time around and should have made it clear to him that this was unacceptable. If they failed to do so this was itself a serious failing.
  4. As to the third point, that the effect of my ruling is to strike out a significant part of the claim without there having been an unless order, a party is not entitled to disregard the rules, secure in the knowledge that until an unless order is made it will always get a second chance. Be that as it may, however, the ruling which I made was not a final striking out of the claim. It put the ball firmly in the claimants’ court to come back to court with proposals which will put the situation right and will do so without causing serious prejudice to the trial. Although not expressed as an unless order, that is broadly similar in its effect.
  5. I have considered the various matters raised by Mr. Crow but my ruling is not changed.