Sackville, Justice Ronald --- "Expert evidence in the managerial age" (FCA) [2008] FedJSchol 4

1. In 1703, the Court of King’s Bench, presided over by Chief Justice Holt, was confronted with a nice question concerning the status of a promissory note. A purchaser of wine promised to pay the vendor:

The promisee, John Smith, endorsed the note to a third person. That person sued the drawer of the note (not John Smith, the promisee) on the basis that, according to the custom of merchants, the note could be treated as a bill of exchange.

2. The Court was sceptical about the plaintiff’s argument and doubtful about his assertion that the rejection of his claim would cause commercial inconvenience. To clarify the position, Holt CJ did something very sensible:

3. The information provided by the two famous merchants was not, however, cogent enough to persuade the Court that the note should be treated at law as a negotiable bill of exchange. Nonetheless, the Chief Justice evidently thought that there was nothing amiss in obtaining the required information simply by asking people with the necessary expertise to provide it to him. This form of inquiry may not have been consistent with modern notions of procedural fairness, but it was certainly expeditious and cheap and perhaps even reliable.

4. Two centuries later, one of the great American jurists, Judge Learned Hand, wrote a seminal article pointing out that, before the modern trial by jury emerged, courts or other decision-makers obtained the benefit of expert knowledge primarily in two ways. The first was to empanel a special jury of persons especially fitted to judge the facts, a procedure utilised as early as the fourteenth century in trade disputes. Lord Mansfield, a proponent of merchant juries in commercial cases in the latter part of the eighteenth century, explained that:

5. The second procedure was to seek the advice of skilled persons who could advise the court on matters within their field of expertise. In Buller v Crips, the promissory note case, advice was sought and provided informally, outside the courtroom. In even earlier times, courts of admiralty used assessors to sit with the court and provide answers, in private, on technical questions. Indeed, the admiralty courts developed a rule that expert evidence could not be tendered on matters within the expertise of the assessors.

6. The third method of informing the court of technical matters is through the use of expert witnesses who give evidence in open court on matters within their field of expertise. This practice, too, has a venerable history, going back to the fourteenth century when records show that surgeons were summoned to give their expert opinion on such questions as whether wounds sustained by a victim of crime were fresh. As the rules of evidence became more formalised in the eighteenth century, it was finally established that expert evidence constituted an exception to the principle that witnesses cannot give opinion evidence. That exception to the general principle is now embodied in legislation.

7. In modern times, the third method of informing the court is most commonly employed. Courts ordinarily receive information on matters requiring specialised knowledge or training by way of reports and oral evidence from experts called by one or more of the parties. While there are exceptional cases in which the court appoints its own expert or is assisted by an expert assessor, the adversary system has given the parties responsibility for adducing and presenting expert opinion evidence. The role of the court is to evaluate that evidence and, if necessary, to choose between conflicting opinions of the experts. It is this system that is now under siege in the age of managerial judging.

Expert evidence: fertile of inconvenience

8. Interestingly enough, Learned Hand, while acknowledging the historical reasons for the survival of the expert witness, characterised the practice of receiving expert evidence in court as an ‘anomaly fertile of much practical inconvenience’. He saw it as an anomaly because the expert did not give evidence of facts, but of:

The expert, according to Hand, therefore usurps the historical role of the jury (or other fact-finder) to determine the facts. (Hand was concerned with a system in which juries determine facts, even in civil cases.)

9. At a more practical level, Hand identified serious difficulties with the use of expert witnesses. Given the weakness of human nature, so he argued, it is inevitable that the expert ‘becomes a hired champion of one side’. The jury is confronted with diametrically opposed views on issues beyond its competence to resolve. Hand saw the answer in the appointment of an expert or experts to advise the jury in its fact-finding function.

10. In the intervening century, Learned Hand’s misgivings have been amply borne out. Judges, commentators and professional associations (lawyers and non-lawyers alike), not to mention law reformers, have railed against the evils associated with the use of expert evidence in the adversary system. There is a general, if not universal, recognition that the court system has failed to achieve its objective of producing just results without a disproportionate expenditure of time and resources.

11. The problems presented by the use of expert evidence in litigation are well-known and widely documented. They include the following:

Managing Litigation: The Reform Movement

12. The identification by commentators of the problems associated with expert evidence has coincided with the recognition by the courts that they must accept responsibility for managing litigation. The co-called Woolf reforms in England and similar procedural changes in Australia are predicated on the assumption that if conduct of litigation is left entirely or largely in the hands of the parties, the consequences will inevitably include unacceptable delays, undue expense and the waste of substantial public and private resources. The age of the managerial judge has arrived, conferring on courts the duty to ensure, to the extent consistent with the attainment of justice, the speedy and efficient disposition of cases.

13. Judicial reformers have tackled the problems presented by expert evidence as a key element in the case management revolution. A fundamental feature of the reforms has been the conferral of more extensive powers on courts to control the nature and form of expert evidence that can be given in civil proceedings. Lord Woolf identified the objective as being:

To this end, the court was to have complete control over the use of expert evidence. Indeed, no expert evidence was to be adduced at all unless it helped the court. Moreover, no more than one expert in any speciality was to give evidence unless ‘necessary for some real purpose’.

14. The Woolf reforms have been implemented in England. Part 35 of the Civil Procedure Rules provides that it is the duty of an expert to help the court on matters within his or her expertise and that this duty overrides any instructions from the client. No party is permitted to call an expert or put in evidence an expert’s report without the court’s permission. Expert evidence is to be given in written form only, unless the court directs otherwise. An expert may file a written request with the court seeking directions as to the discharge of his or her duty to the court. Where two or more parties wish to submit expert evidence on a particular issue, the court may direct that the evidence on that issue be given by one expert only and, if the parties cannot agree, the court may appoint the expert. The court, in any event, has power to limit the number of experts giving evidence, either generally or in relation to a particular issue. It may also direct the experts at any time to discuss their opinions among themselves, with a view to narrowing the issues in dispute.

15. Implementation of reforms is one thing; effectiveness is another. It is clear, at the very least, however, that the Woolf reforms have brought about major changes in the use of expert evidence in England and Wales, especially in routine cases. The Civil Procedure Rules are supported by a Practice Direction, which fleshes out the general principles. There is also a Code of Guidance on Expert Evidence which, among other things, encourages courts to appoint a single joint expert in uncomplicated cases. An expanding body of case law provides further guidance to courts as to the manner in which they should exercise their powers. The Court of Appeal has made it clear, for example, that even in personal injury cases involving a substantial sum, oral evidence should be taken from experts only as a last resort.

16. Reforms in Australia, while prompted by the same considerations that motivated the Woolf reforms, have taken a somewhat different path. No single jurisdiction has adopted the full panoply of Woolf reforms in one fell swoop. Change has occurred more gradually than in England, although some reforms predated the Woolf proposals and others, such as the practice of experts giving concurrent evidence, were developed by Australian courts or tribunals. Changes have been introduced in three main ways: by practice directions issued by the courts to control the use of expert evidence and to ensure that experts understand their obligations to the court; rules of court establishing new procedures and guidelines for the reception of expert evidence; and judicial decisions refining the principles governing expert evidence, usually insisting on the application of more stringent criteria for the admissibility of such evidence. I refer here only to the first two categories of reform.

17. An example of the first approach is provided by the Federal Court’s Practice Direction: Guidelines for Expert Witnesses in Proceedings in the Federal Court. First issued in 1998, the current Practice Direction makes it clear that the expert has an overriding duty to assist the Court on matters within his or her field of expertise; that the expert is not an advocate for a party; and that the expert’s duty to the Court overrides that owed to the party using the expert’s services. The Practice Direction specifies in some detail the formal requirements with which the expert’s written report must comply. The requirements include a full and clear statement of all assumptions of fact, reasons for each opinion expressed and a record of the instructions given to the expert and of the documents or other materials the expert has been asked to consider.

18. The Practice Direction operates in conjunction with the Federal Court Rules, which confer a variety of powers on the Court. These include powers:

The Federal Court Rules do not, however, prevent parties calling expert evidence without the permission of the Court and make no provision for the appointment of a single expert (except as a court-appointed expert).

19. Other Australian courts have, however, gone further. The Family Court of Australia, for example, has followed the English approach by requiring parties who seek to rely on expert evidence to apply to the court for permission to do so. The primary objects of the rule are to restrict expert evidence to what is necessary to resolve significant issues in the case and:

Unlike the Federal Court, the Family Court deals only with one kind of case, although family disputes can vary considerably in complexity and in the resources available to the parties.

20. In proceedings in the Supreme Court of Queensland, unless the court orders otherwise, a single expert, whether appointed by the parties or by the court, is to be the only expert to give evidence in the proceedings. Thus, although the parties do not require permission of the Court to call expert evidence, they are restricted to a single expert unless the court determines that the case justifies an alternative course. Moreover, the court has power, on its own initiative, to appoint an expert to prepare a report in a substantial issue in the proceedings.

21. The New South Wales Uniform Civil Procedure Rules are intended ‘to ensure that the court has control over the giving of expert evidence’. The UCPR (NSW) do not prohibit a party from calling expert evidence without permission of the Court. However, the Rules require a party intending to adduce expert evidence, or to whom it becomes apparent that another party may adduce expert evidence, to seek directions from the Court promptly. Expert evidence is not to be adduced until the Court has given directions and is to be given only in accordance with the directions. The Court has broad powers in relation to expert evidence, including a power to appoint its own expert to inquire into and report on an issue in the proceedings. The Court may direct, among other things, that expert evidence not be adduced on specific issues; that the parties instruct a single expert in relation to a particular issue; that the experts confer prior to giving evidence with a view to preparing a joint report; and that they give evidence concurrently.

22. It is difficult to measure the impact of court-initiated reforms of the principles and practices relating to expert evidence, at least without elaborate and carefully designed empirical studies. Perhaps not surprisingly, in Australia there appear to have been no detailed empirical research attempting to assess the costs and benefits both to litigants and the court system of the reforms effected variously by practice directions, rules of court and judicial decisions. It is not possible, therefore, to be dogmatic about the success of measures designed to curtail, if not eliminate, the generally acknowledged problems with expert evidence such as bias, duplication of reports and testimony, excessive costs, and delays and selectivity in the presentation of expert opinions.

23. Nonetheless, it is plausible to suggest that the reforms are likely to be effective in curtailing the excesses associated with the use of expert evidence in what might be described (without condescension) as routine or standard cases. It should be feasible for courts to impose and monitor stringent requirements, such as directing a single expert to report on particular issues or making orders limiting the scope and nature of expert evidence, in particular categories of standard cases. These include personal injury litigation, building and construction disputes, family law proceedings and medical negligence claims. Judges regularly hearing cases of a similar nature should rapidly become sufficiently familiar with recurring issues to utilise their newly acquired powers confidently and vigorously. Thus, even though the changes effected in Australian jurisdictions have generally not been as sweeping as the Woolf reforms, they should have a very marked impact on the conduct of routine categories of litigation.

24. The more formidable and intractable challenge for courts is created by mega-litigation and other large-scale litigation. I have used the term ‘mega-litigation’ to describe:

Mega-litigation is not the only form of large-scale litigation, but it starkly presents the difficulties confronting the courts.

25. One of the characteristics of mega-litigation is that it almost invariably involves elaborate expert evidence, the reception of which frequently plays a substantial and, indeed, disproportionate part in the proceedings. The evidence may relate to complex technical or scientific issues, for example, in intellectual property cases or product liability claims. Mega-litigation can also give rise to disputed economic issues, such as the definition of markets in competition cases. The relief sought by the plaintiff or applicant, particularly large damages claims, frequently generates detailed and sophisticated (or apparently sophisticated) reports from accountants or financial or industry experts.

26. Mega-litigation and other forms of large-scale litigation are on the increase. There are many reasons for this phenomenon. They include the greater sophistication and complexity of commercial transactions; ever more exquisite technological advances that can be understood only by specialists; the sheer size of multi-national or even local corporations whose disputes involve very high stakes indeed; the uncertainties created by the search for ‘individualised justice’; and procedural innovations, such as class actions, that are designed to improve access to justice but often generate large-scale litigation.

27. The challenges facing the courts in managing mega-litigation (or other large-scale litigation) are very much more formidable than those presented by standard litigation. While the widespread acceptance of the principle of judicial self-governance and the related concept of case management have transformed the judicial role, they have not ensured that courts exercise effective control over mega-litigation. In particular, they have not ensured that the problems presented by extensive reliance on expert evidence have been satisfactorily addressed.

28. This is not because the need for judicial supervision of mega-litigation, including the parties’ reliance on expert evidence, is any less than in relation to routine litigation. On the contrary, the evils identified by Learned Hand and subsequent commentators are just as apparent in large scale litigation, if not more so, than in less complex disputes. Indeed, the problems have been exacerbated by several readily apparent trends in large-scale litigation.

29. First, legal practitioners often assume that if apparently reputable experts can be found who are prepared to express an opinion that seems to advance the client’s interests, it is imperative to adduce evidence to that effect. Whether the forensic decision is made on the basis of considered belief that the material is probative of the issues in dispute, or simply because of a fear that some litigious stone that may remain unturned, enthusiasm for expert evidence of dubious worth seems to be endemic to modern litigation. On occasions, lawyers may even defer to experts in devising a litigious strategy, not always with a beneficial outcome. Nor is it uncommon for detailed (and presumably expensive) ‘expert’ reports to be prepared on behalf of a party, yet for that party’s tender of the reports to be rejected on the ground that the author has not demonstrated that his or her opinions are based on relevant specialised knowledge.

30. Secondly, there is a tendency in large-scale litigation for each well-resourced party to support its case by relying on reports from two or more experts covering much the same ground. In multi-party litigation, each party may insist on tendering its own expert report even though they seem to have a substantially common interest in the proceedings, at least on the relevant issues. In the C7 Case, for example, the various parties tendered substantial reports (sometimes more than one) from five experts on market definition issues. Despite concerns expressed from the bench as to the apparent duplication involved, parties insisted that they would be prejudiced if they were not permitted to follow their chosen course.

31. Thirdly, the over-reliance on expert evidence often produces a very large – sometimes staggering – number of individual objections to the admissibility of portions of reports. In the Wongatha native title litigation, for example, 1426 individual objections were made in relation to 30 separate expert reports. A judge faced with the need to give rulings on this volume of objections must develop strategies to render the task manageable. Even so, rulings on admissibility may occupy significant amounts of court time.

Towards More Stringent Controls

32. It might be thought that the courts are well-placed to curb the excesses associated with the over reliance on expert evidence in mega-litigation. The powers conferred on courts to limit expert evidence, for example, would seem to be ample to prevent unnecessary duplication or wasteful expenditure on reports of dubious value. In fact, it can be surprisingly difficult for the courts to exercise their powers effectively. The parties to mega-litigation are not only extremely well-resourced, but are not necessarily disposed to co-operate with each other or the court to ensure that the expenditure of time, money and effort is proportionate to what is at stake in the proceedings.

33. The fundamental difficulty facing a court in seeking to exercise stringent control over the use of expert evidence in mega-litigation is the information deficit. Even in a system of case management, in which the trial judge manages the litigation from commencement until trial, the most diligent judge cannot know in advance of the hearing anything like as much about a party’s case as that party’s legal representatives. The judge may have serious doubts, for example, about the utility of expert evidence the parties intend to adduce, but if a ruling preventing the parties from relying on the evidence they consider important may be thought to imperil a fair trial. Bearing in mind that a trial judge is bound not to compromise his or her independence and impartiality, a considerable degree of caution is usually required before overriding the parties’ own assessment of the evidence needed to support their respective contentions.

34. If the procedural reforms relating to expert evidence are to have their intended effect in relation to mega-litigation and other large-scale civil proceedings, the judiciary will have to be prepared to adopt even more rigorous and interventionist pre-trial case management strategies. To minimise the likelihood of successful challenges to the exercise of powers by trial judges, judges require explicit statutory authority to curtail and regulate the use of expert evidence in mega-litigation, even over the express opposition of one or more of the parties. The powers should be exercised so as to ensure that the projected costs, not merely in terms of direct expense but in court time and delay in finalising the proceedings, are proportionate to the relief sought. The powers should also be designed to avoid the courts and the judicial system being subjected to undue burdens, to the detriment of the general body of litigants.

35. This proposal implies that the traditional role of the judge in adversary litigation will require further modification. Effective control over the use of expert evidence in large-scale litigation is likely to involve the managing judge expressing views about the apparent strength, cogency or utility of the evidence a party proposes to adduce. A decision not to permit a party to pursue its preferred course in the litigation may have, or be said to have, important consequences for the presentation of that party’s case. Greater leeway may have to be granted to the judge to allow him or her to exercise the court’s powers without transgressing the borders of permissible pre-judgment of the merits of a case. Appellate courts will need to be supportive of the procedural decisions taken by trial judges in relation to expert evidence if the reforms are to be effective in limiting the burdens placed on the court system by large-scale litigation.

Conclusion

36. Case management is an integral element of the responsibilities of the judiciary in modern times. It is no coincidence that the managerial age has brought about sweeping changes in the role and functions of expert witnesses. One of the forces driving the judicial embrace of case management has been concern at the evils associated with the uncontrolled use of expert evidence in civil proceedings. As the comments of Judge Learned Hand demonstrate, there is nothing new about this concern. What is new is the willingness and ability to address the problem

37. It is incumbent on anyone who holds himself or herself out as willing to give evidence as an expert, or who is asked to prepare expert reports in connection with litigation, to understand the changes that have taken place. This implies, of course, familiarity and compliance with the duties of experts spelled out in legislation, rules of court and practice directions. But it also implies an understanding of why the changes have come about and what the courts and those concerned with judicial administration are trying to achieve. Only then will experts be able to discharge the more onerous functions legitimately expected of them.

Although the position was soon changed by statute: id, at 30, note (d); 794.

L Hand, ‘Historical and Practical Considerations Regarding Expert Testimony’ 15 Harv L Rev 40 (1901). At the time he wrote this article, Hand was a young lawyer practising in Albany, New York.

For a brief history of what the New South Wales Law Reform Commission describes as ‘Expert Juries’, see NSW Law Reform Commission, Expert Witnesses (Report No 109, 2005), 2.3-2.9.

Lewis v Rucker [1761] EngR 46; (1761) 2 Burr 1167, 1168; 97 ER 709, 770, cited by the NSW Law Reform Commission, note 5 above, 2.5.

NSW Law Reform Commission, note 5 above, 2.10-2.16.

See, for example, Evidence Act 1995 (Cth), s 79.

See, for example, Access to Justice (Final Report) (1996) (‘Woolf Report’), ch 13; I Freckelton, P Reddy and H Selby, Australian Judicial Perspectives on Expert Evidence: An Empirical Study (AIJA, 1999); H D Sperling, ‘Expert Evidence: The Problem of Bias and Other Things’ (2000) 4 TJR 429. P McLellan, ‘Expert Evidence: Ace Up Your Sleeve?’, Address to the Annual Conference of the Industrial Relations Commission of New South Wales, 20 October 2006.

R Sackville, ‘From Access to Justice to Managing Justice: The Transformation of the Judicial Role’ (2002) 12 JJA 5; R Sackville, ‘Courts in Transition: An Australian View’ [2003] NZLR 185, 197-205.

For a brief survey, see NSW Law Reform Commission, note 5 above, pars 4.2-4.26.

CPR, r 35.3 The Practice Direction to CPR, Part 35, expands on the duties of the expert.

CPR, r 35.5. Subject to restrictions, a party may put written questions to an expert instructed by another party: r 35.6.

Daniels v Walker [2000] EWCA Civ 508; [2000] 1 WLR 1382, 1388, per Lord Woolf MR. For a survey of the authorities, see NSW Law Reform Commission, note 5 above, 4.19-4.26.

The Australian Competition Tribunal pioneered the ‘hot tub’ approach to expert economic evidence. The practice, better described as concurrent evidence, is now widespread in a number of Australian courts.

Family Law Rules 2004 (Cth) (‘FLR’), r 15.51. For an overview, see NSW Law Reform Commission, note 5 above, pars 4.52-4.68.

Uniform Civil Procedure Rules 1999 (Qld) (‘UCPRQ’), rr 429H(6), 429N(2).

Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR (NSW’)) r 31.17. The UCPR (NSW) now incorporate recommendations made by the NSW Law Reform Commission. However, the UCPR (NSW) do not implement the recommendation that a party to civil proceedings not be permitted to adduce expert evidence without the court’s permission: NSW Law Reform Commission, note 5, above, 6.7-6.11.

The Administrative Appeals Tribunal has undertaken ‘An Evaluation of the Use of Concurrent Evidence in the Administrative Appeals Tribunal’ (November 2005). The evaluation was based largely on a survey of members of the Tribunal and found a high degree of satisfaction among members with the use of concurrent evidence. See, too, I Freckelton, P Reddy and H Selby, note 13 above; Australian Magistrates’ Perspectives On Expert Evidence: A Comparative Study (AIJA, 2001).

Seven Network Ltd v News Ltd [2007] FCA 1062 (‘C7 Case’), [1].

R Sackville, ‘Mega-Litigation: Towards a New Approach’ (Annual Conference of the Supreme Court of New South Wales, 17-19 August 2007), [7]-[12].

R Sackville, ‘From Access to Justice to Managing Justice: The Transformation of the Judicial Role’ , note 17 above.

See Jango v Northern Territory (2006) 152 FCR 150, 241-242, [322]-[326].

See, for example, Seven Network Ltd v News Ltd (No 14) [2006] FCA 500; Seven Network Ltd v News Ltd (No 15) [2006] FCA 515.

Harrington-Smith v Western Australia (No 7) [2003] FCA 893. In Jango v Northern Territory (No 2) [2004] FCA 1004, the respondents made 1100 separate objections to two anthropological reports.

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