Making sure your expert witness counts

By Frank Bannon and Victor Lau.

Key Points:
Expert witnesses play an important role in assisting courts and parties in the resolution of construction disputes. The admissibility or weight given to expert evidence can be the difference between success or failure, so it's important to understand the detailed requirements.

Expert witnesses are often called upon to assist the court and the parties in construction and engineering disputes. Key areas where experts are often retained include:

• programming
• defective work
• geotechnical
• quantum.

Recent decisions of the Supreme Court of New South Wales have highlighted some of the requirements of the expert witness and expert evidence including the importance of careful selection and preparation of expert witnesses and expert reports.

Failure to select experts with appropriate and relevant expertise and to comply with the requirements for expert evidence could result in a court giving little or no weight to, or even entirely rejecting, expert evidence. This could result in substantial wasted costs and, more importantly, in the difference between success and failure of a claim or a defence.

Role of the expert

An expert witness is not a hired gun who promotes the interests of the party paying him or her. The codes of conduct for expert witnesses in the NSW Supreme Court and the Federal Court provide that an expert witness is not to act as an advocate for a party and has an overriding duty to assist the Court impartially on matters relevant to the expert's area of expertise. Consistent with these principles, the expert witness must identify all of the assumptions on which a report is based, state any qualifications to his or her report and must inform the court and the other party if his or her opinion has changed for any reason.

Expert evidence was rejected by the Court in Commonwealth Development Bank of Australia Pty Ltd v Cassegrain [2002] NSWSC 980, in circumstances where the expert had not been provided with or agreed to be bound by the Code of Conduct for Expert Witnesses as required by Part 36 rule 13C of the NSW Supreme Court Rules. However, the Court has a limited discretion to admit expert evidence in the interests of justice where there has not been exact compliance with Part 36 rule 13C: see Jermen v Shell Company of Australia Ltd [2003] NSWSC 1106. Whether the Court will exercise the discretion will depend upon the nature of the case and the non-compliance with the requirements of Part 36 rule 13C.

Who is an expert?

Unlike witnesses of fact who are generally limited to giving evidence of what they saw, heard or did, expert witnesses are individuals who possess specialised knowledge based on training, study or experience and are entitled to give evidence of their opinions "wholly or substantially based on that knowledge" (Evidence Act 1995 (Cth)).

The case of Stockland (Constructors) Pty Ltd v Darryl I Coombs [2004] NSWSC 323 provides a recent example of the application of these principles. In Stockland the plaintiff sought to adduce "expert" evidence from a member of the Australian Institute of Quantity Surveyors relating to issues concerning programming, structural steel detailing and the professional standards of an architect. The witness had more than 20 years of construction industry experience, including experience in the position of construction manager.

In his judgment Justice Einstein applied the principles of Makita v Sprowles (2001) 52 NSWLR 705 and stated that for an industry practitioner to be recognised by the court as an expert witness, what must be evidenced is the training, the study or the experience, and how it has made the witness an expert in an aspect of the field of the "specialised knowledge".

Despite the witness' extensive experience in the construction industry, Justice Einstein was not satisfied that the witness had demonstrated possession of relevant specialised knowledge in almost all of the fields dealt with in his opinion evidence. Consequently he only admitted the witness' opinion as to whether particular documents were deficient for construction purposes and excluded the balance of his evidence.

Preparation of expert reports

The Stockland judgment usefully reiterated the criteria for admissibility of expert evidence prescribed in Makita.

They are:

• the opinion proffered must be substantially based on the expertise of the witness and the witness must identify it.
• any factual assumptions underlying the witness opinion must be clearly identified and articulated.
• any factual observations made by the witness which underlie the witness' opinion must be clearly identified and articulated, and the observations must have been sufficiently detailed to form a satisfactory basis for the opinion.
• if the witness relies on a combination of factual assumptions and factual observations, they must be identified.
• the witness must explain how the knowledge on which the witness is an expert applies to the facts assumed or observations made so as to produce the opinion propounded.

In Maudsley v Proprietors of Strata Plan Number 39794 [2002] NSWCA 244, Justice Powell applied these principles and found that the expert failed to provide the court with the necessary scientific criteria to enable it to understand and to test the accuracy of the expert's conclusions. The New South Wales Court of Appeal gave little weight to the expert's evidence with the consequence that the appellant was unable to establish a key element of its case.

The requirements for expert evidence set out in Makita and the consequences of non-compliance with them, have led judges actively to encourage the involvement of lawyers in the preparation of expert reports. They should be involved to the extent that they insure the report is in admissible form but not interfering with the opinion expressed. In Harrington-Smith v Western Australia (No 7) [2003] FCA 893 there were 1426 objections to various expert reports which the court estimated would take several days in chambers for rulings to be made. At paragraph 19 Justice Lindgren stated:

"Lawyers should be involved in the writing of reports by experts: not, of course, in relation to the substance of the reports (in particular, in arriving at the opinions to be expressed); but in relation to their form, in order to ensure that the legal tests of admissibility are addressed."

Proof of facts relied upon by the expert

It is important that the facts which the expert assumes in his or her report (and upon which he relies) be proved separately by means of other evidence. A failure to do so will render the opinion evidence unreliable.

In FGT Custodians Pty Ltd v Fagenblat [2003] VSCA 33, the Victorian Court of Appeal examined the opinion evidence of experts on the valuation of the respondent's interest as an outgoing partner of a legal practice. The Court allowed the appeal as it expressed concerns about the weight the trial judge gave to matters asserted to be facts by an expert, which had not been proved separately. The Court of Appeal stated that those facts had to be proved in the ordinary way.

In Skanska Constructions UK Ltd v Egger (Barony) Ltd [2004[ EWHC 1748, an expert was engaged to provide a report that assessed the effect of differential causes of delay on a construction project. The expert produced a lengthy and sophisticated computer generated programming report. Much of the report was produced by the expert's employees who were responsible for the initial analysis of the factual matters upon which the report was based and for data entry. The expert himself did not adequately research and check facts relevant to the report and was not entirely familiar with the detail of the report. To compound this, the report was based on factual data that was not proved by separate evidence at the hearing of the matter. The Court declined to accept the conclusions established by the report on the basis that the data in the report was unreliable. The Court could not "have confidence as to the completeness of quality of the input into this complex and rushed computer project".

Key principles and lessons

The recent cases are a timely reminder of the requirements for admissible expert evidence, and the consequences of failure to comply with them.

Some important practical considerations for ensuring that you have admissible expert evidence are:

1. close analysis of the proposed expert's curriculum vitae, experience and qualifications in light of the issues is required in order to determine whether the proposed expert has the necessary expertise. This should be done at the selection stage by the party retaining the expert rather than allowing the opposing lawyer to test (and usually undermine) them at the hearing
2. the expert must be explicitly made aware of his or her obligations to the court and as an expert. The expert should be shown any relevant code of conduct or guidelines governing expert evidence. If the expert is unfamiliar with the code or guidelines, it may be necessary to explain the requirements. The expert should make it clear in his or her report that, in preparing the report, he or she has complied with any relevant code or guidelines
3. the expert should be provided with all relevant assumptions and documents which he or she is expected to consider. The observations and assumptions underlying the expert report must be proved separately by admissible evidence as facts
4. observations and assumptions relied upon by the expert should be clearly set out in the report and identified as such
5. if persons other than the expert who has been engaged will contribute to the making of the report, the expert must control the preparation of the form and content of the report and have detailed knowledge of the final report. In this regard it is important to remember that the expert opinion must come from a person who is bound by the Code of Conduct
6. a list of any documents considered by the expert should be set out in an appendix to the report
7. the expert report must transparently explain how the knowledge on which the witness is an expert applies to the facts assumed or observations made so as to produce the opinion propounded.

For further information, please contact Frank Bannon.