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Expert Blog

The Scope of Admissible Lawyer-Expert Communications

Whilst courts are empowered to exclude prejudiced expert reports, parties may nonetheless advise experts on proper reporting practices and case theories. We examine comments by Justice Riordan on admissible lawyer-expert communications.

Background

In Finance & Guarantee Company Pty Ltd v Auswild (Expert Evidence Ruling) [2019] VSC 665, the beneficiaries of a Trust brought claims against its trustees (Auswild) for alleged breaches of its fiduciary duties to act bona fide and in the interests of trust shares.

The Plaintiffs brought claims in relation to business dealings of the Defendant from 1985 to 2006. The Plaintiffs claimed that Mr Ronald Auswild and his son, who were directors of the Preston Motor Group, in which the Trust held most of its shares, acted such that the transactions they entered into benefitted the portions of the company owned separately by the Defendant instead of, and above, the portion that constituted the Trust.

Key Points of Contention

As a part of their claim, the parties submitted expert reports from professional accountants. The Plaintiffs took issue with the report of Mr Brian Silvia of BRI Ferrier, submitted by the Defendants.

According to the Plaintiffs, one critical reason why Mr Silvia’s report was inadmissible was on account of its falling within the scope of section 135 of the Evidence Act 2008 (Vic), which provides that:

The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might—

(a) be unfairly prejudicial to a party; or

(b) be misleading or confusing; or

(c) cause or result in undue waste of time;

The complainant argued that Mr Silvia’s correspondence with the Defendant lawyers in the preparation of his expert report reflected a “staggering” amount of collaboration. [36] In portraying Mr Silvia’s over-involvement with Defendant counsel and lawyers, the Plaintiffs cited the facts that:

  • Mr Silvia had been retained by PV Lawyers since 2013;
  • He had exchanged over 348 emails with PV Lawyers over the course of producing his report [36]; and
  • He had attended numerous meetings with solicitors, potential witnesses, and counsel for the second to fifth defendants in which he discussed the party’s case theory. [36]

The Plaintiffs proposed to the court that the duration, frequency, and detail of the communications between Mr Silvia and PV Lawyers had jeopardised Mr Silvia’s independence to the extent where he had become unavoidably and ‘unfairly prejudicial’ to a party. [13]

Analysis of Expert-Lawyer Correspondence

The Court did not deem the history of correspondence between Mr Silvia and PV Lawyers tantamount to any prejudicial or biased moulding of Mr Silvia’s expert opinion that would warrant the court deeming Mr Silvia’s report inadmissible. In reaching this conclusion, Justice Riordon affirmed the rule that expert reports are only inadmissible because of loss of independence where that loss involves a biased “moulding” of the expert’s report by the lawyers. [43]

In addition, the judge outlined the scope of appropriate communications between experts and lawyers.

Firstly, a letter of instruction does not represent the end of a conversation between the party and its expert regarding the nature of the questions asked. [40] The court acknowledge that, in general, some discussion of the matter between party and expert is expected.

Justice Riordan cited the Practitioner’s Guide to Briefing Experts:

Sending a letter of instruction is never the totality of the communication between an expert and the lawyer briefing them. Amongst other things, it will typically be appropriate’. [40]

In general, the Court highlighted the essential role that lawyers perform in advising experts on how to submit a satisfactory report. The court drew on Justice Brooking’s judgment in Phosphate Co-operative Co v Shears (No 3), which noted that:

it is neither appropriate nor conducive to an efficient trial of a proceeding for an expert, unaware of the rules of evidence, to put forward a report that does not properly identify the basis for his or her opinion or is otherwise in an inadmissible form.’ [42]

In general, the act of correcting factual errors in letters of instruction and identifying the materials an expert requires to give their informed opinion is included in what is permissible. [42] Further, the Court noted that parties may go so far as to describe their case theory to an expert in order to clarify the questions and propositions put before them. [41]

Secondly, it is generally assumed that there is an advisory relationship between the expert and lawyers in detailed matters.

Justice Riordan outlined two distinct qualities of such permissible lawyer and expert correspondence in complex matters:

  1. Assistance to the expert from an employee of the lawyers who can facilitate the expert’s access to, and management of, copious amounts of documentation; and
  2. Assistance from the expert to the lawyers, in particular cases in which experts use their knowledge and understanding of the technical aspects of the matter to help counsel more competently understand the facts of the matter for the purpose of developing sound case theories and cross-examination pathways. [51]

Decision: Evidence Admissible

Here, communications between Mr Silvia and PV Lawyers covered instructions to review financial reports and attend the offices of numerous accountants for the purpose of collecting documents and comprehending them. Some communications included instructions to provide questions for cross-examination of unfavourable financial reports. To the extent that such correspondence was necessary to facilitate Mr Silvia’s understanding of the case as a whole and his ability to provide a comprehensive analysis of the company’s finances, the correspondence fell within the scope of what is admissible.

It was evident to the court that, given the “patchy” quality of the financial records and the high quantity of documents comprising the business records (32,426 pages), the work of solicitors and accountants on the matter would “require communication and indeed collaboration between those persons”. [47] Further, it found that the collaboration between Mr Silvia and PV Lawyers’ assistant Ms Karam in compiling relevant financial records reflected a practice that is “common in these complex cases” and did “not of itself lead to an inference that Mr Silvia was other than independent”. [47]

In conclusion, on the balance of an examination of lawyer-expert communications and on the basis that Mr Silvia’s report generally reflected the findings of other experts engaged by the parties, the Court found that Mr Silvia’s evidence did not lack impartiality. [48] Mr Silvia’s report therefore did not satisfy s 135, subsection a) of the Evidence Act 2008 (Vic).