CIArb News

Independence vs. Loyalty: Are an Expert's Duties to a Tribunal and an Engaging Party at Odds?

22 Jan 2021

Secretariat Consulting PTE Ltd & Ors v A Company [2021] EWCA Civ 6 (11 January 2021)

The issues before the UK Court of Appeal in this case centre on whether an expert firm owed a fiduciary duty of loyalty to their client company and, if not, whether they owed a contractual duty to avoid conflicts of interest. If such duties existed, could they then be attributed to the other entities in the expert firm’s secretariat and would that yield a conflict of interest in the companies acting in two related arbitrations? In answering these questions, the Court found that an expert’s duty to a tribunal to maintain independence was at the core of their analysis.

A firm of delay experts was engaged by an undisclosed company to act in an arbitration involving the construction of a petrochemical plant. The engagement contract specified that the experts would not create any conflicts of interest during the underlying arbitration. It further incorporated the Chartered Institute of Arbitrators (CIArb) Expert Witness Protocol, which contains the obligation that experts give independent evidence to tribunals, in its terms. Another expert firm in the same “secretariat” of companies as the first was then engaged by a third party in a second arbitration against the company involving the same construction project. The company successfully applied to the UK courts for emergency interim relief in the form of an injunction of both arbitrations on the basis that a conflict of interest existed due to the related delay expert firms acting for the company in one arbitration and against them in the other. The expert firm appealed.

Coulson LJ writing for the Court observed that there is no English precedent on whether an expert witness in an arbitration owes a fiduciary duty of loyalty to the engaging party. Some cases have noted that, while not a fiduciary relationship, the relationship between a client and an expert witness has some of the same characteristics. But it is generally agreed that “parties do not have property in an expert” (Harmony Shipping v Saudi Europe Line Ltd [1979] 1 WLR 1380). He also cited Jones v Kaney ([2011] UKSC 13), which notes “the provision of CPR 35.3 which states that it is the duty of experts to help the court with matters within their expertise… overrides any obligation to the person from whom the experts have received their instructions or by whom they are paid.”

The Court concluded that the duties an expert owes to a tribunal and the duties owed to their client are not at odds. This is because when the client instructs an expert they are seeking “a frank and honest appraisal.” If the client spends money engaging an expert, the expert is expected and obligated to tell the client whether their position has a chance of prevailing before a tribunal or not. An expert also knows that if they advise the client to proceed with a case, they will be on oath before the tribunal to deliver true and accurate information and their honest opinions. Thus, the Court found that, in actuality, complying with the overriding duty to the tribunal is the best way in which an expert can satisfy his professional duty to his client.

However, the Court noted that a conflict of interest can exist even if the duties of an expert to the tribunal and to the client are observed. While the same expert can act for and against the same client simultaneously without issue, in this case the expert owed the company a contractual duty to avoid any conflicts of interest per the engagement agreement. Given that obligation along with many of the facts of the case, such as the similar underlying fact patterns and issues in the two arbitrations, the Court found that a conflict of interest had been created when the related expert firms acted both for and against the client company simultaneously.

In concurring, Males LJ brought further focus to the nature of the international arbitration process and its relevance in examining these issues. While international arbitrators do not necessarily follow English-style procedural rules, even in an arbitration seated in England, the CIArb Expert Witness Protocol, which had been expressly incorporated into the expert’s engagement agreement, contains provisions which have the same effect as the requirement under the English civil procedural rules that an expert’s evidence is independently given to the tribunal and not influenced by any loyalty to the party that has engaged them. This requirement of independence stemming from the incorporation of the Protocol formed a “substantial strand in the arguments in this case.” This duty to give independent evidence is a duty which the expert owes to his client as well as to the court or tribunal. Carr LJ in concurring, summed up the findings of the Court that “an expert who complies fully with his duty of independence and objectivity to a court or arbitral tribunal is an expert who provides his client with the best possible service.”

Mercy McBrayer MCIArb, Research and Academic Affairs Manager, CIArb

 

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