New witness evidence rules in the English Business & Property courts - tips for professionals

A new practice direction regarding the preparation of trial witness statements in the Business and Property Courts will come into force on 6 April 2021 and has implications for all accounting firms who are currently, or may become, the subject of civil claims.

The new rules, which supplement the existing rules in CPR Part 32, provide for some important changes. In this article we suggest some practical tips for professionals, when considering these new rules in practice.  

Background

The new Practice Direction 57AC and appended Statement of Best Practice ('SPB') has been produced in order to improve the efficacy and reliability of trial witness statements. Whilst some requirements will be familiar, there are some new ones which require close attention. The changes apply to trial witness statements only and not, for example, to witness statements prepared in support of an interloctutory application or for the purposes of a regulatory investigation.

The key points arising include:

1. Witness statements are to be limited to matters of which the witness has “personal knowledge”, and which are required to be determined by factual evidence.
2. Both the witness and “relevant legal representative” must sign a statement confirming that they have complied with the new Practice Direction and the SPB.
3. Documents referred to by the witness in preparation of the statement should be listed.
4. There are sanctions for non-compliance.

What does this mean in practice?

We set out below a number of practical tips and points, specifically in the context of professional negligence claims.  Some of these are specifically required by the new rules.  Others are our suggestions as to how best to comply with the new rules as a whole. 

Before the witness interview:

• Consider at a very early stage in the litigation what, if anything, should be said to witnesses regarding reviewing documents.  Different firms are likely to have different approaches to this and there is no “one size fits all”. 
• Leading up to the witness interview, the witness must be warned of the requirements of the CPR, Practice Direction, and Statement of Best Practice, as well as the wording of the confirmation they will be required to sign (SBP 3.9).
• If it has been agreed that the witness may review documents as part of their own preparation, ensure that they agree to list those documents and discuss a format or process for keeping such a record, perhaps by sending a template list (including where the document was located, type (email, pdf), date, to/from, author). 
• Don’t leave preparing the list to the end of the process – a list should be kept contemporaneously.  How this is done will depend of course on how the statements are prepared. 
• Consider sending a copy of the documents to which you will refer during the interview to the witness in advance.  This will serve as a useful record for preparing the list.  Any documents sent to the witness by email, post, secure transfer etc. in preparation of their statement, will also need to be listed.

During the interview:

• Read out the confirmation of compliance that the witness will be required to sign and discuss any questions/concerns arising (SBP 3.9).
• Use open questions as much as possible (SBP 3.11(2)).
• Refer to documents sparingly and in relation to disputed facts only.  Exercise caution when referring to documents the witness did not, or may not, have seen at the relevant time (SBP 3.4).  Consideration should be given to how it will look if certain documents are listed on a witness statement, and what questions the witness could face as a result.
• Make a full, dated contemporaneous note (SBP 3.11(3)).   This should include references to any additional documents referred to during the interview, to assist in preparing the list.
• If witnesses will only be shown documents during the interview itself, it is essential to keep a record of which documents are actually shown to the witness, perhaps using post-its and/or with the help of the note-taker. 

Drafting the witness statement:

• The lawyer may still take primary responsibility for drafting the witness statement and assist with structure, layout and scope, but the statement should be based on and not go beyond the content of the note made of the witness interview (SBP 3.13).
• The statement should include at the beginning an explanation as to how it was prepared (face to face, over the telephone, etc.) (Practice Direction 32 para 18.1(5) and SBP 3.12)
• The number of drafts should be minimised (SBP 3.8).  This may well be a natural consequence of following the other requirements of Practice Direction 57AC.
• If further detail is required, ask non-leading questions of the witness, to be answered in their own words (SBP 3.13).
• The witness must sign the Statement of Truth and Confirmation of Compliance (Practice Direction 57AC para 4.1).
• The relevant legal representative must sign the Certificate of Compliance (which should also be included in the witness statement) (Practice Direction 57AC para 4.3).

These are the main rules to be aware of, and our suggestions as to how to comply with them.  But anyone preparing a witness statement for trial under the new rules should read Practice Direction 57AC and the SBP. 

Implications for regulatory investigations

It is worth emphasising that while the new rules apply specifically to trial witness statements only,  they give rise to questions as to the interplay with statements prepared in response to regulatory investigations and questions as to whether such requirements and best practice should be followed in those cases as well, particularly where a civil claim is extant or expected.   

If regulatory proceedings are running alongside a civil action then by far the simplest way to address this issue would be to prepare both statements in accordance with the requirements of the new Practice Direction and Statement of Best Practice (or, if applicable to the situation, use the same statement for both the regulatory proceedings and the civil action). This approach should be less likely to result in any suggestion in the civil action that best practice has not been followed.  It should also make it easier for both the witness and legal representative to sign the statements of compliance.  However, how realistic a prospect this approach is in practice is far from clear at this early stage and will vary from case to case.

Of course, such an approach will not be possible in circumstances where regulatory statements have already been prepared at an earlier stage, without following the new rules. What a witness has been made aware of during the preparation of an existing statement cannot of course be undone, so it is then necessary to consider what documents need to be listed in the civil statement, and whether it will be necessary to apply to dispense with the certificates of compliance.

It may be possible to explain the circumstances in which the regulatory witness statement was prepared, a copy of which could be exhibited to the civil statement. 

Provided any departure from best practice can be properly justified on the basis of the requirements and/or nature of the regulatory action, then the witness should be much less likely to be the subject of criticism and/or adverse inferences than where best practice has simply not been followed. 

It is important to note that the new rules suggest transparency is key, and this should always be at the forefront of thinking when preparing witness statements.