WHEN THE CREDIBILITY OF THE LAY AND EXPERT WITNESSES LIES IN SHREDS

November 30, 2015 · by · in Civil evidence, Expert evidence, Experts, Uncategorized, Witness statements

The previous post in relation to Part 36 led me to examine the substantive judgment of Mr Justice Coulson in Van Oord UK Limited -v- Allseas UK Limited [2015] EWHC 3074 (TCC). It contains as damning an assessment of witness evidence as I have seen (and this blog has covered many damning assessments of both lay and expert witnesses.

I usually have one or two selected quotations at the beginning of a post. However, here, there are slightly more than normal.

“I regret to say that each of the four factual witnesses called by OSR endeavoured to avoid many of the questions put to them. Despite a number of interventions from the court to try and get them to do so, they stuck to what appears to have been a deliberate strategy of long, rambling answers designed to avoid the question and put their case in the best possible light, regardless of the truth. Although I found each rather engaging on a personal level, they were as unconvincing a group of factual witnesses in a commercial claim as I have ever encountered.”

On the claimants’expert

“By the end of his cross-examination, he [the claimants’ expert] was accepting every criticism or error being put to him by Mr Lofthouse QC; on occasions, he even conceded points before they had even been suggested.”

“the widespread and important elements of the claim, which he admitted he could no longer support, drove him to say in cross-examination that he was not happy with any of his reports, not even with the one provided during the last week of the trial, just before he gave his oral evidence. If an expert disowns his own reports in this way, the court cannot sensibly have any regard to them.”

“he made repeated assertions in his reports that appeared to be expressions of his own views. They were certainly not attributed to anybody else. But in cross-examination it was revealed that these assertions came straight from discussions he had had with OSR witnesses, Mr Mulcair and Mr O’Rourke. Even more alarmingly, some of these assertions, in particular those in Mr Lester’s report provided at the start of the last week of the trial, related to matters on which both men had already been cross-examined and (in many instances) on which they had had no credible answer to the points being put to them. In this way, Mr Lester was used to try and plug the gaps in OSR’s evidence which had been exposed by Mr Lofthouse QC’s cross-examination of OSR’s witnesses of fact, without any input from Mr Lester himself. That is the complete opposite of what a responsible, independent expert is obliged to do.”

THE CASE

The claimant made, initially, a claim of £10 million against the defendant arising out of the onshore laying of gas pipeline.  In fact the claimant ended up with a judgment of £2,768,405.17.

THE JUDGE’S ASSESSMENT OF THE LAY WITNESS EVIDENCE

4. GENERAL OBSERVATIONS CONCERNING THE EVIDENCE
  1. The Documents
  2. As I have already noted, this was a case with a large volume of contemporaneous documents. Amongst the most important were the Daily Progress Reports (“DPR’s”) which were signed by both parties. There were also regular progress meetings, which were minuted. In addition, there was a good deal of correspondence (filling 27 lever arch files of the court bundle) in which the parties set out their respective positions on a range of issues, including of course the three claims with which I am now concerned.
  3. In my view, these contemporaneous documents are a useful starting point when trying to work out what was happening on site at any given time, and what the relevant individuals thought were the important events on site during the works. I find that the DPR’s are generally reliable. Although each side has sought to rely on the contemporaneous documents for different purposes, the truth is that, in the round, they are of much greater assistance to AUK for what they do not say, than they are to OSR for what they do say.
  4. This is because the contemporaneous documents do not emphasise to any degree the matters upon which OSR now seek to rely. In these proceedings OSR were claiming £10 million (now £8 million) by reference to the deeper peat and the alleged difficulties with the crossings of the existing pipelines. And yet there is little indication in the contemporaneous documents that, at the time, OSR put any great emphasis on these matters, or were claiming that they were likely to lead to a doubling of the Contract price. To the extent that the contents of the contemporaneous documents comprise a credibility test to be applied to the OSR claims, then I consider that, particularly in respect of the crossings (which is by far the largest single claim now made), they comprehensively fail that test.
  5. It is plain that OSR’s representatives have always been alive to this difficulty. Accordingly, right at the outset of the oral evidence, and at other times thereafter, OSR sought to make much of AUK’s request in April 2011 that the DPR’s exclude matters of a contractual nature. The suggestion was that OSR complied with this request, and therefore – for example – deliberately did not refer in the DPR’s to disruption or the fact that men or machines were standing idle, even though that was in fact the position.
  6. I reject that argument for four reasons. First, as Mr Smit confirmed in his cross-examination, AUK made clear on a number of occasions that they wanted details about progress and about the allocation of resources recorded in the DPR’s. That would include references to standing time. Secondly, a report that men or machinery were standing idle on a particular day is not a contractual issue, but a matter of fact, a report linked to progress and resource allocation. The alleged reasons for the standing time might be a contractual issue, but the reporting or recording of the factthat there was such standing time is precisely what needed to be included in the DPR’s. That the reports and other contemporaneous documents in this case make so few references to standing time or disruption, and the fact that detailed claims were not made in the large amounts now advanced until months, even years, after the period in question, are plainly factors undermining the credibility of OSR’s claims in these proceedings.
  7. Thirdly, in the contemporaneous documents, AUK made it quite clear that they did want the DPR’s and other contemporaneous documents to contain information about standing time if that was what was happening. So for example:
(a) On 28 November 2011, Mr de Graaf expressly told Mr O’Rourke that they needed to “spell out” all standing time, because otherwise any such claims, when passed up the contractual chain, would be rejected by TEP;

(b) On 15 February 2012 Mr Smit told OSR in writing that:

“CONTRACTOR should specify particular resources as being on standby for specific activities within its Daily Progress Report…CONTRACTOR is therefore requested to provide irrefutable evidence that such resources were so affected. Furthermore CONTRACTOR should also demonstrate that the purported delays are a direct result of the lock-out and not a result of delay events for which CONTRACTOR was culpable.”

Finally, on a perusal of the DPR’s, it is quickly apparent that OSR did not comply with the request in any event and did include, at least from time to time, material that was plainly relevant to what OSR saw as a contractual liability.

  1. For completeness, I should say that my view that the contemporaneous documents were not very helpful to OSR was not significantly modified by the contents of the pipebook, a record to which Ms Dallatomasina in particular referred. The contents do not, in my view, support the large Sicim claims now being made, and the manner in which the entries into the pipebook were completed was not always clear. References to the pipebook did not feature heavily in the OSR witness statements.
  2. OSR’s Factual Witnesses
  3. OSR called four witnesses: Mr Mulcair, a director and chairman of Roadbridge; Mr Anton O’Rourke, a project manager with Roadbridge, Mr Roberto Caviglia, the deputy director of Sicim; and Ms Tania Dallatomasina, a project coordinator with Sicim. The witness statements of Mr Caviglia and Ms Dallatomasina were very brief. The witness statement of Mr Mulcair was also fairly short and mainly went to the putting together of the tender, which was relevant to the claim in respect of unforeseen ground conditions, and what was said to be the intention/entitlement not to build an embankment in the Southern section.
  4. The witness statement of Mr O’Rourke ran to 210 paragraphs. It was therefore the only detailed statement relied on by OSR. The principal problem with his statement was that it was not focused on the very specific claims now being made. Instead, the bulk of it was a narrative of the project, which (as the cross-examination revealed) contained numerous matters on which Mr O’Rourke purported to be critical of AUK, but which were of no relevance at all to the claims in these proceedings[2]. It was the sort of statement that might have been appropriate for a general extension of time claim but, as Ms O’Farrell QC properly noted in her opening, this was not such a claim. When it was necessary to look for details to support the claims now made by OSR, Mr O’Rourke’s statement was usually found wanting.
  5. In addition, I regarded the oral evidence of Mr Mulcair and Mr O’Rourke as very unsatisfactory. Despite the fact that Mr Mulcair was the relevant director, and Mr O’Rourke had signed the relevant Statements of Truth relating to both the amended claim and the amended reply, both men were very reluctant to support or confirm important parts of OSR’s pleaded case. Indeed, during their cross-examination, both men – and in particular Mr Mulcair – appeared to go out of their way to disagree completely with the pleaded basis of the OSR claims.
  6. More surprisingly, this reticence also applied to the contemporaneous documents which they themselves had produced. Throughout the cross-examination of both men, they were taken to documents which they had prepared, or letters which they had written. Passages were put to them within those documents which were contrary to the factual basis of the claims now being asserted. Their responses were almost always evasive. On occasion they purported to put a construction on the words which they had used at the time which, although it helped the claims, was entirely implausible.
  7. Examples of Mr Mulcair’s failure to provide answers to simple questions meant that he avoided answering issues that went to the heart of Claim 3, including:
(a) When he was asked whether he had ever revisited the OSR prices after being sent the ground information contained in the Mackintosh probe survey;

(b) When he was asked about the deeper pockets of peat in the Southern section that were shown in that survey;

(c) When he was asked about the documents in which he stated his clear preference for a stone embankment throughout the length of the gas export pipeline;

(d) When he at one point sought to elide the concept of the stone road and the embankment.

  1. This last was merely one of a number of examples of Mr Mulcair’s refusal to accept the obvious interpretation of a contemporaneous document, in order to give an answer which he knew helped the OSR claim as now advanced. Another was his suggestion that, although his own document talked about the advantages of supporting the pipe with a stone embankment, he was actually referring to the embankment supporting the peat beside it (a completely different thing). That is a point I come back to at paragraphs 113-114 below.
  2. A further example of this unhappy approach to his oral evidence was Mr Mulcair’s reaction to the clear statement within OSR’s own documents that an embankment 14 metres wide was necessary (paragraphs 118-124 below). He claimed that, contrary to the document, which he saw at the time, he thought the width of the embankment would vary. When it was put to him that no such response was sent to the writer of the email, who obviously envisaged one width throughout, all he could say was that “this email was sent during a period of design development”. His evidence about the anticipated peat depth, and the dividing line between the depth of peat for which a stone embankment was necessary and the depth of peat that would justify a stone road was also vague, uncertain and unhelpful (see paragraph 133 below).
  3. Mr O’Rourke’s oral evidence was no better. He was the person most involved in the pleadings and had signed their Statements of Truth, so he was therefore the person formally responsible for the numerous errors within those pleadings. He sought to support the OSR claims when he was simply not in a position to do so because, for example, he had not been at the relevant meeting or was not on site at the critical time. He also said that he could not say what the peat depth was that OSR had anticipated, despite the fact that the pleadings he verified had purported to give precisely such figures.
  4. In relation to the crossings claim, his evidence ran counter to the principal thrust of OSR’s pleaded claim, which he had verified: he sought to argue that the problems were not due to the failure to obtain temporary crossings, but the delay in the granting of permission for the permanent works. This may have stemmed from his belated recognition of the difficulties faced by the temporary crossings claim, but it showed that, like Mr Mulcair, he was pretty much prepared to say anything in order to advance OSR’s claims, regardless of its truth or accuracy.
  5. Ms Dallatomasina sought to avoid questions on Sicim’s own default, particularly in relation to welding documentation. On the issue of the intended width of the embankment, she appeared to accept that Sicim always knew that the embankment would be at least 13 metres wide but, because she was aware that OSR’s pleaded case was that it would only be 8 metres wide, she sought to hang onto that case, without any conviction at all. She acknowledged a Sicim method statement which showed a width of at least 13 metres but, because of her knowledge of the pleaded case, she had to try and say that it was somehow inaccurate.
  6. Ms Dallatomasina was also obviously aware that the Sicim claims for standing time, which alone ran to millions of pounds, were unsupported by the DPR’s. She had to revert to the alleged instruction not to record the standing time, an assertion which I have already rejected (paragraphs 53-56 above). So when she was shown the subsequent letter which specifically asked OSR to make proper contemporaneous notes of standing resources (paragraph 55(b) above), she evaded the question until I had to ask her to answer it. She then said that, in some way, the letter was ‘too late’. Eventually she was obliged to say that, by then, she was no longer involved in the project. Again, I was left with a firm impression of almost persistent evasion of any question that went to the underlying validity of Sicim’s claims.
  7. Mr Caviglia’s evidence was not immune from this approach either: at one point, he was asked about his claim letter of 28 November in which he had identified an intended embankment width of 15 metres, which was of course directly contrary to the case now advanced by OSR. He airily said that he had made a mistake, without explaining how it had come about (see paragraphs 139 and 140 below). On another occasion, having given detailed answers which suggested that he knew what had happened, he realised that his answer would be unhelpful to the claim, so he suddenly said that he did not remember.
  8. It is also important to note the limitations of Mr Caviglia’s evidence. Although the Sicim claims form the vast bulk of the claims now advanced by OSR, his witness statement made no mention of the formal Sicim claims that were being made: their basis, structure or their quantification. He did not verify the accuracy of any of those claims. He expressly accepted in his oral evidence that he neither knew nor understood how the Sicim claims had been put together. Ms Dallatomasina had not been involved in the preparation of the claims either. This meant that, if Mr Lester, OSR’s expert, was not in a position to verify the mechanical claims advanced on behalf of Sicim, those claims were unsupported by any evidence at all.
  9. In summary, therefore, I regret to say that each of the four factual witnesses called by OSR endeavoured to avoid many of the questions put to them. Despite a number of interventions from the court to try and get them to do so, they stuck to what appears to have been a deliberate strategy of long, rambling answers designed to avoid the question and put their case in the best possible light, regardless of the truth. Although I found each rather engaging on a personal level, they were as unconvincing a group of factual witnesses in a commercial claim as I have ever encountered.
  10. This conclusion obviously has stark consequences for the OSR claim. In essence, it means that, unless a disputed factual element of the claim is unequivocally supported by contemporaneous material and/or the evidence of the AUK witnesses and/or the expert evidence, it will be most unlikely to find favour with the court. What is more, this highly unfavourable impression has been confirmed by the conduct of some of these same witnesses after they gave their oral evidence, a matter to which I refer in greater detail in Section 4.4 below, when dealing with the evidence of OSR’s expert, Mr Lester.
THE EXPERT EVIDENCE
  1. Each side called a quantum expert: OSR called Mr Lester, and AUK called Mr Kitt. Given that there was a myriad of options as to the valuation of some of the relevant Line Items, I accept that both men had an unenviable task. But, unhappily, I found that the difference in approach between the OSR and the AUK factual witnesses was even more marked when it came to the expert evidence. I endeavoured to give Mr Lester the benefit of the doubt, particularly given his frank admission that he had not previously prepared a written expert’s report or given evidence in the High Court, and because I was aware that he was dealing with a serious illness in his family. His abrupt departure from the witness box at a short break for the transcribers, never to return, was an indication of the undoubted stress he was under. But I regret to say that I came to the conclusions that his evidence was entirely worthless. There were a total of twelve different reasons for that conclusion.
  2. First, I find that Mr Lester repeatedly took OSR’s pleaded claims at face value and did not check the underlying documents that supported or undermined them. He uniformly utilised the rates which had been claimed by OSR, not on the basis of any quantity surveying or expert opinion he might have had as to their applicability, but because he had been told that those rates had been agreed by the parties in other contexts, in respect of different Change Order Requests (“COR’s”). On analysis, for many of the disputed Line Items, there was often no quantity surveying input from him at all.
  3. Secondly, as he made plain in his cross-examination, he prepared his report by only looking at the witness statements prepared on behalf of OSR. He did not look at the witness statements prepared on behalf of AUK. In some instances, this process culminated in Mr Lester cutting and pasting controversial parts of the OSR statements into his report as if they were in some way a contemporaneous record of events. His report and his evidence were therefore inevitably biased in favour of OSR.
  4. Thirdly, in contrast to Mr Kitt, Mr Lester refused to value these claims on any basis, or on any assumption, other than the full basis of the OSR claim (which had been prepared by Dal Sterling, claims consultants who did not give evidence). This was despite my exhortations to the experts, noted in the transcripts of the early days of the trial, that they were to agree figures based on both their own and the other side’s case. Thus Mr Lester’s figures were all skewed in favour of OSR, and there was nothing the other way. This was, of course, a very dangerous stance: if one of the disputed assumptions on which OSR’s claim was based was found to be wrong (and, as we shall see, Mr Lester repeatedly accepted that many of them were), there were no alternative figures, save for those put forward by Mr Kitt.
  5. Fourthly, not only did Mr Lester base his promotion of the OSR claims on made-up or calculated rates, but he never once considered, let alone formulated, claims based upon the actual costs incurred by OSR. On that basis alone, of course, the alternative claim for damages for breach of contract could never get off the ground. But it also created the overwhelming impression that the OSR claim (as supported by Mr Lester, at least until he came to be cross-examined) was potentially a ‘try-on’, relying as it did on calculated rates and all manner of assumptions said to have been made in the tender, but not credibly evidenced. Mr Lester resolutely refused to address the issue as to whether or not OSR had suffered any actual loss at all as a result of the events now complained of.
  6. Fifthly, throughout his cross-examination, Mr Lester was caught out on numerous matters, most of which were (with respect to Mr Lofthouse QC) relatively obvious, because so many of them had been pointed out months earlier by Mr Kitt in his first report. Mr Lester originally said that these were typing errors or examples of poor presentation, but, as his cross-examination wore on, he could not escape from the truth that many were much more fundamental than that, and went to the heart of his wholly uncritical approach to the OSR/Dal Sterling claim. By the end of his cross-examination, he was accepting every criticism or error being put to him by Mr Lofthouse QC; on occasions, he even conceded points before they had even been suggested. The admitted errors fatally undermined both his credibility and the credibility of the OSR/Dal Sterling claim as a whole.
  7. Sixthly, the widespread and important elements of the claim, which he admitted he could no longer support, drove him to say in cross-examination that he was not happy with any of his reports, not even with the one provided during the last week of the trial, just before he gave his oral evidence. If an expert disowns his own reports in this way, the court cannot sensibly have any regard to them.
  8. Seventhly, he repeatedly accepted that parts of his reports were confusing and accepted on more than one occasion that they were positively misleading. For example, he calculated various rates in his report because he said that it was necessary to do so, but then he did not use the rates that he had calculated, and used instead rates which OSR said that they had been paid for other work, and which he did not calculate at all.
  9. Eighthly, he appended documents to his original report which he had either not looked at all, or had certainly not checked in any detail. There was a clear inference that many of them had been put together by OSR themselves, or by Dal Sterling. On occasion, Mr Lester admitted in cross-examination that certain schedules had indeed prepared by either OSR or Dal Sterling, despite the fact that the reports themselves did not attribute authorship to anyone other than himself. He also accepted that, at least for some of these documents, he had appended them but had not checked the accuracy or reliability of their contents.
  10. Ninthly, he made repeated assertions in his reports that appeared to be expressions of his own views. They were certainly not attributed to anybody else. But in cross-examination it was revealed that these assertions came straight from discussions he had had with OSR witnesses, Mr Mulcair and Mr O’Rourke. Even more alarmingly, some of these assertions, in particular those in Mr Lester’s report provided at the start of the last week of the trial, related to matters on which both men had already been cross-examined and (in many instances) on which they had had no credible answer to the points being put to them. In this way, Mr Lester was used to try and plug the gaps in OSR’s evidence which had been exposed by Mr Lofthouse QC’s cross-examination of OSR’s witnesses of fact, without any input from Mr Lester himself. That is the complete opposite of what a responsible, independent expert is obliged to do. This subterfuge (for that is what it was) only became apparent during Mr Lester’s cross-examination. It reflected very badly on him, as well as on Mr Mulcair and Mr O’Rourke.
  11. Tenthly, this process reached its logical conclusion when a schedule was identified by Mr Lester in the third joint statement (produced just before Day 9 of the trial), following ‘Without Prejudice’ meetings with Mr Kitt. The statement said that he had prepared the schedule. In fact, it turned out that the schedule had been produced by Mr O’Rourke and Mr Mulcair. Mr Lester, having accepted in cross-examination that he had not prepared it, continued to maintain that he had checked and approved it. However, further cross-examination revealed that what he meant by that was that he had discussed the schedule with Mr Mulcair, and had accepted what Mr Mulcair had said about it. In fact the cross-examination revealed that the schedule contained important errors and must be discounted in its entirety.
  12. Eleventhly, following on from Mr Lester’s uncritical passing on of the OSR claims and the Dal Sterling claim documents, he accepted, as he was bound to do, that instead of checking the claims himself, he had preferred to recite what others had told him, even though what he had been told could be shown to be obviously wrong.
  13. Finally, Mr Lester confirmed to me that he had never considered valuing these Line Items by reference to fair and reasonable rates. Remarkably, he seemed almost proud that he had not embarked on that exercise. In my view, this omission made the entirety of the valuation exercise he had carried out of no value, because he had not, even as a cross-check, investigated whether the figures he was so carelessly promoting were actually fair or reasonable, or instead represented some kind of windfall for OSR. It became apparent in his cross-examination that many of the rates he had adopted were far from fair or reasonable.
  14. For these reasons, therefore, I consider that Mr Lester allowed himself to be used, whether wittingly or otherwise, by OSR and Dal Sterling (those with the most to gain in this litigation) to act as their mouthpiece. It was almost as if they were trying to see how much of their claim they could get past Mr Lester, and then Mr Kitt, and ultimately the Court. It made a mockery of the oath which Mr Lester had taken at the outset of his evidence, even though, as I have said, there were some extenuating circumstances.
  15. For all these reasons, I am bound to find that Mr Lester was not independent and his evaluations (to the extent that he did any independent valuations which were relevant) were neither appropriate nor reliable. I am obliged to disregard his evidence in full.
  16. My adverse views about Mr Lester’s performance will come as no surprise to OSR’s legal team. As I would have expected from leading counsel of Ms O’Farrell QC’s integrity and acumen, at paragraph 26 of her closing submissions, she expressly accepted that Mr Lester “…did not meet the standards that are expected for an independent expert giving evidence in court. He did not appear to have checked the claims adequately or carried out a comprehensive analysis of the documentary records so as to provide an independent valuation against each claim.”
  17. Although Ms O’Farrell QC went on to submit that, despite this, his opinions as to the basis of valuation were “sound” and that his views and the agreements he had reached as to the basis of valuation should be followed by the court, I regret that, for the reasons I have given, I am unable to accept that submission.

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