WITNESSES STATEMENTS THAT DON’T COMPLY WITH THE RULES: 10 REASONS WHY THE GIVING THE SOURCE OF INFORMATION IS IMPORTANT: LITIGATION REQUIRES EVIDENCE NOT GOSSIP

There is a brief report on Lawtel that highlights the need for compliance with the rules relating to witness statements. The issue of failing to give sources of information and belief has been dealt with several times on this blog. This rule is important because a failure to adhere to it can (and as we shall see does) lead to a party relying on gossip and speculation rather than evidence.

THE CASE

In BDW Trading Ltd -v- Geotechnique Ltd (Fraser J 24/01/2018) a solicitor had provided a witness statement stating that the defendant did not know whether the claimant had a certain report or whether they had relied on.

THE DEFICIENCY IN THE STATEMENT

The solicitor’s statement did not comply with CPR PD 32.

“18.2 A witness statement must indicate:

(1) which of the statements in it are made from the witness’s own knowledge and which are matters of information or belief, and

(2) the source for any matters of information or belief.”

THE CONSEQUENCES

The judge ordered the defendant to redraft the witness statement so that it complied with PD 32. Simply stating that the defendant did not know whether the report had been provided was not compliant with the rules.

OTHER EXAMPLES

Ali -v- CIS General Insurance (29/7/2015) where a claimant’s action was struck out because of failure to give disclosure. However there was a passing comment in the judgment  which demonstrated a common trend in relation to witness evidence.

The defendant was applying to strike out for non-disclosure.  A witness statement was made in support.

THE DEFENDANT’S WITNESS STATEMENT

“The application was supported by a witness statement from Louise Hilton, who fails to explain the source of her knowledge. She appears to occupy some position with the defendant’s solicitors”

The defendant was fortunate that the judge elected to overlook two basic rules in relation to witness statement

TEN KEY POINTS

(1) A FAILURE TO GIVE THE SOURCE OF INFORMATION AND BELIEF CAN SOMETIMES BE FATAL TO THE ENTIRE APPLICATION OR CASE

See the observations of Mr  Justice Mann in JSC Mezhdunarodniy Promyshlenniy Bank -v- Sergi Viktorovich Pugachev [2014] EWHC 4336 (Ch) when considering submissions that statements contained hearsay evidence.

“He complains that it contains an enormous amount of hearsay evidence but generally does not identify its source. His point is that it is unacceptable to base an application for a worldwide freezing order as serious as this one (or indeed any freezing order) on evidence which does not conform to the requirements for identifying sources. The point comes down to one of weight, and without an identified source much of Mr Roberts’ evidence should be given much less weight. He submits that this is not a pointless (or point-scoring) quibble; the requirements to identify the source are an important part of the protection provided to the other side, and unless it is done it is all too easy to use unattributed statements to create a generalised impression intended to smear (which is my summary of his point, not his word) Mr Pugachev. Mr Tregear does not deploy this as a standalone knockout blow, but says it has to go into the scales with the other points that he relies on.”

Further in response to an argument that a solicitor could not give the source since it was “privileged”.

“I would observe at this point that the reference to privilege would seem to me to be misplaced, as Mr Smith was eventually constrained to accept. If it were a good point then any lawyer giving hearsay evidence for his client in an interim application would be able to decline to identify the source of information. The position is that giving hearsay evidence in those circumstances is an opportunity afforded to a litigant but it comes at the price of identifying individuals who are the source of the evidence (usually). Once the information has been disclosed then no privilege can exist, and there can be nothing objectionable in terms of the law of privilege in requiring a solicitor to identify the source of what has become non-privileged information. A litigant has a choice. If he wishes to rely on this information then the price is that the source is no longer privileged. If he does not want to identify the source then he cannot rely on the information and at the same time maintain the claim to privilege.”

(2)THE RULES SAY “MUST”

See also Aitkens LJ in  Consolidated Contractors International Company SAL and Others v Munib Masri [2011] EWCA Civ 21

“ 32. In my view the aim of that paragraph of the Practice Direction is to ensure that a person against whom serious allegations are being made can identify the source of any information or belief that is not within the deponent’s own knowledge so that the facts deposed to on the basis of information or belief can be investigated. That is only fair to the person against whom the evidence in the affidavit is directed. Therefore, I would interpret the phrase “must indicate….the source of any matters of information or belief” as meaning that, save in exceptional cases, the deponent must identify the source of the relevant information or belief. If the source is a person, that person must, save in exceptional cases, be identified with sufficient certainty to enable the person against whom the affidavit is directed to investigate the information or belief in accordance with the rules of court or other relevant legal principles.

 (3) FAILURE TO COMPLY COULD LEAD TO A MAJOR HOME GOAL

In YXB -v- TNO[2015] EWHC 826 (QB) Mr Justice Warby considered the evidence provided on behalf of the claimant in a case in which a well-known footballer sought a without notice injunction.

. This part of the evidence therefore seems to be Ms Feely’s account of what Mr Manley told her he had been told by the Agent. Further degrees of hearsay are involved, as will be clear from the account given,... .

1. The defendant’s statement notes at paragraph 50 that there was no mention in Ms Feely’s first statement of any distress that would be caused to YXB by the release of any of the information. The response came in Ms Feely’s third statement. The information in this statement was, like her first, said to be “derived from my own knowledge unless otherwise stated.” At paragraph 18 she refers to the defendant’s paragraph 50, describing it as “remarkable” to suggest the claimant would not be distressed. She asserts that it is “obvious that such would result from infringement of his privacy. For the avoidance of any doubt the publication of the claimant’s confidential and private information would undoubtedly cause the claimant distress and embarrassment.” This once again takes the form of a submission rather than a statement of fact based on what she has been told by the claimant. She goes on “The claimant believes that his sex life is and should remain private and that details of it should not be published to the world at large (whether for commercial gain or not)”. This is not much better. Although it does refer to what the claimant believes, it does not state that she has spoken to him about the matter. I note that the statement of truth on the Particulars of Claim is not signed by the claimant but by Ms Feely.

(4)THIS IS A RECURRENT  DEFICIENCY

Dar Al Arkan Real Estate Development Company and Ors –v- Mr Majid Al – Sayed Bader Hashim Al Refai and Ors [2012] EWHC 3539 para 19. The Court was considering an application by the defendant’s to set aside an ex parte order obtained by the claimant on the grounds that the claimant had failed to give full and frank disclosure.   Andrew Smith J observed of one of the claimant’s witnesses:-

“I observe that Dr Almajthoob did not properly state the source of his information: the reference to enquiry agents engaged by the claimants was not adequate: see Masri v Consolidated Contractors International Co SAL, [2011] EWCA Civ 21 , White Book, 32.15.4. This is a recurrent deficiency in the claimants’ evidence, both that adduced at the ex parte hearings and later affidavits and statements although all the witnesses have routinely and inaccurately stated that they give the source of the information about facts and matters not within their own knowledge. This has much detracted from the quality of their evidence”

(The ex parte order was set aside, overall witness credibility playing an important part in this determination).

(5) IF YOUR WITNESS STATEMENT DOESN’T COMPLY YOU MAY HAVE TO PAY THE PIPER

In Barclays Bank –v- Piper (CA 23^rd May 1995), the Court of Appeal considered a technical argument about the provisions under RSC Order 14 (the previous rule for summary judgment).

“The third head relates to defects in the Affidavit of the bank’s solicitor Mr Harper. Those defects are first a failure to identify the source of his information or belief. Second a failure to assert that the facts pleaded in the Statement of Claim are true. Third, a failure to depose to a belief that there is no defence to the bank’s claims.”

“Mr Stanton relied on the Notes at para 14/2/7 and 14/2/8 of the Supreme Court Practice. Mr Stanton accepted that these objections to the form of Mr Harper’s Affidavit were technical but submitted that a Defendant may show cause against a Plaintiff’s application for Summary Judgment under Ord 14 by a preliminary or technical objection, for example that the Affidavit in support is defective because it does not amount to a due verification of the claim. Mr Stanton drew the court’s attention to the note at para 14/3-4/3 in Vol. 1 of the Supreme Court Practice, 1995.”

The plaintiff’s solicitor swore a second affidavit which attempted to rectify the omissions made in the first affidavit. Roch LJ stated:

“In my judgment the second Affidavit of Mr Harper concedes the technical defects in his first Affidavit without correcting them. The second Affidavit does not make clear from which source Mr Harper received particular information. I would accept the submissions of Mr Stanton that Ord 14 Proceedings, because they may deprive a defendant of his opportunity to defend a plaintiff’s claim and in particular the opportunity of hearing and cross examining the plaintiff’s witnesses, make it all the more necessary that the technical requirements of an Affidavit in support of the application for Summary Judgment should be observed, so that a defendant and the Court can assess whether the information or belief as to the material matters on which the plaintiff’s claim is based were derived directly or indirectly from persons who could be expected to have the necessary knowledge or be the keepers of the necessary documents. Order 14 proceedings are quite unlike applications for Interlocutory Injunctions in which liberty to the defendant to apply to set aside the Order will be a standard term. An Ord 14 Judgment finally disposes of the Action, in a summary manner. The purpose of the rules relating to the contents of the affidavit in support is to ensure that the plaintiffs have demonstrated that the case is a proper case for summary judgment. In this case it should have been simple for the Bank’s solicitor to obtain the necessary information from persons having first hand knowledge of the appellant’s loan account.”

(6) EVIDENCE OF THIS TYPE OFTEN SPILLS OVER INTO GIVING THE COURT THE BENEFIT OF THE WITNESSES “OPINION”

In witness statements drafted without consideration of the rules there is often a basic failure to understand the very nature of “evidence”. This is a common event and seen in many, many witness statements, particularly in interlocutory applications. It is precisely the problem identified by Sir James Munby in Darlington Borough Council -v- M [2015] EWFC 11 when considering a schedule of findings.

“It confuses the crucial distinction, once upon a time, though no longer, spelt out in the rules of pleading and well understood, between an assertion of fact and the evidence needed to prove the assertion”

(7)JUDGES TEND TO GUARD THEIR ROLE AS FACT FINDERS SOMEWHAT JEALOUSLY

Smith J in Rock Nominees v RCO Holdings [2003] EWHC 936 (CH) when he said of a witness:-

“Before he actually gave evidence we had the somewhat surprising spectacle of finding something like 75% of the witness statement being struck out, as Mr Potts QC conceded in effect the material there, consisting largely of assertions, expressions of opinion and usurpation of my role, should never have been there in the first place.”

(8) IT CAN ALL BE AN (EXPENSIVE) WASTE OF TIME

See Norcross -v- Georgallides [2015] EWHC 2405 (Comm) where judgment was given on the same day as this post. One witness statement gave “evidence” of matters the witness had no direct knowledge of. In relation to another.

1. Mr Dickinson’s witness statement extended beyond admissible evidence of fact. He expressed his views about usual accounting practice, and offered his opinion that in some ways AOG had behaved as “no responsible firm of accountants” would have done. No permission was sought or given for Mr Dickinson to give expert evidence, and this was not properly included in his witness statement. In any case I do not consider these views useful, and I disregard them.

(9) JUDGES TEND NOT TO BE TOOK KEEN TO ACCEPT THE EVIDENCE OF WITNESSES WHO SAY THINGS THAT THEY DO NOT ACTUALLY KNOW

See the decision of Akhlaq Choudry QC (sitting as a Deputy High Court Judge) in Gamatronic (UK) Limited -v- Hamilton [2016] EWHC 2225 (QB).

The claimants were alleging numerous breaches of fiduciary and contractual duties by defendants in their roles as directors and employees. The judge considered the witness evidence called by the claimants.

THE WITNESS WHO SAID THINGS SHE DID NOT KNOW

1. The evidence of Ms West, by contrast, was far from satisfactory. There are several reasons why I came to that view. I mention just three here although I will refer to others in due course. First, although it was no part of her responsibility to process expense claims she sought to suggest that the Defendants had regularly claimed home to work mileage. When pressed as to the source of her information, it was apparent that Ms West had no direct knowledge of the expense claims and was relying upon no more than a few unclear snippets of conversations with others. She could give no satisfactory explanation as to why these matters would even have been mentioned to her. Second, in her statement she sought to give evidence as to the Defendants’ attendance at the office and that this had declined from 2010 onwards. She said:

My experience of being managed by Mr Hamilton between 2008 and 2010 was that he was generally in the office at around 8.00am and left at around 6.00 to 6.30pm every day of the working week.

1. However, Ms West conceded that Mr Hamilton would spend a considerable amount of time out of the office each week and that her statement could only have been referring to the days when he was in the office. Her statement also states that she generally left the office between 4 and 5pm. She was not therefore in any position to say when Mr Hamilton left the office each day if it was after that time. She also sought to give evidence as to meetings between the Defendants and Mr Ward and Mr Flynn during October and November 2011. It was surprising that she felt able to give the evidence that she did about such meetings when, on her own evidence, she left at around the time such meetings started. Finally, Ms West gave evidence which was clearly meant to imply that Ms Mansfield had deliberately burned company documents including expenses receipts and claim forms.

The witness said that expense receipts were missing and documents had been burnt.

1. However, the falsity of that claim, namely that the expenses folder relating to the Defendants was missing, was exposed on the final day of the trial when the Claimants disclosed a substantial quantity of the Defendants’ expense claim forms. Of course it may be that Ms West was led to believe what she did about the expense forms being missing from what she was told by Mr Malinsky. However, that was not made clear in her statement, and the impression she gave in her statement is that this was something within her direct knowledge when that was not the case. The inescapable conclusion to be drawn from all of this is that Ms West was willing to give the impression that Ms Mansfield was responsible for the expenses folder going missing and had asked Mr Peddel to burn important documents including expense claim forms even though she had no real basis for doing so. I regret to say that I found Ms West’s evidence to be generally unreliable.

(10) IT FOCUSES THE MIND AND GIVES AN ACCURATE ASSESSMENT OF THE STRENGTH OF THE EVIDENCE

Many statements are taken without regard to this requirement.  This can lead a party to believe they have a strong case when it is based on, gossip, speculation and hearsay. Countless litigants have found this out to their costs.