Friday, 4 June 2021

Dana UK AXLE Ltd v Freudenberg FST GmbH

[2021] EWHC 1413 (TCC)

This was a claim arising out of the alleged premature failure of pinion seals manufactured by FST and supplied to Dana during a period between about September 2013 to February 2016. The seals were fitted by Dana, a manufacturer and supplier of automotive parts, onto vehicle rear axles which Dana then supplied to Jaguar Land Rover for installation onto nine different vehicle models. On Day 7 of the trial, Dana applied to exclude FST’s technical expert evidence. At the Pre-Trial Review (PTR), Dana had pointed out a number of defects in FST’s technical expert reports, including that:

(i) Contrary to paragraph 55 of the Guidance for the Instruction of Experts in Civil Claims 2014, none of the three technical expert reports FST identified the documents on which the expert had relied. There was reference to academic texts, but no list of the documents provided by FST or its solicitors. There was concern that material containing technical information had been made available to FST’s experts long before it had been provided to Dana’s experts.  

(ii) It was apparent from the reports that two experts visited FST factories, without notice to Dana, thereby not giving Dana’s experts a similar opportunity to inspect FST’s operations. 

(iii) When referring to data or other information, the reports of FST’s experts did not always reference the document or source of data relied upon, thereby causing prejudice to Dana’s legal team in trying to read and understand those reports. 

At the PTR, an order was made permitting FST to rely upon the reports provided that they complied fully with the CPR.

At the trial, the Judge decided to exclude the evidence of the FST experts. First, FST had failed, in breach of the PTR order, to provide full details of all the materials provided to the experts, whether by FST or its lawyers. There was no detail of any factual information provided orally by FST and no list of all the documents which had been provided to the experts. Further: “the experts had unfettered and unsupervised access to the Defendant’s personnel” and were provided with information by FST during calls and virtual meetings. However, there was no record of any of these calls or meetings. 

This always matters, and here it mattered because it appeared that the FST experts were seeking (and receiving) guidance and approval from FST’s in-house technical team on the content of their reports, which went beyond contact limited to providing logistical assistance by locating documents or technical information. The Judge noted that:

“It is essential for the Court to understand what information and instructions have been provided to each side’s experts, not least so that it can be clear as to whether the experts are operating on the basis of the same information and thus on a level playing field. Experts should be focussed on the need to ensure that information received by them has also been made available to their opposite numbers.”

Where experts liaise directly with their clients to obtain information which is not recorded: “there can be no transparency around the information to which they have been privy and no equality of arms with their opposing experts of like discipline.”

The Judge also said that it was: “entirely unacceptable for Dana and the Court to discover, during the course of the trial, that FST’s experts had not only engaged in site visits about which they did not inform Dana’s experts at the time and, in respect of which, they have apparently kept no records, but also that there were, in fact, more site visits than had previously been disclosed in their reports.”

This led the Judge to comment that it was: “difficult to come to any conclusion other than that the guidance in the TCC Guide at 13.3.2 as to the need for experts to ‘co-operate fully’ with one another, including in particular ‘where tests, surveys, investigations, sample gathering or other technical methods of obtaining primary factual evidence are needed’ has been ignored.” The Judge went on to comment on further conduct on the part of FST and the experts beyond the failure to comply with the PTR Order, identifying the following breaches: 

(i) There was a “free flow exchange” of information between the experts and FST’s employees, through email exchanges, telephone and video conferences and at site visits, apparently with no, or very little, oversight from the legal team. This went beyond “logistics” and it was inevitable that the experts were privy to information that was not shared with Dana’s experts.

(ii) This flow of information continued during the period between the joint expert meetings and the signing of the experts’ joint statement and the FST experts ultimately relied on information provided by FST at this time in the joint statement and in their reports. Paragraph 13.6.3 of the TCC Guide makes it clear that legal advisers should not be involved in the negotiating or drafting of joint statements, and the Judge said that it must  follow that the same prohibition applies to the parties. 

(iii) The experts’ analyses and opinions appeared to have been  directly influenced by FST. The Judge said that: “Truly independent experts paying proper attention to their duties would not have attended site visits without first informing their opposite number … and would not have felt comfortable receiving extensive information from their clients to which their opposite numbers were not privy.”

The Judge concluded that:

“The establishment of a level playing field in cases involving experts requires careful oversight and control on the part of the lawyers instructing those experts; all the more so in cases involving experts from other jurisdictions who may not be familiar with the rules that apply in this jurisdiction. For reasons which have not been explained, there has been no such oversight or control over the experts in this case.

The provision of expert evidence is a matter of permission from the Court, not an absolute right (see CPR 35.4(1)) and such permission presupposes compliance in all material respects with the rules ... the use of experts only works when everyone plays by the same rules. If those rules are flouted, the level playing field abandoned and the need for transparency ignored, as has occurred in this case, then the fair administration of justice is put directly at risk.”

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