“Whose statement is it anyway?” – Courts impose sanctions for non-compliant witness statements

“Whose statement is it anyway?” – Courts impose sanctions for non-compliant witness statements 31 Oct

There have been a variety of updates and changes to the Civil Procedure Rules (“CPR”) in recent years but few have caused as much consternation for solicitors and clients alike as the introduction of Practice Direction 57AC (“PD57AC”) concerning the preparation of witness evidence.

Witness statements had become the product of detailed input from legal teams, interpreting the documents to provide / support an agreed narrative – with the witness putting ‘gloss’ on the contents before facing exposure to cross-examination in the witness box.  A polite enquiry from opposing Counsel as to how the statement had been produced causing witnesses to stumble to explain the process that had been carried out!

The introduction of PD57AC was, therefore, intended to remove witnesses’ reliance on documents to reduce, so far as possible, influence being exerted upon witnesses’ recollections and prevent ‘over-lawyering’.

PD57AC

In compiling statements, witnesses must (a) set out only evidence known to them personally, (b) list the documents they have reviewed, (c) avoid commenting on the opponent’s case, (d) omit legal argument and, (e) avoid narration of the main documents.

As for the lawyers, they should not obtain evidence using leading questions, should prepare the statement “in such a way as to avoid so far as possible any practice that might alter or influence the recollection of the witness other than by refreshment of memory” and should exercise caution “before or when showing a witness any document they did not create or see” at the relevant time.

As a means of policing that process, PD57AC introduces the need for both witnesses and solicitors to sign a statement confirming adherence to the Practice Direction’s requirements.

Not surprisingly, given the nature of the new provisions, there have been a number of decisions in which the Courts have considered whether compliance had been achieved with PD57AC and, if not, the nature of the sanction to be applied.  In previous decisions, to include Mansion Place Ltd v Fox Industrial Services Ltd and Greencastle MM LLP v Alexander Payne & Ors the Court had ordered non-compliant statements to be struck out or for sections of the evidence to be substantially re-drafted.

In two recent decisions, the Courts have, once again, had to grapple with (substantial) non-compliance with PD57AC and to determine the appropriate sanction to be imposed.

Fulstow & Woods v Francis [2024] EWHC 2122 (ChD)

Firstly, in Fulstow & Woods v Francis, the claimants sought declarations as to their beneficial interest in shares in Capital Land (EDA) Swindon Limited (which owned substantial development land in Swindon) held by the defendant, Mr Francis.

It was agreed that certain payments had passed between the parties in November 2015.  The claimants' position was that, following a number of meetings and telephone calls, Mr Francis made declarations of trust in their favour.  Mr Francis denied the claims on the basis there was no intention to create legal relations between the parties until such time as the position in relation to a series of connected property investments had been resolved, and/or, even if there was an intention to create legal relations, any agreement would be void for uncertainty because none of the primary terms had been agreed.

The claim focused upon the nature of the discussions / calls in late November 2015 – the claimants served multiple statements (to include six from Mr Fulstow alone), with Mr Francis serving a single statement.

On the opening day of trial, Mr Francis’ Counsel invited the Court to strike out, of its own motion, the Claimants’ three principal statements, alternatively, inviting the Judge to give no weight to the contents having regard to non-compliance with PD57AC.

The Court observed that, with regard to the claimants’ statements: (i) they omitted a certificate of compliance from each witness, (ii) they omitted a list of documents to which the witness had been referred, (iii) one statement omitted the solicitor’s statement of compliance, (iv) two of the statements contained recitations based upon the contemporaneous documents, and (v) two of the three statements contained identical text.

The claimants had been invited to file amended statements to correct those errors before trial but had declined to do so.  Unhelpfully, for the claimants, they had included within the trial bundles substantial correspondence passing between them and their solicitors – to include that relating to the creation / refinement of the statements.  This included an ‘aide memoire’, created by their solicitor, setting out the claimants’ basic case, a number of (leading) questions to be addressed and suggested responses to be included in the statements!

The Court concluded it was plain there had been substantial non-compliance with PD57AC.  The claimants sought to rely upon further statements that had been prepared to support the claim.  However, those were also found to be materially non-compliant with the requirements of PD57AC.

Notably, the claimants’ solicitor came in for significant criticism.  The Court considered that the declaration that the witness statements were PD57AC compliant was “false” – the Court concluding there was no basis upon which the solicitor could have been satisfied “that the purpose and proper content of trial witness statements and the proper practice in relation to their preparation had been explained to the three witnesses.”

In assessing the sanction, the Court declined to strike out the statements as such a step would leave the claimants without any evidence, or would require the testimony to be given orally, thus further prolonging the trial. The Judge determined that such would not be in furtherance of the Overriding Objective (as to the appropriate use of court resources and dealing with matters in a timely manner).  Taking all matters together, the Court resolved that it would not give any weight to any uncorroborated evidence given by any of the claimants’ witnesses, since, where the contents of the statements were “not corroborated by other sources (such as contemporaneous documents), I can have no confidence that the statements are truthful”.

ILLIQUIDX LTD v ALTANA WEALTH  [2024] EWHC 2191 (Ch)

The claim concerns the business opportunity of monetising Venezuelan sovereign debt and the alleged misuse of confidential information in that context. The claimant was seeking declaratory and injunctive relief, an order for delivery up or destruction (upon oath) of articles or materials and damages.

Here, Chief Master Shuman was faced with a raft of interlocutory applications, to include as to the claimant’s possible non-compliance with PD57AC – the defendant seeking an Order preventing the claimant from relying upon two statements. Further, given the solicitor’s compliance certificate had been signed for each, the defendant wanted the solicitor to file evidence explaining how the evidence-gathering process had been undertaken.

In seeking to resist the application, the claimant argued that the defendants should not “fillet and over analyse the witness statements to find some instances of purported non-compliance.”  Whilst the Court had sympathy with that position, it noted that “Whilst over analysis of a trial witness statement for the purposes of PD57 AC as part of a tactical trial strategy should be deprecated, if trial witness statements fall into the trap of failing to follow best practice…parties run the risk of applications such as this.”

The thrust of the defendants’ application was that the two main statements demonstrated an over-reliance upon documentation, rather than comprising the witnesses’ best (independent) recollection of events.  The Court noted an indication from one witness that the statement had been prepared by refreshing memory (i) from certain emails, (ii) with a review of a telephone call, and (iii) reviewing further emails before, finally, adding his own (current) thoughts.

Mindful of the claimant’s submission that the Courts should be slow to permit the “weaponizing” of PD57AC by way of tactical, interlocutory, skirmishes, the Court could nevertheless not escape the sense that the statements “have been constructed by reference to documents. Of course, a witness can refresh their memory but the documents leading the recollection of events is what PD57AC was designed to avoid. Ultimately the court needs the best evidence from the witness, what the witness actually remembers of events, so that it can ascertain the truth through accurate fact finding”.

The Chief Master resisted the request to disallow the statements – directing that the statements be re-drafted having regard to the requirements of PD57AC – highlighting that allowing the statements to remain unchallenged would be to “dilute the practice Direction and to undermine its purpose”.

The Court also rejected the defendant’s request that the solicitor provide a statement as to the manner of compliance with requirements of the formalities – reasoning that such was unnecessary where the statements themselves were to be re-drafted.

EDESIA LAW COMMENT:-

Both cases demonstrate that meeting the requirements of PD57AC is essential – statements must reflect the recollections of witnesses, rather than be constructed by lawyers from a detailed review of the documents - and the ramifications for non-compliance are broad.

Whilst the Court in IlliquidX was reluctant to impose a draconian sanction, it nevertheless required the statements to be re-drafted – as to do otherwise would have been viewed as lessening the effect of the practice direction.

Where, however, the breaches in Fulstow were more egregious, the Court was willing to admit into evidence, but attached no weight to any parts of the statements uncorroborated by contemporaneous documents – leaving the claimants at a distinct disadvantage. The Court will, no doubt, have been alive to such a consequence when signalling its displeasure at the extent of the failures demonstrated.

Notably, both decisions stopped short of requiring the solicitors to present explanations as to the manner in which the evidence-gathering process had been conducted. Where statements are still being served without compliance with the practice direction, solicitors, and their professional indemnity insurers, must remain mindful of the adverse consequences that may arise if compliance is certified without good reason. The need to defend an Application challenging the contents of a statement could prove costly – before the time / costs of re-drafting are taken into account.  If a statement is struck out, or no weight is to be attached to it, adversely impacting a client’s prospects of success at trial – the prospect of a later negligence claim will increase significantly.