When Mr Justice Andrew Baker pinged over his judgment in a £1.5m tax fraud case last month, the lawyers involved must have opened the email with some trepidation.
The judge, who chairs the witness evidence working group, had already demanded that the parties go through their bulging witness statements and highlight all the passages that were actually being relied on as factual evidence. When he then insisted on being given fresh copies, with only these highlighted passages included, the statements had shrunk by nearly half, down from 157 pages in total to around 80 pages.
That probably gave the lawyers an inkling that they may be in for some criticism. And they were right.
Ruling in Skatteforvaltningen (The Danish Customs And Tax Administration) v Solo Capital Partners LLP & Ors  EWHC 1624 (Comm), Baker lambasted the ‘content and length’ of the statements. He said they were largely not witness evidence at all, but argument. ‘The parties have therefore expended the time and effort, at no doubt very considerable cost, to argue the summary judgment application twice over, once in writing through the solicitors’ witness statements, then again at the hearing,’ he observed with furrowed brow.
The parties have therefore expended the time and effort, at no doubt very considerable cost, to argue the summary judgment application twice over
‘Far too much time will have been spent on the pre-hearing stages of this application, on both sides, at expensive hourly rates, because of the approach adopted by [co-defendant] Goal, and joined in enthusiastically by [the claimant], to treat the exchange of evidence for the application as an opportunity to (try to) argue the application out between the legal teams, on paper, before then arguing it out, this time properly, before the court at the hearing; further exacerbated… by a failure to assess whether or to what extent factual witness evidence was reasonably called for at all,’ the judge griped.
All this accords with a view expressed by the witness evidence working group, in its report published last December, that judges should be ‘singling out’ and criticising ‘egregious’ cases more often, to encourage compliance with the rules. We have seen this trend in other recent cases, such as the tough line taken on lengthy witness statements by Mr Justice Waksman in PCP Capital Partners LLP and PCP International Finance Limited v Barclays Bank plc  EWHC 646 (Comm) in March.
But while judges are being encouraged to take a tough line on witness statements that fail to conform to the rules, we are still waiting for real action to address the root of the problem. Why do so many litigators overfill their witness statements by stuffing in references to the broader factual case, the legal arguments and the relevant documents? Because they have nowhere else to put them. Skeleton arguments are too space-constrained to do the job – though it is worth noting that in Skatteforvaltningen, Baker did considerably extend the permitted skeleton page limit – and litigators struggle with the lack of a proper place to set out their full factual narrative, and what it is based on, early on in proceedings. So how can this problem be fixed?
The witness statements working group has mulled over one possible solution: a pre-trial ‘statement of facts’ which would be served early on in the case, after disclosure and at the same time as witness statements. This detailed narrative could set out each party’s factual case, and the evidential basis for it, eradicating the need to artificially shoehorn this into a witness statement, which could be confined to its proper role. The downside (as with virtually every civil justice reform of the past few decades, it seems) is that it would frontload costs. But on the plus side, it could promote early settlement and help with good trial management. It would certainly be useful reading for the judge.
Sadly, the working group itself was at odds over whether or not this statement of facts should be brought in. A slim majority supported it ‘in some cases’. The result is that the group’s December report merely recommended that individual courts within the Business and Property Courts jurisdiction should ‘give further consideration’ to requiring a statement of facts. Nothing stronger than that.
All this will be considered at a commercial court users’ group seminar in September, with the potential for action by the Civil Procedure Rule Committee by the end of 2020 or in early 2021.
In the meantime, litigators will have to try to square the circle of the current rules as best they can. If they get it wrong, they can expect to be singled out as a warning to others.
Rachel Rothwell is editor of Gazette sister magazine Litigation Funding, the essential guide to finance and costs (www.lawgazette.co.uk/litigation-funding). For subscription details, tel: 020 8049 3890