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R Factortame Limited & Others v Secretary of State for Transport, Local Government and the Regions (number 8), Court of Appeal

9 July 2002
The issues

Expert evidence – contingency fee – expert having financial interest – champerty.

The facts

Grant Thornton, a firm of Accountants, entered into an agreement in July 1998 with the Claimant’s Factortame Limited, whereby Grant Thornton advised Factortame in connection with litigation in return for 8% of the damages. The issue arose as to whether or not that contract was champertous and therefore unenforceable.

The decision

1. The Court considered the decision in Field -v- Leeds City Council (Surveyor employed by City Council allowed to give evidence in a housing disrepair claim against tenants who sued the City Council) with approval and Liverpool Roman Catholic Arch Diocesan Trustees -v- Goldberg (expert called on behalf of a party who was a long-standing friend), in which latter case, they believed the Judge had fallen into error in taking the view that he had necessarily to exclude the expert evidence.

2. In any individual case, it was necessary to see if the agreement tended to conflict with public policy and in particular, with regard to the interests of the Defendant. Conditional Fee Agreements were now permitted by Section 58 of the Courts and Legal Services Act 1990 and as amended by the Access to Justice Act 1999. That Section did not apply to the provision of services which were ancillary to the conduct of litigation. However, it was an indication of a radical shift in public policy. Conditional fees were permitted to increase access to justice. They were aimed at ensuring that those without resources could fund claims which deserved to be funded.

3. For an expert to act on a contingency basis, was to give the expert a significant financial interest in the case. Such an interest generally was highly undesirable and it would be rare that the Court would consent to an expert being instructed under a Contingency Fee Agreement.

4. In this case, Grant Thornton had not acted as experts but had funded independent experts. Having regard to that fact, and the shift in public policy and the fact that liability had already been decided when Grant Thornton were instructed and that they had had no part to play on the issue of liability before the House of Lords, the agreement was not in these circumstances champertous.

5. Where there was doubt as to the status of evidence, the issue should be presented to the Court at Case Management and at the earliest possible stage so that if expert evidence was to be excluded, any further necessary Directions could be given.

Comments

Experts tempted by Contingency Fee Agreements should beware the words of the Court of Appeal%u2026 “%u2026 the threat to his objectivity posed by a Contingency Fee Agreement may carry greater dangers to the administration of justice than would the interest of an Advocate or Solicitor acting under a similar agreement. Accordingly, we consider that it will be in a very rare case indeed that the Court will be prepared to consent to an expert being instructed under a Contingency Fee Agreement”.

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