HEATED LANGUAGE AND CAREFULLY CRAFTED WITNESS STATEMENTS: “METAPHORS OF WAR” RARELY (IF EVER) HELP IN LITIGATION

In Alesco Risk Management Services Ltd & Ors v Bishopsgate Insurance Brokers Ltd & Ors [2019] EWHC 2839 (QB) Mr Justice Freedman considered the language used in witness statements.  The heat generated by intemperate language rarely helped the litigants involved.

This is a case where there have been metaphors of war. The parties have either adopted expressions which have been put into their mouths or which they have come to use in oral evidence”

THE CASE

The claim involved a move of a team of insurance brokers between rival firms of insurance brokers.  The claimant succeeded on one point, the majority of the claims were dismissed.

THE JUDGE’S ASSESSMENT OF THE  WITNESS EVIDENCE

 

This makes interesting reading.

    1. This has been an unusually hard-fought case from the perspective of the parties. It is in part of the nature of team move cases between rivals. The nature of the rivalry was likened to joining a rival football team: see Matson 3, [30] and (T6/37/5-9). Either you play for the team, or you are part of the enemy: there is nothing between being liked and loathed. Thus, no sooner had a colleague and friend given notice of termination than the person was vilified and subjected to insult and abuse. It seemed to go with the territory.
    2. This kind of behaviour makes a Court wary in appraising the evidence. It is almost inevitable that evidence about former colleagues will be heavily influenced by this approach to commercial life. It might be the source of conscious or unconscious distortion in respect of how conversations are recalled or other events relating to the movers and those who were engineering the move. In their closing submissions, the Defendants referred to an “esprit de corps” having developed in the course of contemplated and extant proceedings making it difficult, according to them, for the Claimants’ witnesses to give a reliable account of their thinking and conduct at the time. This in turn may infect the retrospective accounts of Departing Employees, their history influenced consciously or unconsciously by what they have learned in these proceedings about the attitudes to them of their former colleagues, particularly in the wake of the resignations.
    3. By reference to extreme language about the Departing Employees prevalent among some of the witnesses for the Claimants, this is borne out. Whilst there was not the same degree of evidence of such language among the Defendants’ witnesses, there is room for concern about the impact of partisanship generally in this case. However much Mr Ross sought to make light of any underlying feelings caused by the 2015 Proceedings, it would be unnatural for that not to have had an effect. The pressure on continuing employees of the respective parties to tow the party lines, whether consciously or unconsciously, has to be taken into account. The way in which the Departing Employees must feel a sense of grievance, whether justified or not, might lead to distortion in their evidence. The result is the need for great caution in looking at the witness statements and the oral examination on all sides in order to appraise the thinking and conduct at the time.
    4. Against this background, the advice given by judges as to the approach to evidence is particularly germane. It is the more dangerous simply to rely on matters of impression of each witness. The need to appraise oral evidence against the background of the written contemporaneous evidence is well established. The most reliable guide will be the contemporaneous documents and the inherent probabilities.
    5. Reference has been made among the well-known cases to the following in particular:
(1) Onassis v Vergottis [1968] 2 Lloyd’s Rep 403, at 431:
“‘Credibility’ involves wider problems than mere ‘demeanour’ which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be … though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so has his memory correctly retained them? Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or overmuch discussion of it with others? … a witness, however, honest, rarely persuades a judge that his present recollection is preferable to that which was taken down in writing immediately after … contemporary documents are always of the utmost importance …”
(2) The Ocean Frost [1985] 3 WLR 640 at 676 per Robert Goff LJ (as he then was):
“it is safer for a judge, before forming a view as to the truth of a particular fact, to look carefully at the probabilities as they emerge from the surrounding circumstances, and to consider the personal motives and interests of the witnesses.”
(3) Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 Comm at [15-24], especially at [22] per Leggatt J (as he then was):
“22. In the light of these considerations, the best approach for a judge to adopt in the trial of a commercial case is, in my view, 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. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.”
    1. In Gestmin, Leggatt J warned about carefully crafted witness statements which sometimes say more about the skill of the lawyers who prepared them than about the witness himself. Further, there is then the problem about the witness statement which was crafted on the basis of moulding a case becoming a part of the story of the well-prepared witness. The statement is almost committed to memory, and its choice phrases become a mantra for even an honest and conscientious witness. The danger of mantras has been identified by the parties in this case.
    2. That is about themes in the evidence where a number of witnesses repeat the same. At its best, the evidence may be corroborative, adding to its weight. At its worst, the evidence may be the result of the very conspiracy which is at the heart of the case. In a team move case in particular, it may be somewhere in between, but no more reliable, that is to say the product of people working together in the preparation of their case and appearing to reinforce recollection, whilst in reality speaking consciously or unconsciously to another’s script.
    3. An example of the foregoing, but chosen as an example only, is the evidence to the effect that the employees were dissatisfied and going to move in any event. Whilst an unsettled workforce might be an indicator that the employees were looking to move in any event, such dissatisfaction might provide the environment where an employer is particularly vulnerable to an unlawful team move. Whilst individual rather than team approaches might indicate that there was no unlawful combination, the Court has to be vigilant about the approaches being stage managed. It is said that different recruitment agents were used for the different employees, but that too might be stage managed to avoid detection. To use the theatre analogy, the vigilance is not only to look at the drama on front stage, but to look carefully at what is going on back-stage and even to consider what is going on off stage away from the eyes of the audience. That is why the cases emphasise looking at the inherent probabilities as they emerge from the surrounding circumstances and the personal motives and interests of the witnesses. All of this is particularly resonant in the instant case.
VI The witnesses
    1. This is a case where there have been metaphors of war. The parties have either adopted expressions which have been put into their mouths or which they have come to use in oral evidence. An example is that Messrs Matson, Clarkson and Thompson have all referred to “sharks” or “blood in the water”, to describe the position after the Departing Employees resigned. The phrase appears nowhere in the contemporary documents.
    2. Another expression adopted by the Claimants has been the word “destabilisation” and similar. That word, and variants of it, appears more than 22 times in the Claimants’ witness statements. It appears more than 15 times in the Claimants’ Closing Submissions. There was a reference to stability on one occasion in contemporaneous documents, but destabilisation and the like do not appear in the contemporary documents.
    3. Whilst the examples are of the Claimants, the carefully crafted statements by the lawyers on all sides frequently were not matched always by the oral evidence. Further, and in any event, there was the overriding feeling that the combination of warring parties and adversarial litigation led to parties entrenched in positions and affecting their recollections and message, and tellingly frequently more so in the written prepared statements than in the oral evidence.
    4. All of this made particularly resonant the approach to oral evidence commended in particular in Gestmin and other cases above. It is in those circumstances that an analysis of the demeanour and broad impressions of each witness is not the central aspect of the fact-finding exercise. Very much subject to that stricture, I shall say a few words about some of the key witnesses.
    5. I found Mr Matson, the CEO of Alesco at the material times, to be a particularly partisan witness who leapt to positions which were unmeasured and who was quick to anger. It may have been a part of the culture, and he may now regret that he used it, but the inflammatory language used by him at the time of the departures of the Departing Employees was all part of the exaggerated reaction to what had occurred. He even referred at the time to their departure as a “terrorist attack”. He leapt to the conclusion that the departure of a number of employees connoted unlawful conduct, he wanted to go to war with Mr Ross and he wanted to “crush” him. Mr Kavanagh in his exchange with Mr Matson said “let’s burn all the f***ers”.
    6. He viewed all the evidence – and the lack of any evidence in support of his suspicions – in that way. Hence his statement cited at greater length elsewhere in this judgment in respect of suspicion of business diverted which he could not prove: “I suspect I have good foundation for my suspicions, I just lack evidence…”.
    7. Knowing that he had to prove a conspiracy, he used the word “orchestrated” 21 times between his witness statements and in cross-examination. In respect of the Burton loan, he has used language such as “bribery”, “corruption”, and “industrial espionage” (T5/37/7-10) about it. He has briefed the press, and caused the matter to be reported to the FCA, who have taken no action. Since Mr Matson has been very much at the heart of this case from the Claimants’ side, it has been necessary to step back from this strong characterisation, as well as being cautious about how much his views have infected his evidence and others on the Claimants’ side.
    8. Mr Byatt was an important witness in view of the alleged impact of his arrival and his actions on Mr Brewins. Mr Brewins’ evidence in this regard was characterised by the Claimants as exaggerated. The core of his evidence was that he could not continue to work with Mr Byatt. Mr Brewins’ account of an abusive meeting with Mr Byatt was broadly accepted by Mr Byatt in cross-examination (reference to Mr Brewins and Mr Sambrook as “the old NMB c***s” (T8/107/4-25) despite the Claimants’ written evidence simply saying that he did not remember exactly what had been said: Byatt 2, [6]). Mr Byatt came over as very sure about himself and as being rather dismissive of Mr Brewins. He presented as obviously ambitious and keen to impress. He had a speedy rise up the ranks, and doing that at the expense of Mr Brewins did not seem to upset him. It is not necessary to be judgmental about that: this was a commercial environment with hard-nosed people. The importance for the case is that seeing Mr Byatt and Mr Brewins give evidence drew attention to the respective characters of the two individuals and assists in connection with the question as to whether Mr Brewins was guilty of exaggeration.
    9. The other witnesses for the Claimants included Mr Payne, partner/managing director of Casualty of Alesco, whose written evidence was rather reduced in cross-examination. This was particularly so about his suggestion that Mr Ross had said that Mr Ross was driving a loaded truck at Gallaghers: as set out below, that statement was taken apart in the course of the case. He gave evidence about an offer of £6 million to him, but there was no evidence to the effect that the Departing Employees were involved in the making of such an offer.
    10. Whilst attempting to further the Claimants’ case, Mr Clarkson in oral evidence did come to accept that Mr Burton’s frustrations were “probably genuine on his part” (T7/4/15). He gave telling answers in cross-examination (a) about Mr Hasan and Mr Maginn having been vocal in complaints, (b) about them feeling like a team on their own, about Mr Maginn having been promised a role and being upset when he did not get it, and (c) that it would not be a surprise for competitors to be seeking to hire the Departing Employees. Mr Thompson, at the material time managing partner (construction and energy) of Alesco, was partisan to the Claimants’ case, and much of his oral evidence maintained that. Mr Chilton’s evidence was not particularly detailed, which may not be surprising in view of his other responsibilities: “I was running the International division of Gallagher’s, and at this time I had been in that role for a couple of years, which was around 7,000 employees globally, of which this was one of those divisions” (T7/152/6-10). The evidence of Messrs Cosgrove (account management partner of Alesco), Crichton (partner energy of Alesco), Barrett (partner Risk Consulting of Alesco). Likewise, the evidence of Ashfield (account management partner for the Corporate Defendants) does not require special mention, albeit that aspects of their evidence will be considered below.
    11. Turning to the evidence of Mr Ross, his evidence was of central importance because, on the Claimants’ case, he was at the centre of the unlawful conspiracy.
    12. I found him to be a particularly intelligent witness. He generally gave his evidence in a measured and analytical way, making sure that he understood the question. An example was at (T11/24/8-17) when it was put to him that he had two versions of a business plan, and he asked whether it was two copies with different annotations rather than two versions, which Mr Mansfield QC had to accept. He had a way of keeping the temperature down and thereby defusing some of the questioning. This shows a high ability, but does not in the end enable the Court to decide on the extent to which his evidence was reliable. I did not accept all of his evidence. In particular, I shall comment below about his evidence in respect of his 3 June 2017 meeting with Mr Matson.
    13. Overall, Mr Ross clearly had an agenda of expansion. He knew that expansion in terms of recruitment of any Alesco employees was likely to cause an aggressive response. He knew that he had to proceed with caution, but at the same time, he had expansionist ideas. I shall appraise whether that was a vendetta against the Claimants arising out of the 2015 Proceedings or for the predominant purpose of advancing the business of the Corporate Defendants.
    14. I now refer to the evidence of Mr Burton. There were many times during his evidence when he came over as clear, fluent and cogent in his evidence. Indeed, this applies to a large part of his evidence but there were other times when his evidence was less satisfactory. He was cross-examined about the loan and he said that this did not influence his decision. Even assuming that the loan was legitimate, the suggestion that it did not influence the decision as to where to go is not credible. It must have affected his willingness to join Bishopsgate. A related point was the difficulty of his evidence that his mind was not settled until a much later stage to join Bishopsgate. His evidence that he had no knowledge about the Departing Employees going to Bishopsgate until August 2017 (or indeed with questions relating to other attempts at recruitment) came over as unlikely to be the case. It was also troubling that he did not understand that Doyle Clayton was acting for him until late July or early August 2017. He has not been able to explain satisfactorily the circumstances in which he withheld information from the Claimants, and, without an explanation, his evidence was defensive and at times unsatisfactory.
    15. Reference is now made to the evidence of Mr Hasan. He is a highly educated person. He is conspicuously clever. He has an extensive vocabulary. He was described in a note of Ms Cooke, the recruitment consultant, as “very well educated smooth type…” and as “very switched on and ambitious”. He was also “apparently VERY well connected” in areas such as Libya, Egypt and Qatar and able to do this via family links/friends.
    16. Nonetheless, there were significant parts of his evidence which were unsatisfactory. His evidence relating to the Business Plans was unsatisfactory, both as regards the RFIB version and the Bishopsgate copy. I formed the view that it was likely that he had greater discussion with Mr Maginn than he accepted to be the case. His attempts to explain how he was not involved in solicitation of customers were particularly poor. The question then arises as to whether these features and other aspects of the evidence (including non-disclosures and information to Alesco as to his intentions) lead to an inference that Mr Hasan was involved in a conspiracy of the kind alleged by the Claimants.
    17. As regards Mr Brewins, his evidence was clear and convincing about the depth of his unhappiness as regards Mr Byatt. He gave evidence about the recruitment being through the Corporate Defendants and in particular Mr Ross and this evidence came over as being plausible. There were other aspects of his evidence which were less convincing including when asked questions by reference to a print-out of what calls he had with Mr Burton. It might have been because it was difficult to recall such calls or because he wished to avoid disclosing any contact with Mr Burton over the period of time.
    18. I found Mr Maginn to be a plain-speaking witness. At (T12/204-207), he frankly admitted that his answers at exit interview had been untruthful as to where he was going, but he explained why he acted in that way. He felt that he was being subject to an interrogation. He said that it was aggressive and went beyond an exit interview. He did not wish to provide the information in those circumstances.
    19. There were other less significant witnesses. Generally, the Corporate Defendants’ witnesses, namely Mr Faraday (head of reward for the Ardonagh group), Ms Walker (then finance director at Bishopsgate) and Mr Baxter (chairman of the Marine, Energy and Natural Resources team at Price Forbes) came over as experienced and conscientious professionals who assisted the Court with their factual evidence. Those attempts as there were to show that they were dishonest were not effective e.g. as regards in respect of the Burton loan: Mr Faraday came over as his own person rather than acting on Mr Ross’s instructions either as regards the loan or his evidence.”