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16 August 2006

Five things you need to know ... expert witnesses in the Federal Court

“The expert reports, at least on competition and market issues, often seem to spend a lot of time dealing with economic issues, then they go on and deal with sometimes the experience of the experts in this jurisdiction, sometimes other jurisdictions, sometimes they go on and deal with the evidence, which is very interesting, except what they have to say is probably of limited value on the evidence, since I am the one that is going to have to make some findings.” 1

In the long running C7 proceedings, more than 25 expert reports of economists, accountants and others have been filed. Objections have been raised to substantial parts of that evidence and the Court has already handed down two judgments rejecting the tender of certain expert evidence. Here are five things that you need to know about briefing expert witnesses in the Federal Court.

1. The expert’s opinion must be based on particular, specialised knowledge

Section 79 of the Evidence Act 1995 (Cth) provides a specific exception to the opinion rule (that is, the rule that evidence of an opinion about the existence of a fact is not admissible to prove that fact’s existence) for witnesses giving evidence of an opinion that is wholly or substantially based on specialised knowledge.

In the Sebel case, Justice Allsop explained that:

“the Court must be able to understand whether the expert is, or the extent to which the expert is, drawing upon any particular, and if so, what, training, study, expertise or experience, which he or she may have in respect of any particular opinion. A discursive discussion by an intelligent expert (from a particular field or discipline) who is well endowed with intelligence, insight and common sense, may help someone unravel a problem in another field of expertise or discipline; but, he or she will not be proffering opinions on that subject matter that will be either helpful or admissible as evidence in Court.” 2

The Courts have accepted economics as an area of expertise and the role of economists in providing expert evidence in relation to competition law matters. That is not to say that economists are “experts” with respect to all matters they may choose to talk about in their reports. Indeed, some of their evidence may not be expert opinion evidence. For example, an economist may have relevant first hand knowledge of relevant facts and, if so, can give evidence of those facts.

2. An expert witness must be impartial

An expert witness has a duty to the Court to assist it on matters relevant to the expert’s area of expertise. That duty is paramount and an expert witness should not be an advocate for the party retaining him or her.

In the Sebel case, Justice Allsop drew a distinction between expert opinion and expert assistance. He stated that the “discursive body of views” contained in the expert accountant’s report would have assisted the respondent’s lawyers in analysing and preparing the case and in marshalling and formulating arguments but that they did not amount to a report containing accounting opinions, or any other opinions, based on relevant expertise. His Honour stated that the obtaining of the expert’s views:

“is the legitimate, accepted and well known role of expert assistance for a party preparing and running a case. Expert evidence in which a relevant opinion is given to the Court drawing on a witness’ relevant expertise is quite another thing. There is no ethical reason why it cannot be given by the person providing assistance, as long as that person and the legal advisers understand and recognise the difference between the two tasks, and keep them separate.” 3

3. An expert witness must comply with the Federal Court guidelines for expert witnesses

The Federal Court requires any person providing an expert report, or giving expert evidence, to comply with its Guidelines for Expert Witnesses in Proceedings in the Federal Court of Australia (Guidelines). The Guidelines do not exhaustively address all aspects of an expert witness’ duties but are designed to assist experts to understand, in general terms, what the Court expects of an expert witness who is giving opinion evidence. The Guidelines cover the witness’ general duty to the Court, the form of the expert evidence, and the experts’ conference. The Guidelines can be found at http://www.fedcourt.gov.au/how/prac_direction.html

4. Australian courts are reluctant to accept the evidence of international witnesses who have limited experience in the relevant Australian market

In several cases over the last few years Australian judges have expressed concern about the ability of international expert witnesses to give evidence in relation to Australian markets or the conditions prevailing in particular Australian industries. In the C7 litigation, Justice Sackville recently stated that “[t]he apparent absence of substantial experience in or knowledge of Australian pay television is not a trivial matter.” 4

And in the Universal Music case Justice Hill stated :

“One possible difficulty in reconciling the competing views or choosing between them which did become apparent was that much of [the Professor’s] evidence was coloured (I use that word without any disrespect to [the Professor]) by his US antitrust experience. While there is considerable similarity in antitrust concepts used in the US and the trade practices concepts adopted in Australia, the context could be important.”5

5. A Court may direct expert witnesses to meet in an attempt to resolve their differences

In trade practices litigation, a Court will often direct the expert witnesses to meet and produce a document setting out those issues on which they are in agreement and those in respect of which they disagree. The Court is also able to direct that evidence be given “concurrently” by experts with the experts for each party in Court under oath simultaneously. This process is sometimes referred to as a “hot tub”.

The Guidelines provide that it would be improper conduct for an expert to be given or accept instructions not to reach agreement with another expert or experts at a meeting arranged at the direction of the Court. The Guidelines also provide that if, at a meeting directed by the Court, the experts cannot reach agreement about matters of expert opinion, they should specify their reasons for being unable to do so.

Finally, is important to remember that an expert witness can do no more than give evidence. While that evidence can provide the judge with the necessary criteria or framework to test their own conclusions, ultimately it is the Court that must apply the relevant principles to the particular facts.

1 Seven Network Limited v News Limited, Transcript, 26 April 2006 at T6602

2 Evans Deakin Pty Ltd v Sebel Furniture Ltd [2003] FCA 171 at [671].

3 Evans Deakin Pty Ltd v Sebel Furniture Ltd [2003] FCA 171 at [676]

4 Seven Network Limited v News Limited (No 15) [2006] FCA 515 at [25].

5 Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (2001) 201 ALR 502 at 579.