Expert matters: Expert advice - when expertise clashes with loyalty

When giving evidence, it is important that an expert remains independent and free from bias. This is set out in professional standards (such as APES 215, which applies to accountants) and in court expert witness codes of conduct.  For example, the Expert Witness Code of Conduct in Victoria¹ requires that an expert, among other things:

So what should a judge do when the only (or best) expert evidence available is from those involved in the litigation themselves?

Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd²

This proceeding resulted from an appeal against the grant of a patent for bulk material containers developed for use in the mining industry. Bradken ('the Appellant') claimed that the patent was invalid as it lacked novelty and an inventive step. Further, it stated that the patent was public knowledge before the earliest date of the application. Bradken’s expert argued that the steps taken for the patented device were logical steps that anyone within the industry would know and be able to have arrived at. In response, Lynx sought to rely on the expert evidence of Dr Mazur, who was a director of Lynx and also one of the named inventors in respect of the Patent Application, making him 'best placed' to provide the expert evidence. Whilst the Appellant agreed that Dr Mazur had the relevant expertise, it contended that:

“…Dr Mazur’s evidence going to the issue of inventive step must be totally or considerably discounted because of his intimate involvement in the Patent Application, his role as a director of Lynx, his involvement as an inventor and his ‘plain inability’ to dissociate himself as a senior executive of Lynx for the purpose of giving expert opinion evidence.”

The Appellant also argued that Dr Mazur could not be impartial, as he had already formed the view that the patent application was valid. The judge took into account the fact that Dr Mazur was not entirely independent, however he stated:

“...I was satisfied that it was entirely competent for Dr Mazur to give evidence but clearly there would be a question as to weight to be attached, on the one hand, to a totally independent expert and, on the other, to one who is a director of the company and who had a significant financial interest at stake in the outcome.”

“Ultimately, to the extent that expert witnesses assisted, I found the explanations by Dr Mazur more convincing even after taking into account his lack of independence. However, this preference was on an intellectual basis. I stress, again, that nothing turned on the credibility of any witness.”

Alstom Ltd v Yokogawa Australia Pty Ltd³   

A dispute arose regarding a long term contract for refurbishment of the Playford Power Station turbines between Alstom and Flinders Power Partnership (FPP). The long term contract contained time and performance constraints for Alstom with damages payable where Alstom failed to meet set milestones. There were delays and performance issues in delivery of the contract that resulted in $20.5 million in damages being paid by Alstom to FPP.  Alstom commenced proceedings to recover this amount from Yokogawa, which had been subcontracted to provide electrical work for the power station, alleging most of its delay in achieving the milestones was attributable to Yokogawa.

A number of the expert witnesses were employees of the parties, and issues arose regarding the evidence provided by one of those, a Mr Hodge who was called by Alstom.  Mr Hodge was a very experienced boiler combustion engineer who had worked for Alstom since 2001. Although his role was as Senior Power Plant Specialist of the Playford project, the Judge did not disqualify his evidence, saying: 

“The fact that Mr Hodge was at all material times an employee of the party by whom he was called does not disqualify him from giving evidence as an expert.”

In determining whether Mr Hodge’s expert opinion could be considered, the Judge looked to the obligations of an expert witness and the extent to which Mr Hodge’s intentions and actions conflicted with these, stating:

 “If it is apparent that obligations to the expert’s client are being put ahead of the obligations to the Court, the Court will need to hesitate long and hard before accepting the views expressed by the expert.”

Specifically of Mr Hodge’s behaviour he stated:

“ [Mr Hodge] carried out some other engineering work for Alstom at other power stations, but after late 2005 his engagement was almost exclusively for the purpose of advancing this litigation on behalf of Alstom with the object of “wrapping it up”, during which time he was reporting to Mr Neil. I am prepared to accept that he did not initially understand that he was going to be called as an expert witness, but he came to that understanding in the last quarter of 2006. Regrettably, that understanding appears not to have influenced the role that he continued to undertake on behalf of Alstom.”

On this basis, the Judge concluded that the expert evidence of Mr Hodge was unable to be taken into account stating:

 “the inevitable inference to be drawn from these events is that Mr Hodge had abandoned any semblance of professional independence he might have had as an expert witness in favour of promoting the Alstom team.”

The Judge therefore determined that Mr Hodge’s expert opinion could only be accepted to the extent that it coincided with the opinion of Yokogawa’s expert. 

It is apparent from the above examples that the weight to be placed on the evidence of a 'non-independent' expert witness will be determined on a case by case basis. Whilst being an employee of a party does not necessarily preclude one from being an expert, if the expert/employee is unable to retain the required professional independence and comply with the relevant Code of Conduct, their expert evidence may not be accepted or given weight by the Court. It will be up to the judge, based on the applicable facts of the case, to make an appropriate call as to the weight to be given to their evidence and whether they have remained sufficiently independent and unbiased. 
 

End notes

1. Form 44A, Expert Witness Code of Conduct, Supreme Court of Victoria and County Court of Victoria