Trial witness statements: underwriters, take note

On 6 April 2021, significant changes to the form and content of witness statements will come into effect in the Business & Property Courts (including the Commercial Court). A growing concern amongst judges at all levels as to the authenticity, utility, and accuracy of witness evidence has resulted in a major shake-up under the Civil Procedure Rules (CPR).

Whilst the majority of the impending changes arising out of the 127th CPR update and accompanying Practice Directions will be set out by legal teams, we provide below a brief summary of the key changes and the likely impact on the London Marine Market.

The basic premise under Part 32 of the CPR has not changed: the duty of factual witnesses is to give the court an honest account of matters known personally to them. The court is sympathetic to witnesses being unable to recall matters in any great detail that have often taken place some years ago. That is amplified by the nature of the London Market and the reality of writing business which might see an underwriter participate in over 2,000 meetings per year.

Content of statements

Parties have been warned to avoid arguing the case through witness statements, providing any general commentary or opinion on matters at issue and articulating formulaic and self-serving constructed points in support of the argued case.

In the recent judgment of Mr Justice Jacobs in ABN Amro Bank N.V. v Royal & Sun Alliance Insurance plc and others [26.02.21], this point was highlighted against the background of a witness often giving different accounts and recollection of matters during oral evidence than in their written statement. This was because of the “considerable care that is usually taken in drafting witness statements with the result that they frequently become an articulation of the best points that can be made in support of a party's case.”

The result will be that the court feels unable to place any reliance on the written passages in question which defeats the purpose of the written statements. The court is keen to avoid these types of situations from arising. The impending changes will go further to ensure that witness statements are not taken as a further opportunity for the parties to argue their case.

The court has re-emphasised the need for witnesses to use their own words and to explain how well they recall the matters addressed. A strong degree of recollection of the broke received may well be difficult for underwriters bearing in mind contracts of insurance are formed at Lloyd’s and elsewhere in the London marine insurance market in a compressed atmosphere. The reality is that the contemporaneous written evidence contained within the underlying underwriting files and notes will often therefore be crucial for the purpose of taking witness evidence.

Documents

Guidance from Mr Justice Andrew Baker, the Admiralty Judge, has noted that witnesses “may be refreshed by being shown a document, but only if the witness created or saw the document while the facts evidenced by or referred to in the document were still fresh in their mind, so that they would have known if they were accurate or inaccurate.”

Parties ought to therefore refrain from seeking input from witnesses on documents which they have no (or limited) contemporaneous knowledge of. From underwriters’ perspective, the crucial documents will invariably be the policy, its front sheet with the notes taken during the placement/renewal broke and any supporting documents provided by the insured via its brokers as part of the presentation of the risk.

The court’s decision to reign in witnesses who conduct a walk-through commentary on the documents in the case is likely to mean that those documents to which underwriters may legitimately refer will become even more important for the purpose of giving witness evidence.

This will serve to underline the necessity for ardent note taking during meetings regarding policy placement, renewal, and variation. Those notes will be a document which underwriters can, and should, continue to refer to, comment upon and rely on as evidence of their contemporaneous understanding of the matters discussed at the time. The new measures and guidance will permit this practice in view of the significance of underwriters’ notes and the likely assistance they will provide in ‘refreshing’ any memory of the meetings in question.

It is worth reemphasising that, looking beyond witness statements, underwriters’ notes are themselves a vitally important written and contemporaneous record, upon which the court is likely to place significant evidential weight.

Taking evidence

As set out above, the parties’ legal teams will also see an increasingly scrutinised role in the preparation of trial witness statements, evidenced by the introduction of a signed certificate of compliance at the end of every witness statement. Witnesses must have explained to them the purpose and proper content of a witness statement at the outset.

Best practice going forwards will continue to be taking evidence during an interview meeting with a witness. Witnesses should therefore make sure that they are comfortable with the process and that they understand what is being asked of them from day one.