Share
It has been a year since Practice Direction 57AC (the PD) came into force in the Business and Property Courts, applicable to all trial witness statements, and with the overarching aim to reform ‘over-lawyered’ and unnecessarily lengthy witness statements.
What were the fundamental changes?
The key changes included putting an end to witnesses using their statements as a means to argue their case and taking the court through or quoting documents relied on by the party. The hope was that the PD would result in witnesses only commenting on facts relevant to the case that they have personal knowledge of, resulting in concise statements. Confirmations of compliance were also introduced.
If a party fails to comply with these rules, paragraph 5 of the PD states that the court retains full powers of case management including:
- The power to strike out some or all of the witness statement.
- To order the witness statement to be redrafted in accordance with the rules.
- To order the witness to give some or all of their evidence in chief orally.
- Adverse costs orders.
The courts have now had the opportunity to decide how to deal with statements that fall foul of these rules and have made the following decisions of note:
Mansion Place Ltd v Fox Industrial Services Ltd [2021]
Both parties applied to strike out parts of each other’s witness statements that did not comply with the PD. The court made redactions to the existing statements, determining these on a paragraph-by-paragraph basis, with costs in the case.
The court noted that the correct procedure where one party is concerned about non-compliance is to raise the concern with the other side and attempt to reach agreement. Satellite litigation over non-compliance is not to be encouraged.
Blue Manchester Ltd v Bug-Alu Technic GmbH [2021]
The claimant applied to strike out the second defendant’s witness statements in full on the basis that they were in breach of the PD, and were examples of the ‘over-lawyered’ statements the PD was hoping to avoid.
Despite allegations of multiple breaches, the court held that these did not justify the harsh sanction of strike out as there was sufficient compliant material in each statement.
Amendments and redactions were made and the court provided an appendix to show what changes were needed to various sections to make them compliant.
Of particular importance, the court stated that witness statements containing similar wording on a particular issue was not a coincidence and would not be compliant with the PD. Support was also repeated for parties cooperatively dealing with non-compliance, with threats that they would be penalised in costs if they indulge in “unnecessary trench warfare”.
Prime London Holdings 11 Ltd v Thurloe Lodge Ltd [2022]
In this case, the defendant’s witness statement was missing the confirmations of compliance from the witness and solicitor. The defendant had also failed to follow the Statement of Best Practice.
Both parties were criticised by the court; the defendant for failing to act constructively when the breach was identified by the claimant (later accepting that there was some breach on their part) and the claimant for identifying the breach late and for insufficient detail as to the breach.
The court ordered the defendant to replace the statement with a complaint one, along with a penalty in costs on an indemnity basis.
Greencastle MM LLP v Payne [2022]
The claimant served statements that the defendant argued set out the claimant’s case in addition to including content the witnesses had no knowledge of. The defendant also argued that the claimant’s statements speculated as to what third parties would have done and provided commentary on documents.
The court held the statements were “an egregious case of serious non-compliance” with the PD. Despite this, the court still considered that withdrawing permission for the claimant to apply to the court to adduce further statements and relief against sanctions was disproportionality punitive. As such, the court withdrew the existing permission for the statements and ordered they be replaced. Unlike Blue Manchester Ltd, the court left the claimant to work out at their own expense how to redraft the statements so that they were compliant.
Comment
In Greencastle MM LLP v Payne, the judge questioned whether the solicitor who certified the witness statement had even read the PD. Despite the level of non-compliance, the court still felt that it would be disproportionate to strike out the witness statements leaving the claimant to apply for relief. It therefore seems that the courts are not inclined to take a ‘one strike and you’re out’ approach. However, there will be costs consequences for those who do not comply first time round in the form of redrafting and application costs. There will also be costs consequences for those who fail to accept that they have made errors in their application of the PD.
The court in the case of Greencastle MM LLP v Payne also refused to provide assistance to the party in breach as to how they needed to make their statement compliant in contrast to Blue Manchester Ltd v Bug-Alu Technic GmbH. The court cannot be asked in every case to assess compliance with the PD on a word-by-word basis. To do so would not only lead to delays but also push the cost of making the statements compliant onto the court, not the defaulting party. We may therefore see more applications resulting in a breach being found, but the defaulting party being left to sort out how to resolve the issues by themselves.
The courts clearly consider that issues of non-compliance can and should be dealt with between the parties and as such, may give little credence to applications that deal with petty issues raised by one party, or a defaulting party’s inability to admit obvious breaches. However, this should not deter representatives from making applications when faced with an opposing party who acts unreasonably when faced with allegations of non-compliance.
Notably, these decisions all dealt with witness statements for factual witnesses, not statements that accompany an application to court prepared and signed by a solicitor. The question therefore remains as to whether the courts will apply the same sanctions to these witness statements, or still welcome these often detailed and lengthy statements in the hope of reducing the number of applications requiring a hearing.
Whilst the PD remains not applicable to personal injury claims for the present time, as and when this PD does expand its remit, there will now be a handful of decisions illustrating how non-compliance will be treated. The courts may therefore have little patience for representatives specialised in various areas of law who are new to this PD given the number of cases that have now dealt with it.
Related items:
Insurance and reinsurance
United Kingdom