Last April saw the introduction of fundamental reforms to the way trial witness statements are prepared, drafted and used in the Business & Property Courts (BPC).
The new practice direction 57AC (which supplements existing requirements in CPR 32, PD 32 and the relevant court guides) arose from criticism that witness statements were becoming over-lawyered and self-serving, often containing inappropriate commentary on documents and issues outside the witness’s knowledge. Related concerns were that statements frequently strayed into partisan arguments, and were unnecessarily long and expensive to produce.
The reforms sought to promote ‘best practice’ behaviours and restore the true purpose of factual witness statements: to set out in writing the evidence in chief that the witness would give if giving oral evidence at trial. They encourage an early focus on the factual evidence required to address the issues in dispute, and seek a clearer divorce between evidence and legal submissions.
PD 57AC restates the existing requirements in CPR 32 but goes further by requiring confirmation of compliance by the witness and certification of compliance by the legal team. Trial witness statements must contain:
- a list identifying which documents (if any) the witness has referred to or been referred to for the purpose of providing the evidence in their statement. This aids transparency over which documents were used to refresh the witness’s memory and might have influenced the evidence, and encourages minimal reference to the documents.
- a ‘Confirmation of Compliance’ signed by the witness. This confirms that the witness understands that the purpose of the statement is to set out matters of fact of which they have knowledge and not to argue points or take the court through the documents.
- a ‘Certificate of Compliance’ signed by the relevant legal representative certifying that the evidence has been prepared in accordance with PD 57AC and the new ‘Statement of Best Practice’ in the PD appendix. This requires the legal representative to explain the purpose and proper content of the witness statement to the witness and certifies that the ‘best practice’ requirements for preparing and drafting the statement were followed.
All eyes have been on what these changes mean in practice for large commercial disputes in the BPC, and what sanctions may be imposed for non-compliance. With four reported judgments since the reforms came into force, there is some clarity.
In Prime London Holdings 11 Ltd v Thurloe Lodge Ltd [2022], the most recent decision on PD 57AC, the court had to decide the appropriate sanction in circumstances where the defendant’s witness statement did not comply with PD 57AC in two respects.
First, it did not include the Confirmation of Compliance confirming the witness understood the purpose of the witness statement, that it was their personal knowledge and recollection, and they had not been encouraged by anyone to include in the statement anything that is not their own account or recollection. Second, it did not include the legal representative’s Certificate of Compliance. The defendant’s excuse was that it understood that a court order, which provided instructions for the exchange of evidence, ousted the application of the PD.
When addressing non-compliance with PD 57AC, the court has full case management powers which include the power to strike out all or part of the witness statement; to order that the witness statement be redrafted; or to order that the witness give some or all of their evidence in chief. Additionally, the court may award costs on an indemnity basis against the party in breach.
In Prime London, the court held there was no excuse for failing to comply with the formalities of the new PD and decided the appropriate sanction was to order the defendant to serve a compliant witness statement and pay related costs on an indemnity basis. It was not appropriate to apply the more draconian sanction of striking out the witness statement but the court emphasised that, in reaching its decision, it was not providing a ‘carte blanche to parties to play fast and loose with the PD’.This decision is consistent with the BPC’s earlier approach in Mansion Place Ltd v Fox Industrial Services Ltd [2021], where it ordered redactions to remove evidence which did not comply with PD 57AC, and in Blue Manchester Ltd v Bug-Alu Technic GmbH and another [2021], where it ordered that statements be revised and replaced with compliant versions. The court endorsed the judge’s comments in Blue Manchester, that striking out witness statements for non-compliance is ‘a very significant sanction which should be saved for the most serious cases’. It is unlikely to be appropriate where there is a ‘sufficient core of compliant material’ and where the non-compliance is not ‘particularly egregious’.
The BPC has amplified the importance of swiftly identifying and detailing issues of non-compliance with the opposition. In Prime London, the claimant was criticised for failing to raise the defendant’s non-compliance for almost three weeks (due to absence over Christmas); this delay was considered inexcusable for a well-resourced law firm. It also stressed the importance of approaching issues of non-compliance sensibly, encouraging parties to attempt to reach agreement on how to address it, before embarking on disproportionate and costly satellite litigation.
While lawyers are still grappling with the reforms, these decisions have helpfully demonstrated the BPC’s likely approach to addressing moderate non-compliance with PD 57AC and its expectation that parties should act swiftly and sensibly to attempt to resolve issues of non-compliance through agreement in the first instance.
In most cases, where a sufficient core of the witness statement is compliant, it seems likely the courts will require any non-compliance to be remedied through redactions or revisions to the witness statement. But we should be in no doubt: PD 57AC is there to be followed and serious non-compliance should expect to be met with the harshest sanction – strike-out.
John Bramhall is a partner and Francesca Muscutt is a senior associate and professional support lawyer at DAC Beachcroft
No comments yet