Why expert reports must stick to the facts, and avoid posing a “distraction”

1. Background

The judgment is related to ongoing proceedings in which Thames Water is seeking approval for a restructuring plan under part 26A of the Companies Act 2006.

The applicant in this case was Kington, a member of an ad hoc group of parties opposed to the proposed restructuring plan.

During a hearing on 21 January, Kington applied for expert evidence in the form of a draft report by a competition economist to be presented to the court. 

The report purported to contain evidence regarding the nature and effect of a funding condition proposed to be included in a restructuring plan.

The judge rejected that application. 

2. Reasons for decision

In rejecting Kington’s request, Mr Justice Trower said the evidence in the report was not reasonably required to resolve the competition law argument at hand. 

Rather, the judge said, “much of the draft...Report seems to me to provide background information about how it is said that competition law works, and more theoretical questions such as the economic features of the [funding condition] which are said to be shared with well-established economic theories of harm.”

The judge pointed to CPR 35.1, which says that expert evidence must be restricted to that which is reasonably required to resolve the proceedings. 

Referring to British Airways plc v Spencer [2015] EWHC 2477 (Ch), the judge said there were two questions related to the admissibility of such evidence:

• Is the evidence necessary to resolve the proceedings?
• Where evidence is not necessary for that purpose, may it still be of assistance to the court in resolving the issue?

The judge concluded that the report met neither requirement. The judge agreed with Philip Moser KC, for the respondent, when he argued that much of the report was inconclusive and speculative.

The justification for describing and developing what is in reality legal analysis or a point of law is that [the expert] explains that he is able to look at the problem from an ‘economic perspective’ or that particular conduct can be expected ‘as a matter of economics’ or can be looked at ‘in economic terms’

This is advanced at a relatively high level of abstraction, but when it comes to providing evidence on what might be described as the harder-edged market analysis, such as questions of market description and a dominance assessment on the facts of the present case, there is very little on which the court can rely because of the qualified and tentative terms in which it is expressed.

Mr Justice Trower

Judge

In closing, the judge said: “Having regard to the submissions that have been made on the merits of the competition law arguments, I reached the clear conclusion that the draft Report was either commentary on the law looked at from an economist's perspective or was expressed in such tentative, caveated and incomplete terms that it is not reasonably required to resolve the proceedings. If it were to be admitted, it would indeed be an ‘inappropriate distraction’.”

3. Conclusion

This case is a reminder that it is not incumbent on experts to share their opinion with the court but to provide factual evidence that is of material use in understanding, and reaching a conclusion on, the legal arguments.

It also highlights the time bound nature of many legal proceedings, which means that arguments must not divert from question at hand. The judge made it clear that “the time-critical nature of the current application means that this is a paradigm of a case in which the court must do its best to ensure that the proposed expert evidence really is reasonably required to resolve the proceedings”. 

In other words, there is no time to pursue theories when what is required are facts. Experts should always keep their duty to the court front of mind and endeavour to deliver reports that aid the court on a factual basis, rather than sway its opinion.

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