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Expert Blog

GetSwift Beauty Parade: engaging a single expert witness – does it make you more beautiful?

Phi Finney McDonald will exclusively run the class action against GetSwift, after the two other competing class actions were permanently stayed, as Lee J “was satisfied that the Webb Proceeding was very likely, in most scenarios at all stages of the proceedings, to produce a better return for group members”. [1] The decision hinged on the competitive funding arrangement put forward by Phi Finney McDonald, but also relevant was its openness to the appointment of a costs expert and single court-appointed expert witness. This article will examine the use of single court appointed expert, and answer the question – does it really make your proposal more beautiful?

In the recent decision in Perera v Getswift Limited [2018] FCA 732 (‘GetSwift’), Lee J confronted the significant problems arising out of competing class actions where increased costs and inefficiencies are vexatious to defendants and, on the other hand, present a real challenge for litigation funders where risk may be out or all proportion to any potential reward. [2]

Lee J endorsed the novel solution of Phi Finney McDonald in the appointment of a costs expert to manage the ongoing costs of the litigation. [3] In a multifactorial approach, Lee J also distinguished Phi Finney McDonald for its openness to a single court-appointed expert witness to determine loss causation and the quantum of damages between the parties. [4]

The use of a single court appointed witness is attractive for providing ‘one voice’ before the court, as well as avoiding the perception of bias. This potentially precludes the tedious train of cross-examination, conclave, and supplementary reports which inevitably result from engaging an expert for each side. Use of a single expert witness may also prevent a protracted debate about the technicalities of the expert evidence, which can submerge the real issues. [5]

Prima facie, single expert witnesses therefore appeal to the overriding imperative of the court for the quick, inexpensive, and efficient resolution of matters contained in s 37M of the Federal Court Act 1976, and similar statutes. But does the appeal in the simplicity of a single expert maintain its beauty up close?

Learnings from the Family Court 

Use of single expert witnesses became most prolific in Family Court disputes after the court issued a Discussion Paper in 2002. [6] However, despite the appearance of increased efficiency, this move has also drawn significant criticism.

Among practitioners especially is the perception that a single expert is contrary to the adversarial system. [6] As the Hon. Justice Peter Garling expresses, ‘one of the features of the adversarial process is that a barrister chooses and formulates the questions … and then insist on the expert witness answering the question which may have been carefully formulated to achieve an identified answer’. [7] Where a single expert is appointed, it is undeniable that counsel cede a significant degree of control over the development and outcome of the trial.

Moreover, and from the Court’s perspective, the influence of a confident single expert witness may usurp the decision-making role of the judge. [8] Similarly, an underqualified single expert may make a mistake which cannot be rectified by a proactive opposite number.

Above all, through the appointment of a single expert, ‘parties may incur further costs as they are likely to call their own experts to reduce costs’. [9] This is mainly because parties are rarely prepared to risk a favourable outcome on a single expert. What may begin with the court appointment of a single expert may end with a protracted contest between that expert, and each of the parties’ own subsequently engaged experts, ironically leading to higher costs.

The utilisation of a single expert is best suited to “simple matters” where the evidence is “relatively uncontroversial and…there is no need to sample a range of opinion”. [10] Single experts are often appointed, and are most useful, in non-contentious areas such as property valuation where, for example, the valuation of a painting is determined according to clear criterion, such as its catalogue or recent auction price. Single experts may also be sufficient where a report concerns a matter for measurement (e.g. the noise level at a building site), which is found with the aid of an instrument or scientific method. [11]

It is undeniable that Lee J’s emphasis on a single expert witness is unprecedented in the context of a complex securities class action such as GetSwift.  Hence, the real question in the aftermath of GetSwift is: will the parties really risk loss causation and the quantum of damages on a single expert?

Getswift Analysis – could one expert opinion be the essence of beauty?

Australian courts and practitioners have acknowledged that, in modern litigation, the use of expert evidence “has increased dramatically… both in its frequency and complexity”. [12] The dramatic increase reflects the crucial role of expert evidence in illuminating the technical intricacies of a case, but it may also be attended by an increase in expense, time, and delay.

Lee J’s decision in GetSwift is therefore commendable for its emphasis on cost minimisation. But there is no doubt the single choice of Phi Finney McDonald raises numerous questions for litigators and defendants alike. In particular, whether the court appointment of a single expert really makes a proposal more beautiful?

The two unsuccessful class actions did not accept that there was any scope for a single court-appointed expert. Likewise, although he praised the “novel solution”, Lee J himself acknowledged it was too “premature” to determine whether the proposal for a single court appointed expert should be adopted. [13] Given the nature of forensic economics, and the damages at stake between the parties, it is highly likely that three experts will ultimately be engaged: the court-appointed expert, and one dirty expert for each of the parties. [14]

Moreover, the calculations to determine the substantive liability and loss issues are so complex and multifactorial, that it is common in cases such as this for different expert witnesses to arrive at disparate figures on the quantum of damages. A single expert witness may not be sufficient where ordinarily there might be justified contention over complicated questions of causation and damage. [16]

Hence, not only is it of benefit to the parties to each engage their own experts, but it is also advantageous for courts to hear the multiple opinions on issues which are rightly in dispute. As the Hon. Justice Garry Downes AM has argued “a better result may flow from a diversity of expert opinions”. [17]

Takeaways 

The judgment in Getswift will have far-reaching consequences but it is also fact specific. Lee J has highlighted that “each instance of competing class actions needs to be managed by reference to the bespoke circumstances before the Court” [18]. There is a long and well-recognised history of tension between costs and adversarial litigation in competing shareholder class actions. The novel step of a costs expert to manage ongoing costs is one practical measure that may initially appear attractive.  But the appointment of a single expert opining on loss causation and damages may not be the longed-for solution, if we want to enhance the quality and consistency of outcomes. After all, there is nothing beautiful about a single expert witness if they ultimately lead to protracted litigation.

By Brigitte Samaha

References

[1] [2018] FCA [732] at [329]

[2] Ibid.

[3] Ibid [226].

[4] Ibid [231].

[5] The Honourable Justice Steven Rares, 11 October 2013, ‘Using the “Hot Tub” – How Concurrent Expert Evidence Aids Understanding Issues’, Federal Court of Australia   <http://www.fedcourt.gov.au/digital-law-library/judges-speeches/justice-rares/rares-j-20131012>.

[6] Family Court of Australia, 2002, ‘The Changing Face of the Expert Witness’, Family Court of Australia, Discussion Paper (14) <http://www.familycourt.gov.au/wps/wcm/connect/b81f88e5-d1a9-4d11-a093-b6795a2b9ae3/expertwitness.pdf?MOD=AJPERES&CONVERT_TO=url&CACHEID=ROOTWORKSPACE-b81f88e5-d1a9-4d11-a093-b6795a2b9ae3-lh-paRJ>.

[7] Ibid.

[8] The Honourable Justice Peter Garling, 16 October 2013, ‘Concurrent evidence: perspective of an Australian judge’, Procedural Justice Discussion Group at University of Oxford Faculty of Law (17) <http://www.austlii.edu.au/au/journals/NSWJSchol/2013/36.pdf>.

[9] Family Court of Australia, above no [6].

[10] Ibid.

[11] Ibid at 17-18.

[12] Expert Evidence: The Value of Single or Court-Appointed Experts’ Paper delivered to the Australian Institute of Judicial Administration Expert Evidence Seminar, Melbourne [11 November 2005].

[13] The Hon Geoffrey L Davies, “The Changing Face of Litigation”, (1997) 6 J Jud Admin 179, 188 cited in Rares 2013 at [42].

[14] [2018] FCA 732 [232].

[15]  ‘Direct’ Experts: Ethical Challenges Concerning, and a Comparative Perspective on, the Use of Consulting Experts , St Mary’s Journal on Legal Malpractice & Ethics (2018) (2).

[16] Family Court of Australia, 2002, ‘The Changing Face of the Expert Witness’, Family Court of Australia, Discussion Paper (17-18) <http://www.familycourt.gov.au/wps/wcm/connect/b81f88e5-d1a9-4d11-a093-b6795a2b9ae3/expertwitness.pdf?MOD=AJPERES&CONVERT_TO=url&CACHEID=ROOTWORKSPACE-b81f88e5-d1a9-4d11-a093-b6795a2b9ae3-lh-paRJ>.

[17] Legg, Michael J. Shareholder Class Actions in Australia – the Perfect Storm? [online]. University of New South Wales Law Journal, The, Vol. 31, No. 3, 2008: 669-711 (706).

[18]  The Honourable Justice Garry Downes AM, 11 November 2015, ‘Expert Evidence – the value of single or court appointed experts’ (Page 5), Paper delivered at the Australian Institute of Judicial Administration Expert Evidence Seminar, Melbourne <http://www.aat.gov.au/about-the-aat/engagement/speeches-and-papers/the-honourable-justice-garry-downes-am-former-pre/expert-evidence-the-value-of-single-or-court-appo>.

[19] [2018] FCA 732 [6].

 

  • Lenin Stein

    Really interesting article! Didn’t think I’d enjoy it as much as I did.

  • Francis Buttle

    Doubly interesting to me as a participant in this class action, and as EW elsewhere.