EXPERTS ACTING ON A CONDITIONAL FEE BASIS: A MAJOR PROBLEM AREA: DETAILED CONSIDERATION FROM THE UPPER TRIBUNAL

I am grateful to  Graham Hain  for pointing out the decision of  the Upper Tribunal (Lands) Chamber in Gardiner & Theobald LLP v Jackson (VO) (RATING – procedure) [2018] UKUT 253 (LC). This specifically relates to experts in the Lands Chamber, however there is much of relevance to the instruction and conduct of experts generally.  There is a review of the duties an expert owes to the court and detailed consideration of the risks of experts acting on a conditional fee basis.

“However, one thing is certainly clear. Whatever approach this Tribunal decides to adopt on the issues raised by Factortame, it remains wholly unacceptable for an expert witness, or the practice for which he or she works, to enter into a conditional fee arrangement, without that fact being declared (and in sufficient detail) to the Tribunal and any other party to the proceedings from the very outset of their involvement in the case. The Tribunal will treat such a failure as a serious matter.”

THE CASE

The Tribunal were considering a case where an expert who had prepared a report to be used in the Tribunal. The expert had been working on a conditional fee basis for some of the work being done for the litigant but not for the preparation of the report itself.

THE ISSUE

The issue was encapsulated by the Tribunal.

“This decision is concerned with important matters of principle affecting the conduct of experts, including surveyors, who undertake the vitally important role of providing expert reports and evidence in appeals or references before this Tribunal. Does the obligation to declare a success-related fee arrangement apply to remuneration not only for services as an expert witness, but also for services provided by that expert (or the practice for which he or she works) other than as an expert witness, whether before or during the currency of those proceedings? To what extent may success-related fees be compatible with an expert’s obligation to the Tribunal to act independently?”

GENERAL GUIDANCE ON THE CONDUCT OF EXPERTS

After reviewing the facts the Tribunal went on to give very clear evidence of the duties owed by experts, particularly those acting on a conditional fee basis.

  1. In view of the issues raised by the hearing it is necessary for the Tribunal to re-emphasise to all users the importance of the obligations owed by expert witnesses to the Tribunal, notably the duty of independence. We will also address the implications they have for success-related remuneration, access to justice and the regulation of compliance with those obligations.
  2. The general rules governing procedure in this Tribunal are contained in Part 1 of the Tribunals, Courts and Enforcement Act 2007, the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 (SI 2010 No.2600) and the Tribunal’s Practice Directions dated 29 November 2010.  In rating appeals these provisions are supplemented by the Local Government Finance Act 1988 and relevant delegated legislation, but they do not contain any explicit provisions dealing with an expert’s independence and duties in proceedings before the Tribunal.
  3. Rule 2(1) of the 2010 Rules sets out the “overriding objective” of the Rules, namely “to enable the Tribunal to deal with cases fairly and justly”.  Under rule 2(3) the Tribunal must seek to give effect to that objective when it (a) exercises any power under the Rules and (b) interprets any rule or practice direction.  Under rule 2(4) the partiesmust(a) help the Tribunal to further the overriding objective and (b) co-operate with the Tribunal generally.
  4. Rule 5(1) empowers the Tribunal to “regulate its own procedure”.
  5. By rule 16(1) the Tribunal may give directions as to (inter alia) whether the parties arepermittedto provide expert evidence.
  6. Rule 17 deals specifically with expert evidence.  By rule 17(1): –
            “It is the duty of an expert to help the Tribunal on matters within the expert’s expertise                 and this duty overrides any obligation to the person from whom the expert has received                       instructions or by whom the expert is paid”
  1. Expert evidence is to be given in a written report unless the Tribunal directs otherwise (rule 17(4)).  Such a report must: –
“(a) contain a statement that the expert understands the duty in paragraph (1) and has complied with it,
(b) contains the words “I believe that the facts stated in this report are true and that the opinions expressed are correct”,
(c) comply with the requirements of any practice directions as regards its form and contents, and
(d) be signed by the expert.”
  1. Part 8 of the Tribunal’s Practice Directions deals with expert evidence.  Paragraph 8.2 deals with the form and content of an expert’s report.  Several of the provisions are based upon the requirement that an expert witness be independent and impartial.
  2. In substance rule 17(1) of the 2010 Rules is identical to CPR 35.3 of the Civil Procedure Rules.  CPR 35.10(2) is similar to Rule 17(5)(a) of the 2010 Rules.  CPR 35.10(1) requires an expert’s report to comply with Practice Direction 35.  Paragraph 3.2 of PD 35 lays down requirements for the content of an expert’s report which are similar to those contained in paragraph 8.2 of the Tribunal’s Practice Directions.
  3. The expert’s duty to help the Tribunal, which overrides any obligation to the client (rule 17(1) of the 2010 Rules), connotes an obligation to act independently and without bias.  The obligation is so similar to that in CPR 35.3 that it is helpful to refer to the related commentary in “Civil Procedure” (2018).  Because this obligation is fundamental to the duty of an expert giving evidence in the Tribunal, it is appropriate to set out certain of the key principles summarised inThe “Ikarian Reefer” [1993] 2 Lloyd’s Rep 455: –
1. Expert evidence presented to the Court should be, and should be seen to be, the independent product of the expert uninfluenced as to form or content by the exigencies of litigation (Whitehouse v. Jordan [1981] 1 WLR 246at p. 256, per Lord Wilberforce).
  1. An expert witness should provide independent assistance to the Court by way of objective, unbiased opinion in relation to matters within his expertise (seePolivitte Ltd. v. Commercial Union Assurance Co. plc [1987] 1 Lloyd’s Rep. 379at p. 386 per Garland J andRe J [1990] FCR 193per Cazalet J). An expert witness in the High Court should never assume the role of an advocate.
  1. An expert witness should state the facts or assumptions upon which his opinion is based. He should not omit to consider material facts which could detract from his concluded opinion (Re Jsupra).
  1. An expert witness should make it clear when a particular question or issue falls outside his expertise.
  1. If an expert’s opinion is not properly researched because he considers that insufficient data is available, then this must be stated with an indication that the opinion is no more than a provisional one (Re Jsupra). In cases where an expert witness, who has prepared a report, could not assert that the report contained the truth, the whole truth and nothing but the truth without some qualification, that qualification should be stated in the report (Derby & Co. Ltd. v Weldon The Times 9 November 1990per Staughton LJ).
  1. If, after exchange of reports, an expert witness changes his view on a material matter having read the other side’s expert’s report or for any other reason, such change of view should be communicated (through legal representatives) to the other side without delay and when appropriate to the Court.”
  1. Paragraph 35.3.4 of “Civil Procedure” (2018) summarises a number of decisions in which the implications of an expert’s obligation to act independently have been examined. It is in this context that the courts have considered whether an arrangement for remunerating an expert witness by a success-related fee is compatible with that expert’s obligations to the court in which he or she is acting, especially the obligation to act independently and impartially.
The decision in Factortame
  1. InR v (Factortame Ltd) v Secretary of State for Transport, Local Government and the Regions (No.8)[2003] QB 381the Court of Appeal discussed the duty of an expert witness in the civil courts to act independently (paras. 63 to 75). Having decided that the test for apparent bias should not be applied to experts the Court went on to say: –
 “Expert evidence comes in many forms and in relation to many different types of issue. It is always desirable that an expert should have no actual or apparent interest in the outcome of the proceedings in which he gives evidence, but such disinterest is not automatically a precondition to the admissibility of his evidence. Where an expert has an interest of one kind or another in the outcome of the case, this fact should be made known to the court as soon as possible. The question of whether the proposed expert should be permitted to give evidence should then be determined in the course of case management. In considering that question the Judge will have to weigh the alternative choices open if the expert’s evidence is excluded, having regard to the overriding objective of the Civil Procedure Rules.”
On the subject of contingency fee arrangements, Lord Phillips MR (as he then was) stated (para. 73): –
“To give evidence on a contingency fee basis gives an expert, who would otherwise be independent, a significant financial interest in the outcome of the case. As a general proposition, such an interest is highly undesirable. In many cases the expert will be giving an authoritative opinion on issues that are critical to the outcome of the case. In such a situation the threat to his objectivity posed by a contingency fee agreement may carry greater dangers to the administration of justice than would the interest of an advocate or solicitor acting under a similar agreement. Accordingly, we consider that it will be in a very rare case indeed that the Court will be prepared to consent to an expert being instructed under a contingency fee agreement.”
The courts have not subsequently departed from those views.  They are also reflected in para. 88 of the Guidance for the Instruction of Experts to Give Evidence in Civil Claims 2014 (see PD 35 para. 1).
  1. InBPP Holdings Ltd v Revenue and Customs Commissioners[2017] 1 WLR 2945Lord Neuberger PSC (with whom the other members of the Supreme Court agreed) stated at para. 23:
          “while it would be both unrealistic and undesirable for the tribunals to develop their            procedural jurisprudence on any topic without paying close regard to the approach of the        courts to that topic, the tribunals have different rules from the courts and sometimes require            a slightly different approach to a particular procedural issue.”
Whether the same or a different approach should be taken to a particular issue as the courts have taken, is a matter primarily for this Tribunal and the Court of Appeal, in the light of the statutory framework and rules under which the Tribunal operates (paras. 24-26).
  1. The extent to which theapproach in Factortame should be applied in this Tribunal has not been argued in the present case. If and when this issue does arise for decision, the Tribunal may be asked to hold that that approach should be applied to conditional or other success-related fee arrangements entered into by expert witnesses or the practice for which they work, at least for cases dealt with under the Tribunal’s standard or special procedures.[4]We can envisage that the Tribunal will be asked to address a number of important issues. As Lord Phillips MR indicated, the position of a barrister or solicitor should not be confused or elided with that of an expert witness. The Tribunal decides cases on the evidence before it. An advocate (or an instructing solicitor) does not give evidence, but an expert witness does. It is the role of the Tribunal to evaluate that evidence and in doing so bring its own specialist expertise to bear upon it. The use of that expertise entitles the Tribunal to take a different approach to that put forward by the parties where it considers it appropriate to do so, subject to allowing the parties an opportunity to deal with that point where fairness would so require (Aquilina v Havering LBC (1993) 66 P & CR 69;Faraday v Carmarthenshire County Council [2004] EWCA Civ 649[2004] 2 EGLR 5[2004] RVR 236).
  2. In many, if not most, cases before the Tribunal, both the data assembled by an expert in his evidence and the opinion he gives will be crucial to the outcome of the dispute for the parties, even if there are also factual disputes to be resolved in the decision. This issue embraces not simply the opinions which the expert gives, but also the information (eg. on the property, comparables, surveys, structural and engineering matters, planning history and so on) which he supplies and on which his opinion is based, and to which the evidence of the opposing party will react. A party to a dispute before the Tribunal might wish to oppose an opponent’s reliance upon an expert remunerated by success-related fees because of the risk that poses to the objectivity of that expert and the uncertainty to which it may give rise about whether the expert has disclosed all that he should. An expert is obliged to provide information or knowledge (and not simply documents) which may go substantially beyond the scope of the disclosure obligations owed by his client and any solicitor involved, such “disclosure” generally involving only documents which are or have been in the control of the client.
  3. A further consideration which the Tribunal will likely be asked to address is that the requirement for an expert to act objectively and independently applies not just to the stage when he is giving live evidence at a hearing. It applies to all stages of his involvement in the proceedings. It affects the initial exchange of information by an expert with his opposite number, the discussions they have to identify matters of common ground and the issues upon which they should focus, the preparation of their respective expert reports and further exchanges thereafter leading up to the agreement of a joint statement for the Tribunal. In some cases, an opinion expressed by an expert and the adequacy of the information he discloses may affect the work of experts in other disciplines which depends wholly or in part upon that information and opinion. If there were to be a lack of objectivity in any of these various stages, then it may be said that the administration of justice will be put at risk if that remains undiscovered before the Tribunal’s decision is given. Even if it is discovered, it may also be said that there is a risk of time, work and costs being wasted, additional work becoming necessary and the proceedings delayed.
  4. Some might argue that such concerns may be reduced in cases where each party in a case seeks to rely upon an expert remunerated by a success-related fee. Others may respond that these concerns would not disappear and that the Tribunal’s task of achieving a proper and just outcome may be rendered more difficult, and unjustifiably so.
  5. There may also be concerns about the suggestion that a conditional fee arrangement may be acceptable where a surveyor, or other expert, acts in a dual capacity both as an advocate and as an expert witness in the same case. There may be a justification for allowing such arrangements in simplified procedure cases[5]where access to justice could not otherwise be achieved. But doubts are likely to be expressed about the notion that conditional fee agreements are acceptable simply because they may be seen as attaching to the role of the advocate. [6]Even in straightforward cases, some might say that the role of the expert in providing relevant information to the other party and the Tribunal and in giving opinion evidence is just as important, if not more important, than the role of the advocate. Perhaps one solution might be to allow this type of arrangement only in a relatively simple case where it is shown to the Tribunal to be necessary in order to provide access to justice, because alternative measures would not achieve that purpose. [7]If so, there might also be a requirement for dedicated training requirements. But the Tribunal may need to be cautious even in such cases. For example, there are sometimes concerns about the objectivity and independence of an expert (whether acting in a dual role or simply as a witness) who provides services on a “no win, no fee” basis as part of an exercise to gather up a substantial number of low value claims, where the expert has a clear financial interest, not only in the single or limited number of cases taken to a hearing, but in the many settlements which are expected to flow from those initial decisions.
  6. We were not referred to any decisions of the Tribunal which have considered the implications of an expert witness being entitled to success-related remuneration. But from our own researches we note that the Lands Tribunal had encountered such a situation even before Factortame was decided. In Keen v Worcestershire County Council (LCA/44/2001)[8]the claimants sought compensation under Part 1 of the Land Compensation Act 1973 for depreciation in the value of their home arising from the use of a new by-pass. Evidence was given on their behalf by a surveyor who was also acting for more than 50 other homeowners with similar claims. The claimants’ case was advanced as a lead case. The surveyor acted on a no win, no fee basis, but he did not disclose that fact to the Tribunal in his report; it emerged at the hearing (paras. 10 and 17). The Tribunal decided that no weight should be given to the surveyor’s opinion evidence, because of his financial interest in the outcome of the reference (para. 50). But it should be noted that in Keen the Tribunal was given no opportunity at an earlier stage to consider whether the expert should be allowed to act as an expert witness on a conditional fee basis. Given that oral evidence was heard from both experts, it is not surprising that in those circumstances the Tribunal decided to deal with the issue as a matter of weight, rather than admissibility.
  7. Nonetheless it might be argued that a possible alternative to th eFactortame approach would be for the Tribunal to take into account the factors identified by Lord Phillips (and other issues referred to above) as going to the weightto be attached to an expert’s report, rather than to its admissibility. Some might say that this would allow a more nuanced approach to be taken to the issues raised and would avoid an overly inflexible approach. One implication of this “weight approach” is that the Tribunal’s reaction to the remuneration of an expert by a success-related fee would occur after the hearing, during the course of its evaluation of the evidence in the decision. In other words, it would occur at the end of the process rather than at an earlier case management stage. Some might argue that this would be advantageous because it would enable the Tribunal to form a view on the effect of the conditional fee arrangement in the light of the expert’s handling of the proceedings throughout the case and the evidence in fact given. Others might respond that it would be preferable for all parties to know from an early stage whether remuneration on a success-related basis in that particular case is acceptable or not. By contrast, a party who is told early on that he may employ an expert on a success-related basis may not be very happy to discover at the end of the day that he has been unsuccessful, or not entirely successful, because the Tribunal decides to attach no weight to his expert witness on that ground (as in the Keencase).
  8. There are other questions which would need to be addressed about the “weight approach”. How could the Tribunal fairly and properly assess the weight to be given to the fact that an expert’s entitlement to remuneration is dependent upon his client’s case succeeding? For example, how could the Tribunal reflect the risk that the expert may not have provided all the information which he ought to have done, particularly in a case where this is an unknown and there are no specific pointers to the expert having breached his duty of independence to the Tribunal? Is it right that the opposing party should have to take part in litigation facing this risk of non-disclosure? What are the merits and demerits of the Tribunal having to evaluate these factors in its decisions?
  9. These issues would need to be the subject of well-considered submissions following detailed research. We also raise them for consideration by, and discussion amongst, the Tribunal’s users and the various professional bodies involved. No doubt there will be other matters to consider which we have not identified.
  10. However, one thing is certainly clear. Whatever approach this Tribunal decides to adopt on the issues raised by Factortame, it remains wholly unacceptable for an expert witness, or the practice for which he or she works, to enter into a conditional fee arrangement, without that fact being declared (and in sufficient detail) to the Tribunal and any other party to the proceedings from the very outset of their involvement in the case. The Tribunal will treat such a failure as a serious matter.
The conditional fee agreement in the present case
  1. In the present case no conditional fee arrangement applied to the services provided by Colliers for the appellant through Mr Clarke acting as an expert witness in the VTE and in this Tribunal. Those services were the subject of arrangements for the payment of fixed fees. However, for the services covered by the letter of instruction in 2009, Colliers were entitled to a success-related fee in the event of (inter alia) them agreeing with the VO an alteration of the rateable value in the 2010 list which reduced the appellant’s liability for rates during the currency of that list, even if such an agreement were to be made at a time when Mr Clarke was acting as an expert witness for the appellant in its appeals to the VTE or this Tribunal.
  2. For a number of reasons, we consider that the concerns expressed in Factortame about the implications for the independence of an expert witness apply equally to a conditional fee agreement of that nature. First, the expert witness, or the practice for which he works, has a direct financial interest in the assessment of the rateable value, whether determined by agreement with the VO or by a Tribunal decision. Second, that financial interest impairs or undermines the independence and impartiality required of that expert in the Tribunal’s proceedings. There is a clear risk that an expert may fail to comply with his obligations to the Tribunal, because to do so would adversely affect the prospect of successfully negotiating and agreeing with the VO a reduced rateable value and receiving the conditional fee. For the reasons we have already given, we are not in a position to make adverse findings against Colliers or Mr Clarke in this respect. But the circumstances of the present case illustrate why the concerns raised in Factortame apply to any agreement for the provision of any service by an expert or the practice for which he works, where that person is acting as an expert witness in an appeal to the Tribunal, and the entitlement to the fee for that service is related to the outcome of the appeal, whether by a decision of the Tribunal or by the parties agreeing to settle the subject-matter of the appeal. An expert may fail to disclose to the other party and to the Tribunal information which should be disclosed but is adverse to the appellant’s case (and hence the expert’s financial interest), because he continues to expect or hope that the dispute will be settled.[9]These same considerations apply to an expert witness acting in other types of case before the Tribunal (eg. compensation disputes) where the outcome is likely to be affected by that person’s performance throughout the proceedings as an expert witness.
  3. Mr Lewsley submitted that it should be acceptable for an expert witness (or his practice) to benefit from a conditional fee for services he provides in addition to acting as an expert in the Tribunal because there is a countervailing public interest, namely the encouragement of parties to resolve disputes which are the subject of litigation. On the submissions we have heard, we do not accept this line of argument. Not all attempts at settling disputes are successful. There is usually a risk of the Tribunal having to adjudicate upon a dispute once it has reached the stage of litigation. The availability of an independent determination promotes reasonable conduct by both parties in the negotiations. But the resolution of, for example, valuation disputes in this Tribunal usually depends upon expert evidence and upon those experts having discharged their obligations to the Tribunal, including the duty to act independently. The public interest in promoting the amicable resolution of disputes does not override the public interest in the proper discharge of an expert’s obligations to the Tribunal. We would add that in the context of disputes about rateable value there is a particular public interest in this Tribunal being able to arrive at decisions based on expert evidence which is entirely independent, because many of those decisions are likely to influence assessments for other properties and thus the liabilities of other ratepayers.
Access to justice
  1. The extent to which conditional fee arrangements are compatible with the proper discharge of an expert witness’s obligation to the Tribunal to act independently and impartially also needs to be considered in the context of access to justice and the “overriding objective” in rule 2(1) of the 2010 Rules.
  2. Rule 2(2) provides that “dealing with a case fairly and justly” includes “(b) avoiding unnecessary formality and seeking flexibility in the proceedings” and “(d) using any special expertise of the Tribunal effectively”. These provisions are not contained in the overriding objective for the Civil Procedure Rules in CPR 1.1. On the other hand, Rule 2(2)(a) of the 2010 Rules refers to “dealing with the case in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties”, a provision which is very similar to CPR 1.1(2)(d).
  3. In order to facilitate access to justice by parties with limited resources, there may be good arguments for the Tribunal to allow conditional fee and other success-related arrangements in, for example, cases allocated to the simplified procedure provided that this is made known to the Tribunal and other parties from the outset and provided, that the expert concerned fully understands and complies with the obligations that he owes to the Tribunal and any relevant professional code of conduct. In such cases, the client would also need to appreciate that the Tribunal could take into account the fact that the expert had entered into a fee arrangement of this type, and therefore had an interest in the outcome of the case, when assessing the weight to be given to his or her evidence.
  4. However, some might contend that financial constraints on access to justice can be addressed by other means. Litigants can make use of the more informal, “no costs” regimes under the simplified and written representations procedures.[10]In other cases, it is possible to apply for costs-capping orders(Johnstonv TAG Farnborough Airport Ltd[2014] UKUT 490 (LC)[2016] RVR 50[2015] JPL 367). In some compensation cases the acquiring authority may make advance payments towards litigation costs reasonably incurred. Alternatively, there may be good arguments for the introduction of a “fixed costs” procedure which uses costs limits (with or without a differential between the costs of the claimant and the respondent). There are examples of this approach in CPR Part 45 (see eg. Aarhus Convention limits for environmental law judicial reviews in CPR 45.41 – 45.44). It might be argued that the availability of these procedures should lead the Tribunal to refuse to accept the provision of expert evidence on a conditional fee basis, or to allow this only where it is shown that access to justice would not otherwise be possible.
  5. Access to justice and the extent to which it should affect the issues raised by Factortam eare matters which need to be considered in this Tribunal in conjunction with users and professional bodies.
Regulating compliance with the obligations of expert witnesses to the Tribunal
  1. The Keen case illustrates why it is so essential that an expert witness declares from the outset whether he, or the practice for which he works, may receive a conditional or other success-related fee.  That information is privy to the expert and his client.  Without it other parties to the litigation and the Tribunal are in the dark. No assessment can be made as to whether the evidence of the expert should be admitted or, where in an exceptional case it is, how much weight, if any, may properly be attached to it.
  2. The duty of an expert under Rule 17(1) “to help the Tribunal” dovetails with the overriding objective in Rule 2. It is, or should be, well-known that the finite resources of courts and tribunals are under great pressure. Those resources must therefore be used carefully.  It is necessary to deal with each case in a manner which is proportionate to (inter alia) its importance and the issues involved. An appropriate share of the Tribunal’s resources will be allocated to a case whilst respecting the need to allocate resources to other cases.  If an expert fails to declare a conditional fee arrangement from the outset of his involvement in proceedings before the Tribunal, there is a clear risk of the resources of other parties and of the Tribunal being wasted. It will not be possible to deal at an early stage with any objection that the expert should not be allowed to act as an expert witness because he lacks the requisite degree of independence for the purposes of Rule 17(1). If the true position becomes known later on, time may be taken up by the Tribunal in having to consider and hear live evidence about the report (along with responses from the opposing party), only for that material to be excluded, or treated as having no weight.
  3. Some relief against these adverse consequences can be provided to other parties in the same litigation by an appropriate award of costs, but that will not address the adverse effects of delay.  More importantly, this remedy would not help conserve the Tribunal’s resources in the interests of all litigants. However, as was pointed out inThe Kingsbridge Pension Fund Trust v Downs[2017] UKUT 237 (LC); [2017] L & TR 31at para. 107, where it is thought that a professional representative or expert may have abused the Tribunal’s procedures, through a serious failure to comply with its Rules or a related breach of a professional code of conduct, then the Tribunal may consider whether any further action should be taken. That may involve requiring a written explanation to be given by the professional concerned, holding a hearing to examine the issues involved, and referring the matter to the relevant professional body for further consideration, whether in relation to an individual case or more generally.  Regrettably it has been necessary to introduce such hearings in the High Court (see eg.R (Hamid) v Secretary of State for the Home Department [2012] EWHC 3070 (Admin)).
  4. More recently, the High Court has emphasised the importance of a solicitor complying with the duty of candour which he or she owes to the court (R (Sathivel) v Secretary of State for the Home Department[2018] 4 WLR 89). Experts owe a similar duty to courts and tribunals. The Hamid procedure, as recently refined in Sathivel,usually involves a requirement that the person responsible for the case explains why an issue should not be referred to a professional body, initially through a witness statement accompanied by a signed statement of truth, providing a “full, candid and frank response” to the issues raised (para. 97).  The court may even refer a matter to a professional body without having previously held a hearing. However, it is not always necessary for a referral to take place. TheHamidprocedure provides an opportunity for the person or practice concerned to put forward an explanation for what occurred, to identify what lessons have been learned and what action has been taken, and to give assurances about steps that will be taken in the future to prevent similar issues arising again. A statement of that nature may satisfy the court in some cases. A similar approach will be applied in this Tribunal.
  5. This Tribunal relies heavily on the independence, diligence, expertise and skill of the wide range of experts who appear before it. The great majority of these experts discharge their obligations to the Tribunal impeccably. Accordingly, use of a Hami dtype procedure should only exceptionally be necessary. However, the availability of this option, does reinforce the importance of all professional representatives and experts complying fully with their obligations to the Tribunal.  Any notion that, by way of example, the inclusion and signing of an expert’s declarations in his or her report is a mere formality, or something which may be dealt with perfunctorily, needs to be completely dispelled.
Codes of Conduct and the Practice Statement of the RICS
  1. In section 8 of his report Mr Clarke made a further declaration in the following terms: –
“I confirm that my report complies with the requirements of RICS – Royal Institution of Chartered Surveyors, as set down in the RICS Practice Statement Surveyors acting as expert witnesses.”
  1. Experts generally include in their reports a declaration that they have complied with the relevant provisions of their own professional code of conduct.  The Tribunal considers this to be essential, and that the declaration must, of course, be correct. An expert must be able to demonstrate if necessary that he has complied with the relevant code of practice. The Tribunal also expects an expert to continue to comply with that code in so far as it may affect the proceedings before it.
  2. If an expert considers there to be a good reason for departing, or for having departed, from the requirements of a code, and that may have a bearing upon the proceedings, the Tribunal would expect the expert to send that justification in writing to the Tribunal and other parties, so as to allow for any consequential case management decisions to be taken.
  3. The fourth edition of the RICS’s “Practice Statement and Guidance Note: Surveyors acting as expert witnesses” was published on 2 April 2014 and came into effect on 2 July 2014.  It was the relevant code applicable to Mr Clarke’s instruction as an expert witness in the appeals to the VTE and to this Tribunal.
  4. Page 4 explains that a Practice Statement “provides members with mandatory requirements under Rule 4 of the Rules of Conduct for members”.  Paragraph 1.2 states that the Practice Statement with which we are concerned does not apply when a surveyor is acting in any capacity other than as an expert witness (see also para. 1.4).  There is a separate Practice Statement entitled “Surveyors acting as advocates.”
  5. Paragraph 1.5 states that where a surveyor acting as an expert witness considers that there are special circumstances making it inappropriate or impractical for the instruction to be undertaken wholly in accordance with the Practice Statement, the fact of and reasons for the departure must, as soon as reasonably practical, be given in writing to the client, and must also be included in any expert witness report (unless the surveyor declines instructions or withdraws from the case).  Before accepting any instruction to act as an expert witness, a surveyor must (inter alia) inform the client in writing “that this practice statement and the rules of the relevant tribunal will apply” and offer to provide the “client guide” version of the Practice Statement (PS 3.4).
  6. PS 5.4(o) and (p) require a surveyor acting as an expert witness to include a signed statement of truth in his or her report and the declarations set out in the Practice Statement.  The declarations contained in section 8 of Mr Clarke’s report, certain of which we have set out in para. 24 above, were in the form specified by the Practice Statement.
  7. PS 10 deals with “conditional fees” in the following terms: –
“10.1 You should not undertake expert witness appointment on any form of conditional or other success-based arrangement including where those instructing you are engaged on such a basis.
10.2 It is inappropriate to be remunerated by way of a conditional fee arrangement when acting as an expert witness but it may be an appropriate fee basis when acting as an advocate.  When acting in a dual role as an expert witness and advocate, where permitted in lower tribunals, a conditional fee arrangement may be acceptable because it will be seen as attached to the role of advocate.  Such a dual role improves access to justice by reducing costs and therefore a conditional fee payment can be supported in these limited and strict circumstances.
10.3 When acting in a dual role and where a conditional fee arrangement has been agreed, this must be declared to the tribunal.
10.4 It is unlikely that a dual role will be permitted in higher tribunal formats and consequently previously agreed conditional fees when the surveyor has appeared in a lower tribunal will, at the point of transferring to the superior or higher tribunal, need to be commuted and replaced by an hourly rate or fixed fee arrangement.”
  1. Generally, the interpretation of the Practice Statement is a matter for the RICS. We did not seek any submissions from the Institution on that issue for the purposes of the hearing. Nonetheless, it is helpful to consider how the Factortame approach sits with the current Practice Statement. Mr Lewsley made submissions on the effect of PS 10.1 and 10.2.
  2. We agree with Mr Lewsley that PS 10.1 plainly prohibits the remuneration of services as an expert witness by any form of conditional or other success-based fee.  However, we do not agree with him that the first sentence of PS 10.2 goes no further than that. The language of PS 10.2 is broader and has the effect that when a surveyor is acting as an expert witness, he may not be remunerated by way of a conditional fee arrangement (i.e. a fee related to the outcome of the proceedings in which he is so acting), whether that fee is for his services as an expert witness or for other services. That interpretation is consistent with para. 1.2 of the Practice Statement and the ambit of the document. It accords with the rationale for the prohibition of conditional fee arrangements in the RICS’s GN 19.1.
  3. This interpretation of PS 10.2 also accords with the approach taken in PS 10.4. This states that even if in a lower tribunal a surveyor had been allowed to act in the dual roles of advocate and expert witness on a conditional fee basis, it is unlikely that he would be allowed to do so in a higher tribunal. Consequently, when proceedings begin in a higher tribunal, the conditional fees previously agreed for the appearance in the lower tribunal, will “need to becommuted and replacedby an hourly rate or fixed-fee arrangement” (emphasis added). Plainly the principle underlying PS10.4 is that it is impermissible for a surveyor to act as an expert witness in a higher tribunal, such as the Lands Chamber, on the basis that he may still be remunerated for other work by reference to the outcome of the case before that tribunal.
Conclusions
  1. We have come to the clear conclusion that the Tribunal should send a copy of this decision to the President of the RICS so that the Institution may consider whether the decision has any implications for its Practice Statement, or more generally, and whether any further steps should be taken in relation to the circumstances of this case.  These are entirely matters for the RICS.
  2. If an expert’s report contains declarations relating to the expert or to the report or its preparation which are materially incorrect, or appears to be in breach of any rule or code of conduct, the Tribunal is likely to refer the matter to that expert’s professional body.  The Tribunal may also consider taking that matter into account when making decisions on orders for costs.