WITNESS STATEMENTS, WITNESS EVIDENCE AND COMPLIANCE: CLAIMANT ORDERED TO FILE COMPLIANT WITNESS STATEMENTS: IT COULD HAVE BEEN THE SOLICITORS NECK ON THE LINE…

We are returning to the judgment of Chief Master Shuman in In IlliquidX Ltd v Altana Wealth Ltd & Ors [2024] EWHC 2191 (Ch). This time looking at the issues relating to witness statements.  There is a detailed consideration of the rules, PD 57 and the consequences of default. In this case the claimant was ordered to file new, compliant, statements.  As the judgment notes there have been cases where non-compliant statements have simply been struck out.  The case is a warning that witness statements must be compliant. Non compliance can be expensive and, in some cases, fatal to the litigant’s case.

“On balance I am satisfied that it is proportionate to order the claimant to rewrite the trial witness statement of Mr Amore and the second trial witness statement of Ms Alabatchka and that these must comply with PD 57AC. To do otherwise would be to dilute the role of the Practice Direction and to undermine its purpose in claims such as this one.”

THE CASE

The action related to the business opportunity of monetising Venezuelan national debt. The claimant alleges breach of contract, breach of confidence, breach of trade secrets and copyright infringement.   Proceedings were issued in July 2020. The case had been subject to extensive amendment of the pleadings and a CCMC had been held in December 2022. The action is listed for trial in the latter part of 2024.

THE ISSUES IN RELATION TO WITNESS STATEMENTS

The defendants argued that several of the claimant’s witness statements were non-compliant with PD 57. They sought an order striking out the witness statements and for the claimant’s solicitor to make a statement explaining how the statements came to be made in the way they were.

THE JUDGE’S DECISION

The Master ordered the claimant to amend and re-serve the witness statements so that they were compliant with PD 57. The application that the claimant’s solicitor make a statement giving an explanation as to how the statement was prepared was refused. (It is worth bearing in mind, however, that this kind of application is being made and may form a part of litigation strategy in the future).

THE JUDGMENT ON WITNESS STATEMENTS

(5) The defendants’ application in respect of trial witness evidence and compliance with practice direction 57 AC

1. 1. The parties exchanged trial witness statements on 6 March 2024.

1. 1. The other part of the defendants’ application was for an extension of time for service of reply evidence in chief pending and following the determination of the application under 57AC. Although there was some disagreement between the parties as to how long that should be, the principle was accepted. An order was made on the papers on 3 May 2024, providing for an extension of one week after the disposal of this part of the defendants’ application, but subject to this period being considered further at the hearing of the substantive applications.

1. 1. The defendants contend that Mr Amore’s witness statement dated 6 March 2024 and Ms Alabatchka’s second witness statement dated 6 March 2024 do not comply with PD 57 AC. They seek an order from the court that the claimant is not entitled to rely on those statements in their current form and requiring the claimant to redraft those statements in accordance with PD 57 AC. In addition they seek an order that the claimant’s solicitor, who signed the certificate of compliance for the statements, should explain the process by which the original statements were prepared and provide information about the extent to which the witness reviewed and selected the documents referred to in the statements and should address the matters set out in paragraph 3.7 of the appendix to PD 57 AC.

1. 1. PD 57 AC was introduced for all Business and Property Court trial witness statements signed on or after 6 April 2021. It was designed to address the increasing problem of trial witness statements being over-long and over-lawyered so that they often no longer reflected the evidence in chief that that witness of fact could realistically give. This problem was acute in well-funded, document heavy business disputes in the Business and Property Courts. As Mr Justice Baker observed in his Implementation Report of the Witness Evidence Working dated 31 July 2020,

“17. Thus, witnesses are too often asked to sign off by way of witness statement a detailed factual narrative that does not resemble the evidence in chief they could or would give, if required to do so without providing a witness statement first, and on which they are therefore exposed to lengthy, detailed cross-examination. This is not fair on the witnesses. Nor is it an efficient or helpful proxy for simple argument as to disputed elements of the factual narrative, by reference to the documents, where in reality the dispute is or should be one for argument and not for witness testimony.”

1. 1. PD 57 AC provides a restatement of the principles applicable to trial witness statements. At paragraph 2,

“2.1 The purpose of a trial witness statement is to set out in writing the evidence in chief that a witness of fact would give if they were allowed to give oral evidence at trial without having provided the statement.

2.2 Trial witness statements are important in informing the parties and the court of the evidence a party intends to rely on at trial. Their use promotes the overriding objective by helping the court to deal with cases justly, efficiently and at proportionate cost, including by helping to put parties on an equal footing, saving time at trial and promoting settlement in advance of trial.

3.1 A trial witness statement must contain only–

(1) evidence as to matters of fact that need to be proved at trial by the evidence of witnesses in relation to one or more of the issues of fact to be decided at trial, and

(2) the evidence as to such matters that the witness would be asked by the relevant party to give, and the witness would be allowed to give, in evidence in chief if they were called to give oral evidence at trial and rule 32.5(2) did not apply.

3.3 A trial witness statement must comply with paragraphs 18.1 and 18.2 of Practice Direction 32, and for that purpose a witness’s own language includes any language in which the witness is sufficiently fluent to give oral evidence (including under cross-examination) if required and is not limited to a witness’s first or native language.”

1. 1. PD 57AD imposes three new requirements on the parties. (1) A list of documents that the witness has referred to or has been referred to for the purposes of providing the evidence set out in their witness statement. Paragraph 3.2 provides that,

“3.2 A trial witness statement must set out only matters of fact of which the witness has personal knowledge that are relevant to the case, and must identify by list what documents, if any, the witness has referred to or been referred to for the purpose of providing the evidence set out in their trial witness statement. The requirement to identify documents the witness has referred to or been referred to does not affect any privilege that may exist in relation to any of those documents.”

1. 1. (2) Confirmation of compliance with PD 57 AC, both by the witness (paragraph 4.1) and by the relevant legal representative (paragraph 4.3). The witness at paragraph 4.1 must specifically confirm the following,

“I understand that the purpose of this witness statement is to set out matters of fact of which I have personal knowledge.

I understand that it is not my function to argue the case, either generally or on particular points, or to take the court through the documents in the case.

This witness statement sets out only my personal knowledge and recollection, in my own words.

On points that I understand to be important in the case, I have stated honestly (a) how well I recall matters and (b) whether my memory has been refreshed by considering documents, if so how and when.

I have not been asked or encouraged by anyone to include in this statement anything that is not my own account, to the best of my ability and recollection, of events I witnessed or matters of which I have personal knowledge.”

1. 1. The legal representative must also sign the statement, paragraph 4.2, confirming that,

“I believe this trial witness statement complies with Practice Direction 57AC and paragraphs 18.1 and 18.2 of Practice Direction 32, and that it has been prepared in accordance with the Statement of Best Practice contained in the Appendix to Practice Direction 57AC.”

1. 1. (3) The trial witness statements should be compiled in accordance with the Statement of Best Practice, set out in Appendix 1 to the Practice Direction, (paragraph 3.4).

1. 1. For the purposes of the application the relevant parts of appendix 1 are,

“2.1 The content of any trial witness statement should be limited to the evidence in chief the relevant party and its legal representatives (if the party is represented) believe the witness would give if …

(2) the principles set out in paragraphs 2.2 to 2.6 were followed.

…

2.3 Factual witnesses give evidence at trials to provide the court with testimony as to matters of which they have personal knowledge, including their recollection of matters they witnessed personally, where such testimony is relevant to issues of fact to be determined at trial, and:

(1) a matter will have been witnessed personally by a witness only if it was experienced by one of their primary senses (sight, hearing, smell, touch or taste), or if it was a matter internal to their mind (for example, what they thought about something at some time in the past or why they took some past decision or action),

(2) for the avoidance of doubt, factual witness testimony may include evidence of things said to a witness, since the witness can testify to the statement made to them, if (a) the fact that the statement was made to the witness is itself relevant to an issue to be determined at trial or (b) the truth of what was said to the witness is relevant to such an issue and the statement made to the witness is to be relied on as hearsay evidence.

2.4 The duty of factual witnesses is to give the court an honest account of matters known personally to them (including, if relevant to the issues in the case, what they recall as to matters witnessed personally by them or what they would or would not have done or thought if the facts, or their understanding of them, had been different). It is improper to put pressure of any kind on a witness to give anything other than their own account, to the best of their ability and recollection, of the matters about which the witness is asked to give evidence.

…

2.6 During evidence in chief given otherwise than by witness statement, the witness’s memory may be refreshed by being shown a document, but only if the witness created or saw the document while the facts evidenced by or referred to in the document were still fresh in their mind, so that they would have known if they were accurate or inaccurate.

…

3.2 Any trial witness statement should be prepared in such a way as to avoid so far as possible any practice that might alter or influence the recollection of the witness other than by refreshment of memory as described in paragraph 2.6 above.

3.3 Trial witness statements should be as concise as possible without omitting anything of significance.

3.4 A trial witness statement should refer to documents, if at all, only where necessary. It will generally not be necessary for a trial witness statement to refer to documents beyond providing a list to comply with paragraph 3.2 of Practice Direction 57AC, unless paragraph 3.7 below applies, or the witness’s evidence is required to:

(1) prove or disprove the content, date or authenticity of the document;

(2) explain that the witness understood a document, or particular words or phrases, in a certain way when sending, receiving or otherwise encountering a document in the past; or

(3) confirm that the witness saw or did not see the document at the relevant time;

but in the case of (1) to (3) above if (and only if) such evidence is relevant. …

3.6 Trial witness statements should not –

(1) quote at any length from any document to which reference is made,

(2) seek to argue the case, either generally or on particular points,

(3) take the court through the documents in the case or set out a narrative derived from the documents, those being matters for argument, or

(4) include commentary on other evidence in the case (either documents or the evidence of other witnesses), that is to say set out matters of belief, opinion or argument about the meaning, effect, relevance or significance of that other evidence (save as set out at paragraph 3.4 above).

3.7 On important disputed matters of fact, a trial witness statement should, if practicable –

(1) state in the witness’s own words how well they recall the matters addressed,

(2) state whether, and if so how and when, the witness’s recollection in relation to those matters has been refreshed by reference to documents, identifying those documents.”

1. 1. As O’Farrell J said in Mansion Place Ltd v Fox Industrial Services Ltd [2021] EWHC 2747 (TCC), at paragraph 37, the purpose of PD 57 AC,

“is to eradicate the improper use of witness statements as vehicles for narrative, commentary and argument”.

1. 1. PD 57 AC, paragraph 5, also provides that the court retains its full powers of case management and the full range of sanctions available to it. Some examples of the sanctions that the court may impose are set out in paragraph 5.2.

1. 1. The claimant was critical of the timing of this application and in any event considers that the defendants have misunderstood the requirements of PD 57 AC. Counsel for the claimant quoting Mellor J in Lifestyle Equities v Royal County of Berkshire Polo Club Ltd [2022] EWHC 1244 at paragraph 98, submitted that applications such as this,

“must not be used as litigation weapons … When assessing how to respond to a breach or a perceived breach of the practice direction a party must exercise common sense and have regard to proportionality. The practice direction is not to be taken as an encouragement to go through witness statements with a fine-tooth comb for the purpose of identifying as many instances of non-compliance as possible for use in trench warfare.”

1. 1. The claimant complains that the defendants should not filet and over analyse the witness statements to find some instances of purported non-compliance. It is said that identifying issues over 31 pages in the schedule to a letter dated 12 April 2024 is oppressive. Whilst over analysis of a trial witness statement for the purposes of PD 57 AC as part of a tactical trial strategy should be deprecated, if trial witness statements fall into the trap of failing to follow best practice, as set out in annex 1 to the practice direction, parties run the risk of applications such as this.

1. 1. Mr Salter KC submits that many of the defendants’ complaints have been abandoned and that there are only now 18 individual examples of purported non-compliance. To an extent the defendants appears to be damned if they assert too many particulars of non-compliance, it is said to be oppressive, against not asserting enough so that the claimant argues it would be disproportionate to apply the sanction sought by the defendants to the entirety of both witness statements. As to the latter Mr Salter KC relied on Primavera Associates Ltd v Hertsmere BC [2022] EWHC 1240 (Ch). A judge had already required the claimant to redraft a trial witness statement, which the defendant still took issue with and sought an order that the revised witness statement be struck out. The claimant relied on this one trial witness statement for a claim alleging that the defendant had been negligent in the planning process for certain developed land owned by the claimant causing loss and damage valued at around £1.7 million. The defendant’s application was framed in a general way in its application notice. The judge emphasised that it is for the defendant to prove that the witness statement does not comply with PD 57 AC and that the appropriate sanction is to strike out the totality of that statement. At paragraph 23, HHJ Paul Matthews sitting as a High Court judge, said,

“But merely calling the specified paragraphs “examples” does not somehow mean that the burden is thereby cast on the claimant in relation to the non-specified paragraphs. The burden is still on the defendant. Showing, for example, that one paragraph in a statement consists of argument does not prove that other paragraphs do as well.”

He went on to strike out 11 paragraphs, or parts thereof, of the witness statement.

1. 1. Mr Salter KC characterises the defendants’ application as making two primary complaints: that the statements take the court through the documents so speculating that the process was document led and further that they are not focused on the pleaded case.

1. 1. He submitted that the practice direction does not change the law about the admissibility of evidence, and it does not stop a witness giving evidence about what they heard, saw and thought when they were present at a particular meeting. That is undoubtedly correct. When I observed that hypothetical conjecture in a witness statement was not helpful for a trial judge though, he referred me to the order that I made on the 7 December 2022. This was an order made in customary CH1 form which simply provided for the parties to serve on the other the witness statement of the oral evidence which they intended to rely on in relation to any issues of fact. He suggested that there was no reason to limit evidence to particular issues because the order did not provide for that. The witness statements must still be relevant, structured to follow the shape of the case set out in the statements of claim, only referring to background where it is necessary for the court to understand the factual matrix. As PD 57 AC confirms the law, a “trial witness statement must contain only evidence as to matters of fact that need to be proved at trial by the evidence of witnesses in relation to one or more of the issues of fact to be decided at trial… and a trial witness statement must set out only matters of fact of which the witness has personal knowledge that are relevant to the case”^[10].

1. 1. Whilst I remain of the view that hypothetical conjecture is not helpful, or indeed strictly admissible, I can see the force of the submission that the witness statements are lengthy because they narrate what happened. Ms Alabatchka and Mr Amore were the ones with first-hand knowledge of the events that this claim is concerned with. Although the revised CH1 form which is used in the Business and Property Courts (Chancery Division) does provide in a document heavy case, for a core bundle of documents with a narrative chronology, for use at the PTR and trial.

1. 1. However the defendants’ complaints go back to the issue that lies at the heart of all these applications, what is the claimant’s case on the business opportunity and detail, and how was it said to be misused.

1. 1. What concerns me about the two trial witness statements is that they should be the oral evidence of the person making them, of direct events, and be tethered to the case that the claimant is advancing at trial.

1. 1. Ms Rao in her second witness statement refers to Mr Amore and Ms Alabatchka’s witness statements as containing 187 and 83 in-line references to disclosure documents. Yet the claimant’s case on the detail pleads only 31 documents. In contrast the defendants’ two witness statements refer to 15 and 42 in-line references to contemporaneous documents, some of which are references to the same document. The claimant decries this analysis and suggests that it is speculative to suggest that the witness statements have been document led. Mr Hemming suggests the numbers give a false impression and that in fact the witnesses only refer to 90 and 60 documents respectively. It is hard to resist the defendants’ conclusion though. For example, paragraph 137 of Mr Amore’s statement refers to refreshing his memory with certain emails, then refreshing his memory with a telephone call, then reviewing emails before adding his thoughts. Whilst this all turns on the question of obtaining legal opinion, and is therefore relevant, the email first referenced is dated 12 August 2019, then he jumps to a telephone call transcript 9 days later and to emails chains in September. It is not clear from the statements how far the evidence reflected what the witness actually remembered of events or simply recalled events from the documents. As counsel for the defendants pithily, but perhaps a little flippantly, observes if the true source of the witness’s recollection are the documents then the trial might as well proceed on the documents, specifically those that are pleaded.

1. 1. I am very cautious about permitting such a forensic critique of the witness statements, and the risk of weaponizing PD 57 AC, but the overall sense one gets when reading these witness statements is that they have been constructed by reference to documents. Of course, a witness can refresh their memory but the documents leading the recollection of events is what PD 57 AC was designed to avoid. Ultimately the court needs the best evidence from the witness, what the witness actually remembers of events, so that it can ascertain the truth through accurate fact finding. As Phipson on Evidence at paragraph 45-01 observes, “the appreciation of evidence involves what can be described as a triangular balancing act between the three concepts of relevancy, admissibility and probative value.”

1. 1. In some parts of the statements the witnesses speculate on what might have been in the mind of the other party. For example, Ms Rao^[11] refers to the following,

“(a) Paragraph 154.1 of Amore 1 (“I was on the one hand struck that the Defendants did not already know what these features of the bonds were, but on the other hand it was not very surprising given their lack of experience in this area”);

(b) Paragraph 154.3 of Amore 1 (“I was not surprised that he did not know these points as he had had no experience in this area”);

(c) Paragraph 73 of Alabatchka 2 (“In order to do that that, we had, to an extent, to walk [Steffen] through the mechanics of things…”);

(d) Paragraph 97 of Alabatchka 2 (“Neither Lee nor Steffen were aware of what sanctions existed or where to find the official basis of the information or documents I was referring to”);

(e) Paragraph 105 of Alabatchka 2 (“He did not have the knowledge in respect of prescription that we did (referred to below))”.

1. 1. Mr Hemming tries to address this in his witness statement, suggesting that the quotes are rather selective. Counsel for the claimant was quite exercised when suggesting that if the court makes an order as sought it will be a finding of improper conduct on the part of the solicitor. It is no such thing, and the defendants do not suggest that it is.

1. 1. I also note it is unhelpful in this case for the parties to be potentially working from unagreed transcripts. Both witness statements refer to a transcript of a telephone call on 4 July 2019, but this transcript has now been revised by the claimant’s solicitors. When the defendants’ solicitors have complained about this Mr Hemming states that they have had the audio since August 2023. That rather misses the point. Ms Rao believes that the telephone call transcripts referred to by Mr Amore in refreshing his memory run to some 199 pages, and those referred to by Ms Alabatchka 88 pages.

1. 1. Mr Hemming’s witness statement criticises the opportunistic nature of the defendants’ application. I do not accept that criticism. The defendants quite properly tried to engage in this issue through correspondence, without success. This is part of the refrain from the defendants about trying to understand the claimant’s core case.

1. 1. I bear in mind the comments of Fancourt J in MacKenzie v Rosenblatt Solicitors [2023] EWHC 331 (Ch) about the importance of ensuring compliance and understanding of PD 57 AC. This was a professional negligence claim against solicitors. When analysing the witness statements and the oral evidence at trial the judge observed that the claimant’s four witness statements were the careful work of a legal team. The defendant understandably had revisited all the documents in the case and may have done so before writing his witness statement. However, his statement failed to identify the documents that were used to prepare the witness statements. The Judge said that the evidence was “of a different character from what is written in his statement.”

1. 1. On balance I am satisfied that it is proportionate to order the claimant to rewrite the trial witness statement of Mr Amore and the second trial witness statement of Ms Alabatchka and that these must comply with PD 57AC. To do otherwise would be to dilute the role of the Practice Direction and to undermine its purpose in claims such as this one.

1. 1. Additionally, the defendants seek an order that Daniel Hemming, the partner who signed both the certificates of compliance, should provide a witness statement setting out information that is focused on the role of documents in the witness statement and the process of preparation. The defendants submit that this is open to the court under its extensive case management powers. Whilst I accept it might be, the court should be reluctant to embroil the solicitor with conduct of the claim into the arena. That is what this order will amount to. I also cannot see the utility in making such an order when I have already directed that the trial witness statements be rewritten.

1. 1. As to timing, both parties have significant teams of lawyers, and in the claimant’s case another firm working on the case as well. It seems to me that 1 week is too short for the defendants to file responsive evidence but if the parties cannot agree the timing I will determine that at the consequentials hearing.