MEMORY IS FLUID AND MALLEABLE: CENTRAL TO THE OUTCOME OF A TRIAL: GESTMIN CONSIDERED AND APPLIED

Another aspect of the judgment in Walsh v Greystone Financial Services Ltd [2019] EWHC 1719 (Ch)  was the trial depended largely on the judge’s assessment of the evidence of the claimant.  There was reference, unsurprisingly, to Gestmin.

“Memory is fluid and malleable, rewritten every time it is retrieved, and vulnerable to many influences including external information and suggestions, the fact that the person concerned has a stake in the outcome or wants to please the listener, and the process of repeatedly going over the same events.”

THE CASE

The claimant brought an action against the defendant alleging negligence in advising him to invest in film companies in the expectation of reducing his liability to pay tax.  The claimant had faced criminal charges over the scheme (but not been convicted) and been involved in numerous hearings. He had, therefore, “relieved” the events many times prior to giving evidence at trial.

THE JUDGMENT ON WITNESS CREDIBILITY

Mr Justice Nugee stated that the claimant’s own evidence was central to the case.

Mr Walsh’s evidence
    1. That makes it essential to evaluate Mr Walsh’s evidence carefully. Indeed the degree of confidence that I can have in his evidence is probably the single most important issue in the trial. It is not therefore surprising that his cross-examination over a number of days formed the bulk of the trial.
    2. In assessing his evidence, there are various factors to be considered. First, Mr Walsh is giving evidence about events that took place a long time ago. The first meeting that he had with Mr Williams-Denton was in June 2003, over 15 years before trial; and the other key events took place between then and 2011, some 8 years before trial. It is unrealistic to expect a person to be able to give accurate accounts of meetings and conversations that took place at that distance in time. But his claims as to the advice he received or did not receive from Mr Williams-Denton turn to quite a degree on matters that are not documented, and depend on the extent to which he can give, or has given, reliable evidence of what was said at such meetings.
    3. Second, this is very far from being the first time he has thought about, or given evidence of, the matters concerned, in particular in relation to the E&W scheme. He has had to give some account of them in the RBS disciplinary proceedings and internal appeal in 2012; in his prepared statement for the criminal investigation in March 2013; in the Employment Tribunal in November 2013; in his Defence Statement in 2014 and the two criminal trials in the spring and autumn of 2015; and of course in the statements of case (and further information) in this action. By the time he came to give his lengthy witness statement for these proceedings, he had therefore been over the same material again and again.
    4. Third, as I have already referred to, this case is critical to Mr Walsh’s financial survival. I was not taken to details of his current financial position, but an account was given by Mr Simon Terry of Coyle White Devine (his solicitors) in November 2018 when opposing Greystone’s application for this trial to be heard together with Mr Edinburgh’s and Mr Elsom’s claims. This was to the effect that as well as the Zodiac demand of c. £750,000 Mr Walsh was expecting to receive further demands in relation to the Aquarius schemes which, together with the Zodiac demand, could amount to more than £1.5m; that he is reliant on the outcome of this trial to settle this liability; and that otherwise he faces bankruptcy, the loss of his current employment and the loss of his home.
    5. I was referred by Mr Hardwick to some comments I recently made about oral evidence in Glenn v Watson [2018] EWHC 2016 (Ch) at [58] as follows:
“Despite the primacy which our trial system has long given to oral evidence, it is by now a commonplace that the memory even of witnesses who are doing their honest best is often unreliable (see Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm) at [15]-[23] per Leggatt J); and in cases of fraud when the credibility of witnesses is in issue, it has long been recognised to be essential to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities (The Ocean Frost [1985] 1 Ll Rep 1, 57 per Robert Goff LJ).”
As is apparent, I was not there claiming to say anything new.
    1. It is however I think worth adding a little on the fallibility of human memory. The entire passage in the judgment of Leggatt J (as he then was) in the Gestmin case referred to repays careful study. It explains how the model we tend to have of human memory as a record of an event that fades over time (but can be retrieved) is fallacious. Memory is fluid and malleable, rewritten every time it is retrieved, and vulnerable to many influences including external information and suggestions, the fact that the person concerned has a stake in the outcome or wants to please the listener, and the process of repeatedly going over the same events.
    2. These considerations mean that the best chance of a person giving an accurate account of an event from memory is if they are asked to state what they recall without having previously been asked to do so, or having gone over it in their mind (and hence preferably as soon after the event as possible); if they have not been exposed to any other information about the event, or had any suggestions made to them by anyone else; and if they have no personal interest in giving any particular account, or any particular understanding of what their listener wants to hear. But as Leggatt J refers to, the processes of civil litigation usually mean that oral evidence given at trial is given under the very antithesis of these conditions.
    3. In Mr Walsh’s case the difficulties are acute. Not only was he being asked about events a long time ago, and has the strongest possible interest in the outcome, but he has been exposed to so much information and gone over the same events so many times that it is difficult now to have confidence in the accuracy of his recollection. As Leggatt J said in Gestmin at [22]:
“the best approach for a judge to adopt … is … to place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts.”
Given the conditions under which Mr Walsh’s evidence was given, that commends itself to me as the correct approach to adopt in relation to Mr Walsh’s evidence.
  1. These are general points. But there are some specific matters that have caused me to be particularly cautious about Mr Walsh’s evidence. In particular, there are a number of instances where Mr Walsh’s evidence appears to have firmed up compared to earlier accounts.