Witness statements: Indemnity costs for breach of PD 57AC

The High Court judgment in McKinney Plant & Safety Ltd v The Construction Industry Training Board [2022] EWHC 2361 (Ch) provides further guidance on how parties should approach witness statements which fail to comply with the rules of Practice Direction 57AC (PD 57AC).

Background

PD 57AC, which came into effect on 6 April 2021, regulates the contents of witness statements for use in the Business and Property Courts. It provides that witness statements should not argue points in the case, narrate the contents of documents, or comment on other evidence (e.g. other witness statements). Instead, PD 57AC instructs that witness statements should be limited to setting out matters of fact which are disputed and of which the witness had personal knowledge. PD 57AC has also introduced a mandatory certificate of compliance, which must be signed by both the witness and the relevant party’s solicitor before a witness statement can be served.

Since PD 57AC has been operative, a number of applications have come before the courts asserting non-compliance with PD 57AC. Although the courts’ approach to such applications is still developing, the courts seems increasingly inclined to discourage “satellite litigation” relating to compliance with PD 57AC where the issue could be left to the trial judge. McKinney Plant is an example of this balancing act.

Facts of the case

McKinney Plant concerned a supplemental witness statement filed by the claimant. The claimant initially accused the defendant of “nit-picking” when the defendant raised concerns about the statement’s compliance with PD 57AC, and refused to engage on the issue. At the pre-trial review (PTR), the parties indicated that they were content for the allegations of non-compliance to be addressed by the trial judge in due course. Interestingly, despite this, the judge raised the issue at the PTR under the court’s case management powers in CPR 3.3; he had reviewed the statement as part of his prep for the hearing and became concerned that debates about the statement could impact on an already tight trial timetable.

The parties were ordered at the PTR to provide written submissions addressing the statement’s compliance with PD 57AC so that the issue could be dealt with on the papers. The defendant alleged, and the Court subsequently agreed, that the original statement breached the rules of PD 57AC in almost every respect. In particular:

1. The witness commented extensively on evidence that was not available to him at the relevant time, and provided principally narrative commentary on the evidence that would have been available to him at the time.
2. The statement contained extensive submissions.
3. The witness criticised the defendant’s witness evidence and disclosure.
4. The certificate of compliance was not signed by the witness and legal representative until two weeks after the date of the statement.

In its written submissions to the Court, the claimant acknowledged that only seven out of 102 paragraphs in the statement complied with PD 57AC. The claimant indicated that it would seek relief from sanctions and purported to serve a substantially amended version of the statement.

The Court’s approach

The Court granted permission to the claimant to serve the amended statement. The defendant then asserted that the amended statement still failed to comply with PD 57AC. However, this time the Court stated that, as the alleged non-compliance was not “readily apparent” and would require reference to other evidence, the issue should be handled by the trial judge. In doing so the Court applied the approach adopted in Lifestyle Equities CV v Royal County of Berkshire Polo Club Ltd [2022] EWHC 1244 (Ch) and confirmed in Curtiss v Zurich Insurance & Anor [2022] EWHC 1514 (TCC). 

Indemnity costs were awarded against the claimant due to both the seriousness of its breach and its refusal to engage with the defendant on the issue before the Court’s involvement.

On the procedural issue regarding the revised witness statement, the Court noted that parties have no right to file a revised statement without an order to do so. However, it is unnecessary for parties to apply for relief from sanctions where there is potential non-compliance with PD 57AC. Instead, the correct procedure is for the party alleging a breach of PD 57AC to make an application to exclude or limit the non-compliant evidence. The Court will then direct the parties on how to remedy any breach (e.g. by filing a revised statement).

Key takeaways

Following on from Lifestyle Equities and Curtiss, this judgment is another strong indication that only the most egregious examples of non-compliance with PD 57AC will be considered by the courts pre-trial. In this instance, the Court only stepped in due to the potential impact on a tight trial timetable and “significant concerns” about the relevant statement. 

The courts are clearly concerned about the potential for a cascade of applications from parties attempting to use PD 57AC for strategic advantage. Parties are to be discouraged from making interim applications to exclude/limit witness evidence unless the alleged breach is so severe that it cannot be left to the trial judge. Instead, parties should first seek to resolve disputes over compliance by mutual agreement where possible. The indemnity costs award made against the claimant is instructive. It demonstrates the need for any party accused of non-compliance with PD 57AC to act reasonably and engage with criticism at an early stage.

Finally, solicitors should note the Court’s comment that it is the responsibility of the legal representative who signed the statement’s certificate of compliance to articulate why that statement complies with PD 57AC. Solicitors should be familiar with the rules of PD 57AC else they may find themselves compelled to explain any errors directly to a judge.