WHEN TWO EXPERTS ARE BETTER THAN ONE: IT MAY BE MORE ART THAN SCIENCE…

Many of the reported cases in relation to the courts and witness experts are about the judge restricting the use of experts.  In Borro Ltd & Ors v Aitken [2021] EWHC 1902 (Ch) HHJ Johns QC (sitting as a High Court Judge) found that separate experts were needed in relating to the valuation of art work.

I am informed that, subsequent to this hearing, the claimant discontinued the action.

“The valuation of the sculptures looks set to be a difficult exercise and/or one with a very significant range of opinion. I would not expect a person also instructed on the basis of their expertise in valuing paintings to be able to give the Court the best help with that exercise. Indeed, an order directing one expert would run the risk of tempting an expert outside his or her area of expertise”

THE CASE

The claimant brought an action alleging breach of duty on the part of the defendant in allowing loans to be given based on security provided of property and art work. The art work consisted of paintings and statues.   It was common ground that expert evidence was required. The issue related to whether two experts were needed to value the art work.

THE JUDGMENT ON EXPERT EVIDENCE

71.              There are two questions for me to decide relating to expert evidence.

72.              The first is in relation to valuation experts. It is common ground that there will need to be expert evidence as to the value of the property on which each of the loans was secured. The parties have agreed directions for evidence from a real property valuer on each side to deal with those loans secured on real property. The Claimants’ proposal is that one other valuation expert on each side deal with all the other loans (albeit with permission to apply). That would involve such expert giving an opinion on each of the paintings used as security but also two sculptures. One loan was secured on a casting from a Degas mould; the mould being made from one of Degas’ original sculptures. Another was secured on an architectural model known as the Tatlin Tower. I was told there are only three such models. The Defendant’s proposal was that there be a paintings valuation expert and a sculpture valuation expert on each side. The latter would value the casting and the tower.

73.              I accept the Defendant’s proposal and so will direct expert valuation evidence from a paintings expert and a sculpture expert. My reasons are these.

74.              One, that seems to me to strike the right balance between the general and the particular. The valuation of the sculptures looks set to be a difficult exercise and/or one with a very significant range of opinion. I would not expect a person also instructed on the basis of their expertise in valuing paintings to be able to give the Court the best help with that exercise. Indeed, an order directing one expert would run the risk of tempting an expert outside his or her area of expertise. In any event, the evidence overall would be likely to be too general. But to direct different experts for each of the two sculptures could well result in evidence reflecting an unnecessarily specific expertise. The Court does not need a treatise on the Tatlin Tower or on Degas castings. But it does need reliable valuation evidence from someone experienced in the market for sculptures.

75.              Two, Mr Scott rightly reminded me of the duty to limit expert evidence to what was reasonably necessary and submitted that the Defendant’s proposal involves a proliferation of experts resulting in additional costs. But the significant point, to my mind, is that the proposal does not really involve extra expert evidence, and so should have only a limited impact on costs. This is not like a case where a further layer of experts is proposed, dealing with the same subject matter. An example of such a case might be both surveyors and structural engineers dealing with the condition of a building. Here, if there is evidence from experts in sculpture valuation, that will mean the other art experts will not report on the value of the sculptures and will not be cross examined on those topics at trial. The proposal is not one for extra expert evidence. It is concerned only with the identity of the experts.     

76.              The second question relating to expert evidence concerns the terms of the order directing evidence from forensic accounting experts. There is agreement that each side should have permission for evidence from a forensic accountant addressing the quantum of the Claimants’ alleged loss. The Defendant proposes that the order for such evidence indicate that the expert should also “opine on the Borro Group’s accounts and loan book during the period material to the claim, including the loan to value ratios of the loan book(s), and the steps taken which ultimately led to the administration of [Borro Group Holdings Ltd]”.

77.              This was not covered in Mr Shapiro’s extensive skeleton but he did seek to justify the proposal, albeit as something of an afterthought, in his oral submissions.

78.              I have decided not to add the proposed words to the order.

79.              An order giving permission for expert evidence can specify the issues for the expert to address – see CPR 35.4(3). Generally, that is done to ensure focus on the issues in dispute which the Court will need expert assistance on. The words proposed to be inserted in the order here would not, it seems to me, do that job. They do not set out clearly defined issues. And they refer to matters which are not, at least not clearly, matters for an expert at all. It cannot, given those points, be said that the matters are ones on which expert evidence is reasonably required. Further, insofar as the experts need to address such matters in order for them to explain their opinion on loss, no doubt those matters will be dealt with in the report.