PARTY NOT PERMITTED TO ADDUCE EXPERT EVIDENCE FROM OTHER CASES AS HEARSAY EVIDENCE

One of the issues decided by Mr Justice Mellor in Crypto Open Patent Alliance v Wright [2023] EWHC 2408 (Ch) related to the attempts by a party (COPA) to adduce expert evidence from other trials by way of hearsay evidence in the current action.  The court held that it had a discretion as to whether such evidence could admitted. On the facts of this case it did not allow the evidence to be introduced.

 

Overall, COPA’s invitation to allow the hearsay notice to stand, leaving the weight to be given to the 7 additional expert’s reports to trial, ducks the issue. In all the circumstances of this case, I consider the nettle ought to be grasped now and discarded.”

THE CASE

The parties, The Crypto Open Patent Alliance and Dr Wright (and many others) are involved in litigation relating to who was the creator of Bitcoin. The judge was considering a number of interlocutory applications.  One of the issues related to COPA’s service of a hearsay notice containing reports from experts in other cases where Mr Wright was involved as a litigant.  Dr Wright objected to the evidence being adduced.

THE EVIDENCE ON THE APPLICATION TO EXCLUDE THE HEARSAY EVIDENCE

The judge excluded the hearsay evidence.  The court had a discretion on this issue and, on the facts of this case, the admission of the evidence was the appropriate course of action.

 

Mr Wright’s Application to exclude hearsay evidence

    1. The relevant background to this application may be summarised as follows:
i) The CCMC Order granted Dr Wright and COPA permission to adduce expert evidence in the field of forensic document analysis, such permission being expressly “limited to one expert per party“.
ii) Following the June 2023 CMC, I ordered COPA to serve its expert report on forensic document analysis by 25 August 2023, the deadline being subsequently amended (following an extension request by COPA) to 1pm on 4 September 2023. At the June 2023 CMC, no mention was made of the subsequent hearsay notice.
iii) On 28 July 2023, COPA served a hearsay notice giving notice of its intention to rely on (i) the Edman reports, comprising two affidavits and four expert reports of Dr Matthew J. Edman and (ii) the KPMG report. The Edman reports and the KPMG report are expert reports in forensic document analysis, which were adduced in other proceedings (the Kleiman litigation in Florida and the Granath v Wright litigation in Oslo respectively). I was only shown one Edman report (his second supplemental report of 28 pages in which he analysed some 18 documents), but the KPMG report is a dense document of 224 pages, including detailed appendices analysing the metadata and content of some 12 documents.
iv) On 1 September 2023, COPA served its expert report on forensic document analysis in these proceedings, namely the report of Mr Patrick Madden (the “Madden Report“). Although I was only shown extracts from Mr Madden’s report, I was told it comprises over 900 pages including various appendices which set out detailed analysis.
    1. As Dr Wright submitted, the upshot of this is that COPA intends to rely at trial on expert evidence from no less than three experts in the same discipline (albeit that in respect of two of these experts it seeks to do so by way of hearsay). COPA confirmed in correspondence that it intends to rely on the Edman reports and the KPMG report “for the truth of the matters stated by the experts and their reasoning. We acknowledge that these reports are likely to be primarily relevant insofar as they align with and corroborate the conclusions of COPA’s forensic documents expert in these proceedings“.
    1. In its evidence on this application in Sherell 14, the justification for this course was:
‘To be clear, it [COPA] will rely upon those reports only in relation to documents addressed also in Mr Madden’s report. It wishes to do so for two purposes. First, to prove the fact that these documents have previously been found to be manipulated. Accordingly, if Dr Wright were to say in evidence that, if informed at an earlier point in time, he could have provided more information or supporting material to justify these documents, it can be put to him that they have been considered in earlier proceedings and found by experts to have been altered. Dr Wright has disclosed documents (and in some cases actively placed reliance on documents) which were previously said to have been tampered with and therefore he did so in knowledge of that fact; Dr Wright should not be allowed to plead ignorance on this matter. Secondly, to demonstrate that other skilled forensic document examiners have reached conclusions in line with those of Mr Madden. Thus, for example, any suggestion against Mr Madden that he had not adopted proper methods or had not handled the documents correctly could be met with the answer that other competent experts had used equivalent methods and reached equivalent conclusions.’
Applicable Principles
    1. In the end there was no dispute as to the legal principles, which can be gleaned from Rogers v Hoyle [2015] QB 265, Mondial Assistance (UK) Ltd v Bridgewater Properties Ltd [2016] EWHC 3494 (Ch), Illumina, Inc v TD Genetics Ltd [2019] FSR 35; and MAD Atelier International BV v Manes [2021] 1 WLR 5294. COPA expressed them as follows:
i) First, a party is entitled to serve under a hearsay notice a report or other document providing expert or other opinion evidence, and the Court will give appropriate weight to it (applying s.4 of the Civil Evidence Act 1995).
ii) Secondly, the admissibility of pre-existing expert reports served in this way is not governed by CPR Part 35, since that Part only governs reports commissioned for the proceedings in question.
iii) Thirdly, the Court has a discretion under CPR 32.1 to exclude hearsay evidence (e.g. on the basis that it would be duplicative or give rise to disproportionate cost). COPA nonetheless submitted that the starting-point is that hearsay evidence is admissible and relied in particular on what Nugee J. (as he then was) said in Mondial at para. 22:

“22. The consequence of the judgment is that there is, as it seems to me, a sharp divide between opinion hearsay evidence which is adduced in circumstances where Part 35 does not apply because the evidence is not the evidence of an expert within the meaning of 35.2(1) and opinion expert evidence which is sought to be adduced where the person giving the evidence is an expert within 35.2(1). In relation to the former, because Part 35 does not apply, there is no requirement to obtain the permission of the court. The evidence is prima facie admissible under a combination of the 1972 Act and the 1995 Act, as I have explained. Being prima facie admissible, although the Court has a discretion, as it does with all evidence, to exclude it under 32.1(2) (“the court may use its power under this rule to exclude evidence that would otherwise be admissible”) the general position is that the Court should be slow to exclude evidence that is admissible, leaving objections to the evidence to be given effect to by affecting the weight to be given by the evidence (see the decisions of David Richards J in Daltel Europe Limited v Makki [2005] EWHC 749 Ch and of Norris J in First Subsea Limited v Balltec Limited [2013] EWHC 1033 (Pat) At paragraph [56] of Daltel [2005] EWHC 749 , David Richards J said:

“Part 32.1(2) is primarily a case management power. It enables the court to exclude evidence so as, for example, to confine it to particular issues or to control the proliferation of evidence on an issue where significant evidence has already been adduced and the addition of further evidence would involve a disproportionate use of the parties and the court’s resources In Post Office Counters Limited v Mahida [2003] EWCA Civ 1583 at para [24], Hale LJ said:

“The power of the Civil Procedure Rules to exclude evidence even if it is admissible is principally a case management power designed to allow the court to stop cases getting out of hand and the hearing becoming interminable because more and more admissible evidence, especially hearsay evidence, is sought to be adduced.”

David Richards J continues:

“No doubt the power to exclude evidence may be used for other purposes which are not connected with case management, for example, to ensure compliance with the European Convention on Human Rights. However, in the light of the approach adopted by the Civil Evidence Act 1995 , it seems to me it would rarely be a proper use of the power under Part 32.1(2) to exclude hearsay evidence which was relevant to the issues for decision on the ground that it was hearsay.”

    1. In oral argument, attention focussed on the judgment of Henry Carr J. in Illumina. In that case, the claimant patentee, Illumina, sought to rely by way of a hearsay notice on certain paragraphs of an expert’s report from a Dr Erlich concerned with common general knowledge which had been served in earlier proceedings. Illumina argued that the defendant had adopted those paragraphs as part of their case in the earlier proceedings but advanced a contrary case in the present proceedings. The defendant argued that the hearsay notice was inadmissible as Illumina did not have permission to adduce such evidence under CPR Part 35. Naturally, this argument was rejected – see the second point above. Henry Carr J. continued:
’27 This does not mean that the court is powerless to exclude expert evidence in appropriate cases and parties should not assume that they have carte blanche to rely upon whatever evidence they wish under hearsay notices, which has been adduced in previous proceedings. For example, if evidence is duplicative of evidence that is already being adduced by one of the parties, the court may take the view that is it appropriate to exclude it under CPR Pt 32.1. When exercising that power, the court will have regard to the overriding objective, and in particular whether its admission will give rise to disproportionate cost. This is supported by the authors of Phipson on Evidence (19th edn), who make the following observation on the judgment in Rogers v Hoyle [2014] EWCA Civ 257 at [29.16]:

“‘Although correct in terms of s.1 of the Civil Evidence Act 1995, the court did not consider the factors that might then need to be balanced in terms of the overriding objective of the Civil Procedure Rules (revised from 1 April 2013), that cases should be dealt with not only justly but also at proportionate cost. On the one hand, it might be said that the report reduces considerably the cost of litigation, by providing a ready-made report by an independent set of experts; that seems to have been the view taken by the Court of Appeal. On the other hand, unless the party introducing the report also produces its authors, and potentially the witnesses cited therein, to give evidence, the report is unlikely to fare well at the hands of s.4(2) of the Act in terms of weight, and thus the question arises whether a document of little evidential weight should be admitted when it will take considerable effort and cost to assess….'”‘

    1. Henry Carr J.’s ultimate conclusion was that permission to rely on the specified paragraphs of Dr Erlich’s report was not required. His conclusion was based in part on a finding that the hearsay notice would not result in disproportionate cost because the relevant paragraphs could be put in cross-examination even in the absence of a hearsay notice.
    1. Finally, I make the obvious point that each case turns on its own particular facts, as is readily apparent from the cited cases.
Decision
    1. At the conclusion of the hearing, I announced that I would exclude the evidence sought to be adduced by COPA via this hearsay notice, having reached a clear view. My reasons for so concluding are in summary as follows:
i) Although the hearsay notice did not say this, COPA only sought to rely on passages which dealt with the same documents as in Mr Madden’s Report. The hearsay evidence would therefore be wholly duplicative.
ii) I formed the view that the admission of these 7 further expert reports would result in disproportionate cost. Even if it turns out at trial that COPA did not find it necessary to refer to them, the respective teams would still have to consider their content and correlate the findings to the Madden Report.
iii) It is apparent there would be additional practical difficulties which would almost certainly result in further evidence being required. As I observed in argument, how could one tell whether the document referred to in the KMPG report as ‘Bilag 30’ was exactly the same document as one referred to by Mr Madden in his report. Counsel said one could tell by looking at the MD5 hash for each document, but at the very least, it would be necessary to prepare and agree a correspondence table between the evidence of all three experts.
iv) The trial already appears to be heavy, with over 30 witnesses and large volumes of material, including the 970 pages of Mr Madden’s first report. I cannot understand how the trial judge (likely to be me) is going to benefit from having another 7 expert’s reports where the only relevant material is accepted to be entirely duplicative.
v) As to the two reasons put forward by Mr Sherell in his evidence (both of which I note are speculative), the first does not hold water because, if the occasion arose, Counsel could put extracts from the Edman and KPMG reports in cross-examination; the second carries no weight, because the issue of correct methods can be resolved through the evidence of the instructed experts.
vi) COPA submitted that there would be no unfairness to Dr Wright because his expert would only need to address the documents considered by Mr Madden. I found this submission disingenuous. If the Edman and KPMG reports remained in evidence, Dr Wright’s expert and his legal team would have to consider them.
vii) Overall, COPA’s invitation to allow the hearsay notice to stand, leaving the weight to be given to the 7 additional expert’s reports to trial, ducks the issue. In all the circumstances of this case, I consider the nettle ought to be grasped now and discarded.
viii) Accordingly, I allow Dr Wright’s application to exclude COPA’s second amended hearsay notice relating to the expert reports of Dr Edman and KPMG.