THE EXPERT THAT DOESN’T GIVE HIS SOURCES (EXCEPT WIKIPEDIA): A PRACTICE DEPRECATED BY THE COURT.
In Engie Fabricom (UK) Ltd v MW High Tech Projects UK Ltd [2020] EWHC 1626 (TCC) Mrs Justice O’Farrell commented on the practice of one of the experts in the case. Failure to follow the basic guidance given in the Practice Direction can lead to difficulties.
“In his report as served, Mr Krangle included information gleaned from Wikipedia and other websites, without referencing the source of such information. This was contrary to paragraph 3.2 of Practice Direction 35, which provides that an expert’s report should make clear which of the facts stated in the report are within the expert’s own knowledge. This breach of duty to the court was exacerbated by his reliance on such information in the opinion section of his report, contrary to paragraph 2.4 of the practice direction which provides that experts should make it clear when a question or issue falls outside their expertise. Such a practice is deprecated by this Court. It is unhelpful and falls short of the high standards expected from experts providing their professional opinion in legal proceedings”
THE CASE
The claimant was attempting to obtain a judgment to enforce an adjudication award. The issue in the case was whether work done at a plant was “power generation” or “waste treatment”. The defendant’s case was that this was work of power generation and, therefore, there was no statutory or contractual right to refer the matter to adjudication.
THE JUDGMENT ON THE EXPERT EVIDENCE
Each party called expert evidence as to the main purpose of the plant.
67. Each party relied on the evidence of an expert. Fabricom’s expert was Judy Henderson, a chartered engineer, and a principal consultant in waste and energy at Royal Haskoning DHV. Ms Henderson’s opinion is that the main purpose and primary activity of the Energy Works Hull plant is the thermal treatment of waste, with power generation being a secondary purpose or ancillary activity. In her report she drew attention to the fact that the local planning authority treated the planning application for the plant as a waste management issue. Further, when granting a permit under the Industrial Emissions Directive (“IED”), the Environment Agency determined that the plant was a waste incineration plant with the thermal treatment of waste as its main purpose. Ms Henderson read the Information Memorandum as presenting the plant to potential investors as a solution to the UK’s waste disposal needs. She cautioned that the references to renewable energy in the publicity materials should be read having regard to the fact that renewables are more acceptable to the public than waste management. Ms Henderson considered that although the EPC Contract contained performance requirements regarding power generation rather than waste treatment, the two are directly related and therefore this was not indicative of the main purpose of the plant. Her view is that the plant is essentially a solution to avoid waste going to landfill and power generation is a secondary or subsidiary activity.
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MW’s expert was Max Krangle, managing director and director of research intelligence at NRG Expert. Mr Krangle’s opinion is that the primary purpose of the plant is the generation of electricity. In his report he derived support for his view from his understanding that RDF is a commodity used to generate electricity; the plant does not have material recovery facilities on site and the MPT undertakes limited treatment of the RDF to improve its quality and size. He considered that the Waste Framework Directive would have applied to the plant regardless whether its primary purpose was power generation or waste treatment and therefore categorisation under the Directive is not of assistance. The plant operates in the deregulated UK electricity market and EWHL is listed at Companies House with SIC Code 35110: “Production of Electricity”. Mr Krangle relied on the fact that (i) the financial model for the plant was based on 74% of the revenues derived from power sales and subsidies, as against 26% derived from gate fees for the RDF, (ii) the plant was eligible for the CfD subsidy and (iii) the ERDF grant was based on its status as a renewable energy plant.
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Fabricom has raised concerns of principle regarding Mr Krangle’s evidence. Mr Krangle is not an engineer and does not profess any expertise in the waste management or energy from waste industries. He is a legally qualified expert in energy pricing. In his report as served, Mr Krangle included information gleaned from Wikipedia and other websites, without referencing the source of such information. This was contrary to paragraph 3.2 of Practice Direction 35, which provides that an expert’s report should make clear which of the facts stated in the report are within the expert’s own knowledge. This breach of duty to the court was exacerbated by his reliance on such information in the opinion section of his report, contrary to paragraph 2.4 of the practice direction which provides that experts should make it clear when a question or issue falls outside their expertise. Such a practice is deprecated by this Court. It is unhelpful and falls short of the high standards expected from experts providing their professional opinion in legal proceedings. I accept that this was not done with the intention of misleading the Court but it could have been avoided easily by following the practice direction. Mr Krangle acknowledged the fault and provided a schedule to his report, identifying the sources of the quotations used. It does not undermine those parts of his opinion that are based on his knowledge of the energy pricing market but it serves to highlight the gaps in Mr Krangle’s expertise in the fields of engineering and waste management.”
WEBINAR ON EXPERTS
On the 29th June I am presenting a webinar on the Perils and Pitfalls of expert evidence. The very point raised in this judgment about using the Practice Direction is a central part of the webina Details of how to book on the webinar are available here.