Expert Costs Liability

Recent reported developments in a personal injury claim involving Dr Grace Kerali (in which the writer appeared) have thrown a spotlight onto a rarely explored aspect of costs recovery – the recovery of legal costs from one of the experts involved in the case.

It is a truism that the expert evidence in a case can radically affect the outcome. But while the expert undoubtedly owes duties of care to the party instructing them, and overriding duties to the court, the expert owes no duty to the opposing party. And yet it is the opposing party who may be the party most affected by the evidence given.

The CPR entitles a party to apply for costs against a non-party. This article considers whether such powers give rise to a potential claim for costs as against an expert and what steps the paying party should take if it intends to embark upon such a course.

Unlike claims as against a third party funder, an expert owes explicit duties to the court. In some cases, the expert will have appeared in court, given evidence and had that evidence tested.  The Judge will then have made findings about that evidence which may form the basis of a potential claim for costs by the opposing party.

But in smaller claims, especially in smaller personal injury claims, the expert will not be in court, and the expert will not have had the opportunity to address the issues which have arisen at trial, and upon which the claim for costs may be predicated.

In such circumstances, I would suggest that the expert concerned is entitled to be notified at the earliest possible opportunity the facts and matters which may give rise to a non-party costs order. And that point may be well before any actual trial. The expert can then consider what steps they may wish to take in the litigation. For example, the expert may wish to be joined to the action as an Interested Party or intervener pursuant to CPR 19.2(2) and CPR 19.4(2)(b) so that he/she may be represented in their own right and make appropriate submission as regards the conduct of the action.

The party pursuing the application would be well advised, even if the expert is an Interested Party to make a formal application to join the expert as a party for the purposes of making the costs order, pursuant to CPR 19.2(2). Again, it is suggested that this be done at the earliest point where such an application is a realistic prospect.

Given that the course proposed is a highly unusual one in the context of litigation, the expert ought to be entitled to know the precise basis of the application made and the evidence to be relied upon.  Whether the court will require a formal statement of case is uncertain on current practice, but the expert – if well advised – will no doubt demand one.

The expert ought – if need be – to be able to call evidence in their own right to meet the allegations and/or the evidence brought against them.  Insofar as there has been a trial in which the expert has participated, and cross-examination and findings made, the issues may be clearer. In circumstances where there has not been a trial, then matters are much less certain and a degree of formality will ensure fairness.

I would suggest the document – whether it is a statement of case or not – should identify, at a minimum:

a) the allegations pursued (and if the allegations are akin to Bolam incompetence, similar particularity ought to be provided);

b) the evidence relied upon;

c) the findings the court is invited to make;

d) the costs consequential upon those findings the applicant seeks to recover.

There needs, of course, to be a demonstrable close connection between the claim for costs and the conduct complained of.  It is for the application to establish a prima facie case as to why they are entitled to join an expert for the purpose of seeking relief  – which may be declaratory relief forming the basis for a costs application at a later stage.

And the applicant must meet the minimum threshold of proving a link between the joinder of the expert and costs consequences it is claimed the expert has occasioned. In XYZ v Various Companies, Sub. nom. PIP Breast Implant Litigation [2014] EWHC 4056 (QB) an Application to join in an insurance company for declaratory relief was refused:  Mrs Justice Thirlwell said at para 23, because, inter alia:

“There is no connection between their claim for a declaration and the claims currently being made, as I have described them earlier. The question raised on the declaration is not connected with the subject matter of the proceedings.”

Since Jones v Kaney [2011] experts are no longer immune from suit by expert’s client. But the position as regards the opposing party – to whom the expert owes no duty – is somewhat different.

In such instances a non-party costs order may be made in accordance with CPR 46.2:

(1) Where the court is considering whether to exercise its power under section 51 of the Senior Courts Act 1981 (costs are in the discretion of the court) to make a costs order in favour of or against a person who is not a party to proceedings, that person must –

(a) be added as a party to the proceedings for the purposes of costs only; and

(b) be given a reasonable opportunity to attend a hearing at which the court will consider the matter further.

However, the threshold is – I would suggest – a high one. In Phillips v Symes (No.2) [2004] EWHC 2330 (Ch) Peter Smith J indicated (obiter) that it may be appropriate to make a costs order in circumstances against an expert witness who, by his/her evidence, caused significant expense to be incurred and did so in flagrant and reckless disregard of his duties to the court; Arthur JS Hall & Co v Simons [2002] 1 A.C. 615 and Stanton v Callaghan [2000] Q.B. 75 applied.

In Philips, the expert had given evidence and had been tested in cross-examination.  It is in that context that the Judge held that the only warning required by expert witnesses as to the potential consequences of their giving evidence was the self-evident one set out in the 1998 Rules and in the declaration that the expert signed.  That declaration made it clear that the expert could be the subject matter of contempt proceedings. Bearing in mind the severity of those sanctions one expected an expert to be alive to potentially adverse consequences in the event that he breached his duty to the court, Orchard v South Eastern Electricity Board [1987] Q.B. 565 applied.

It is envisaged under the s51 procedure that the Trial Judge will determine the application for costs against the third party. However, in circumstances where a Judge made adverse findings against an expert who had not taken part in the actual trial (on the basis of the claimant’s evidence only, for example), query whether a later hearing by the same Judge to determine that experts costs liability would potentially engage the expert’s Article 6 rights.

An expert could legitimately complain that the complaints against him/her had been pre-determined without the expert’s presence and in such circumstances a fair trial was not possible. An alternative may be for the Judge to recuse himself/herself and direct that any Judge hearing the matter should not consider themselves bound by the findings made as regards the expert evidence. It is likely that the Applicant would vigorously oppose any such suggested approach.

With the advent of QWOCS protection, Defendants are understandably looking to exploit the legitimate opportunities they have to recover their costs outlay in successfully defended claims.   That legitimate right must, of course, be balanced by the entitlement of experts to give robust and sometimes unpopular opinions, unfettered by concerns that they may be in the firing line for costs applications should the party for whom they act, ultimately lose. It is a balancing act that the courts are likely to have to undertake on a more frequent basis in the future.