JUDGES AND WITNESSES 1: IT WAS A LONG TIME AGO
There have been a number of cases recently where the courts have considered, expressly, how they should approach witness evidence. The first, Axa -v- Arab Insurance Group  EWHC 1939 (Comm) related to witnesses who had to consider matters after a considerable amount in time.
Mr Justice Males was considering whether Axa could avoid two reinsurance treaties. These were entered into in 1996.
As will be apparent from this brief summary, most of the events with which this action is concerned took place almost twenty years ago or in some cases even more. While that may represent no more than the twinkling of an eye to those engaged in long tail reinsurance business, the inevitable consequences are that the available documents, voluminous as they are, are incomplete and that the witnesses cannot be expected to have any (let alone any precise or detailed) recollection of most of the matters about which they gave evidence. To their credit the witnesses did not pretend that they had any such recollection, but acknowledged that much of their evidence consisted of assertion as to what they said or did based upon their belief that it was what they would have done in the circumstances in view of their normal working practices. I have therefore approached such evidence with caution in making the findings set out below, recognising the danger that it is affected by hindsight knowledge of how matters have turned out and on occasion by an element of wishful thinking.
The need for caution applies with even greater force to hypothetical evidence as to what a witness would have done if circumstances had been different – in particular, on the issue of inducement, as to whether or not a risk would have been accepted if matters which were not in fact disclosed had been disclosed. Whether a reinsurance underwriter will be willing to write a risk or on what terms will depend on many considerations – not merely the bare facts relating to the risk itself, but such matters as the terms in which it is presented by the broker, the underwriter’s view of the reinsured company and its underwriter, the reinsurer’s book as a whole and the way in which the particular risk will fit into his overall strategy, his commercial relationships with the reinsured and the broker, and prevailing and anticipated market conditions. It will very often be difficult for a witness to think himself back into all of the circumstances as they existed at the time which would have had a bearing on his decision whether to write a particular risk in circumstances which are inevitably hypothetical since ex hypothesi there was no fair presentation of the risk. In a case such as the present which is litigated so long after the events in question that the witness has no recollection at all of the actual transaction, this difficulty is particularly acute.
Despite the usual limitations of witness recollection, exacerbated in this case by the length of time which has passed, I consider that all of the witnesses were doing their best to assist. As usual, however, where documents are available they represent much the best evidence not only of what the parties did, but also of what they were thinking at the time.”