Expert evidence – The letter of instruction and involvement of lawyers

10 August, 2023

The recent decision in New Aim Pty Ltd v Leung [2023] FCAFC 67 (New Aim) has provided some useful guidance in relation to briefing experts in litigation.

Key Takeaways

Provided that lawyers do not seek to influence (or give the appearance of influencing) an expert’s opinion, it is permissible for lawyers to:

formulate a formal letter of instruction shortly before an expert report is finalised;
engage with the expert in order to formulate the questions that will form part of the letter of instruction;
draft aspects of an expert’s report to ensure it is in admissible form[1]
draft aspects of an expert’s report on instructions from the expert, particularly factual parts.

The Role of the Expert

The rules of Court state that an expert witness is not an advocate for a party. The expert has a paramount duty, overriding any duty to the party to the proceedings or other person retaining the expert witness, to assist the Court impartially on matters relevant to the area of expertise of the witness.[2]

However, in many cases, each party will retain their own expert, which raises an obvious tension between the expert’s paramount duty and the party who pays their bills.

As such, parties and Courts approach expert evidence with caution. Anything that calls into question the expert’s independence can be fatal.

In this context, the process of briefing an expert is a delicate one.

The Letter of Instruction

It has become common litigation practice for lawyers to brief experts initially without a formal letter of instruction. Under this practice, a letter of instruction is not provided to the expert until after a draft report has been prepared and shortly before the report is finalised. Instead, there are usually verbal discussions between the instructing lawyer and expert as to the appropriate questions to be determined in the expert report before the letter of instruction is finalised.

The primary reasons for this practice are:

Reducing disclosure of communications between lawyer and expert.

Once the expert report is filed, there is an implied waiver of privilege in respect of draft reports and related communications,[3] which comes with the potential for opponents to obtain documents that undermine the expert evidence.

The need to ask the right questions.

If an expert misdirects themselves because they have been asked the wrong questions, their report is liable to be rejected or given no weight. For example, in the matter of Milevski v Paltos[4], the Supreme Court of NSW found that defendant’s expert evidence had no weight because the expert misdirected herself as to the value of goodwill of a partnership; the expert determined the special value of the goodwill to the plaintiff when she should have determined the value of the goodwill on the open market.

This practice was the subject of the recent appeal in New Aim.

In New Aim, the primary judge rejected the plaintiff’s expert report in its entirety because the judge could not be satisfied that the opinions expressed in the report truly represented the expert’s honest and independent opinions.

One of the issues raised by the primary judge was that the letter of instruction was provided to the expert the day before the report was finalised, and was drafted in a way that suggested the entire report was prepared within 24 hours. This practice of “inverting” the process of preparing a letter of instruction after consultation with an expert was criticised in BrisConnections Finance Pty Limited v Arup Pty Limited [2017] FCA 1268 at [71] where Lee J stated:

“The point of a letter of instruction being annexed to a report is not to act out a stylised ritual, but to provide to the Court with a transparent indication of what has been provided to the expert and the questions that the expert was actually asked to address. It should be able to be read literally without being silly. As is (at the very least) implicit in FCR 23, the work of the expert is to attend to the questions “the expert was asked to address”, not to invert the process by using the expert’s specialised knowledge in order to identify the questions that should have been asked and the assumptions that should have been given. The true instruction to Mr Veitch was oral and only emerged in the evidence on the voir dire. The integrity of the expert evidence process and the independence of experts is best facilitated by transparency in what is being asked of experts prior to, or at the time, they are forming their opinions and, if the questions need to change because they are misdirected, a record being made by way of supplementary instructions as to what has changed.”

The Full Court of the Federal Court in New Aim did not agree with the approach suggested in BrisConnections and stated that laboriously following such a process would likely result in increased costs and delay for the parties and ultimately a waste of the Court’s time.

Furthermore, the Court in New Aim stated that Rule 23 of the Federal Court Rules does not require every single question asked of the expert during the course of the expert’s retainer to be identified in their report. It only requires the report to identify the question the expert was asked to address in his or her report.

The Court in New Aim went on to provide the following guidance in respect of letters of instruction:

It is not unusual for a final letter of instructions, containing the final form of the questions to be answered by an expert, to be prepared shortly before an expert report is finalised and indeed this is a common occurrence particularly where the issues are novel or complex.
It would not ordinarily be concluded from the fact that the final letter of instructions is dated the day before the final expert report that work on the report only started once the letter of instruction (in final form) had been received, at least as a matter of course, particularly if it is clear from other communications with the expert, including letters of retainer, that the expert had been retained at an earlier date and had been actively engaged in providing information and observations on the issues upon which the expert’s input was sought.
The material placed before the Court should make clear what has been provided to the expert and the questions that the expert was asked to address.
We observe that it is not unusual in a number of contexts not to finalise the formulation of the question asked of the expert without first discussing the issues with the expert. It would be expected, for example, that a solicitor would engage with an expert in a specialised field of scientific knowledge about how to frame a question so as not to give rise to a nonsensical question or one which misses the real issues or one which fails to engage with all of the issues. This is not an inversion of a process which must be necessarily followed of first asking a question and then having its inadequacies pointed out.
That question may or may not be formulated at the time the expert was first retained. In the present case, the question was not finally reduced to writing until a day before the report was filed, a fact which was made clear by the material filed with the report.
What is appropriate or desirable depends on any number of circumstances peculiar to the particular case and different equally proper approaches can be expected from different legal practitioners.

The Involvement of Lawyers in the Preparation of Expert Evidence

The primary judge in New Aim had criticised the involvement of the plaintiff’s lawyers in the process of drafting the expert’s report. The primary judge stated:

“What occurred in this case went far beyond the permissible scope of involvement of lawyers who retain an independent expert in order to give evidence in a proceeding. I reject the submission of counsel for the applicant that I should accept Ms Chen as an independent expert witness and that “the process by which her evidence was prepared is unremarkable.” For the reasons I have given, it most certainly was not. Even if in some circumstances it is proper for lawyers to draft an independent expert witness statement for consideration by the putative expert, that fact must be disclosed in the expert report conformably with the obligations that the expert assumes in accordance with the Expert Evidence Practice Note of this Court and the Harmonised Expert Witness Code of Conduct. And then, all correspondence relating to the manner of preparation of the report should be disclosed and, to the extent that oral advice is conveyed to the expert, the substance should be documented and disclosed. What occurred in this case should not be repeated.”

The Full Court of the Federal Court disagreed with several propositions in the above paragraph, as follows:

at the core of the requirements on legal practitioners with respect to assisting in the preparation of evidence is a requirement not to influence a witness’s evidence.
it is permissible for a solicitor to be involved in the drafting of factual aspects of an expert’s report. In fact, the drafting of written evidence of a factual nature by a solicitor from a statement or other material provided by a witness is not unusual.
the involvement of a legal practitioner in the drafting of evidence may, however, give rise to the perception that the drafter may have influenced the content of the evidence, even subconsciously:.
there is not one rule which covers all experts or situations. In the typical case of a medical or valuation expert, it would ordinarily be expected that that the expert drafts their own report. However, in other cases, if there are physical, language or resource difficulties, it may be appropriate for a legal practitioner to be involved.
there is no legal obligation on legal practitioners to disclose their involvement in the preparation of an expert report. However, this may well be desirable (and ethical) in certain circumstances.
there is no legal obligation on experts to disclose all of the correspondence relating to the preparation of their report. However, this may well be desirable (and ethical) in certain circumstances.

The “don’ts”

In this light, the following are some notable instances where Courts have found lawyers to have improperly influenced the preparation of expert evidence.

In Universal Music Australia Pty Ltd v Sharman License Holdings Ltd [2005] FCA 1242, a solicitor suggested an amendment to a sentence in an expert’s draft report. In response to the suggestion, the expert stated: “I was not aware of this, even after our testing. But if you say it is so then fine by me.“[5] The Court concluded based on this comment and other evidence that the expert was prepared seriously to compromise his independence and intellectual integrity and that it might be unsafe to rely upon the expert in relation to any controversial matter.

In Phosphate-Operative Company of Australia Ltd v Shears [1989] VR 665, a company engaged a prospective expert to prepare an independent accounting report as to whether a proposed scheme of arrangement was fair to its members: The prospective expert was engaged before any expert questions were identified for their opinion and was involved in discussions with the company’s officers and its legal advisers: A number of draft reports were prepared and changed after discussions with company officers and legal advisers, before a final report labelled as an independent expert report was provided to the members: [665]. The Court ultimately found at [686] that the expert report did not express an opinion genuinely held and was the result of an exercise carried out for the purpose of arriving at a desired result. At [680], the Court warned against independent experts from becoming too close with the people who brief them for danger of being regarded and regarding themselves as part of a “team”. Furthermore, the Court stated that it was undesirable for a prospective independent expert to disclose to their prospective employer their probable general approach.

Conclusion

It is not necessary to provide a letter of instruction to an expert when they are first briefed.

A letter of instruction to an expert may be provided contemporaneously with their report, after review of a draft report and discussion with the expert.

The involvement of lawyers in the preparation of expert evidence is a delicate but flexible exercise.

The overarching rule is that the lawyers must not seek to influence (or give the appearance of influencing) an expert’s opinion.

The need (and permissibility) for a lawyer’s involvement will depend on the type of expert evidence and the challenges of a particular report.

As a best practice, lawyers should not have any involvement in the preparation of parts of a report dealing with an expert’s opinion, so as to not give the impression that the opinion has been influenced.

However, a lawyer may assist to ensure the report is in admissible form, and to prepare factual aspects of a report on instructions from the expert.

[1] Jango v Northern Territory of Australia (No 3) [2004] FCA 1029 at [13]; Harrington-Smith on Behalf of the Wongatha People v Western Australia (No 7) (2003) 13 FCR 424; [2003] FCA 893 at [18]- [19].

[2] Clause 2 of the Harmonised Expert Witness Code of Conduct (Annexure A to the Federal Court of Australia’s Expert Evidence Practice Note). A similar provision can be found in Schedule 7 to the Uniform Civil Procedure Rules.

[3] ASIC v Southcorp Ltd (2003) 46 ACSR 438; [2003] FCA 804 at [21]; Prince Removal & Storage Pty Ltd v Roads Corporation [2012] VSC 245.

[4] [2022] NSWSC 261 at [153] and [194].

[5] At [228].

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Canadian Court elevates thumbs-up emoji to signature status

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After the phone call, Mr Mickleborough applied his ink signature to the contract, took a photo of it on his mobile phone and texted it to Mr Archter with the text message, "please confirm flax contract". Mr Archter responded by texting back a "thumbs-up" emoji, but ultimately did not deliver the 87 metric tonnes of flax as agreed. Issues The parties did not dispute the facts, but rather, "disagreed as to whether there was a formal meeting of the minds" and intention to enter into a legally binding agreement. The primary issue that the Court was tasked with deciding was whether Mr Achter's use of the thumbs-up emoji carried the same weight as a signature to signify acceptance of the terms of the alleged contract. Mr Mickleborough put forward the argument that the emoji sent by Mr Achter conveyed acceptance of the terms of the agreement, however Mr Achter disagreed arguing that his use of the emoji was his way of confirming receipt of the text message. 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The question is not what the parties subjectively had in mind, but rather whether their conduct was such that a reasonable person would conclude that they had intended to be bound (Aga at para 37)." Justice Keene considered several factors including: The nature of the business relationship, notably that Mr Achter had a long-standing business relationship with SWT going back to at least 2015 when Mr Mickleborough started with SWT; and The consistency in the manner by which the parties conducted their business by way of verbal conversation either in person or over the phone to come to an agreement on price and volume of grain, which would be followed by Mr Mickleborough drafting a contract and sending it to Mr Achter. 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Published by Foez Dewan

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Insolvency

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