High Court: Experts owe clients “fiduciary duty of loyalty”

O’Farrell: Obligation covered whole group

Expert witnesses owe a fiduciary obligation of loyalty to their client and it is not satisfied simply by putting in place measures to preserve confidentiality and privilege, the High Court has ruled.

Mrs Justice O’Farrell – who took over last month as judge in charge of the Technology and Construction Court – said such a fiduciary must not place themselves in a position where their duty and interest may conflict.

She was ruling in A v B [2020] EWHC 809 (TCC), where the claimant developer of a petrochemical plant instructed the first defendant expert to advise on an arbitration dispute (called the works party arbitration).

The defendants – all part of the same group of companies – were then instructed by a third party to act in a separate but related arbitration against the claimant (called the EPCM arbitration). The claimant obtained an interim injunction to prevent the defendants from acting in the EPCM arbitration and sought to continue it.

The defendant argued that experts did not owe a fiduciary duty of loyalty to their clients, because it would be inconsistent with their independent role.

The judge said the authorities did not support this proposition: “As a matter of principle, the circumstances in which an expert is retained to provide litigation or arbitration support services could give rise to a relationship of trust and confidence.

“In common with counsel and solicitors, an independent expert owes duties to the court that may not align with the interests of the client. However, as with counsel and solicitors, the paramount duty owed to the court is not inconsistent with an additional duty of loyalty to the client.

“As explained by Lord Phillips in Jones v Kaney, the terms of the expert’s appointment will encompass that paramount duty to the court. Therefore, there is no conflict between the duty that the expert owes to his client and the duty that he owes to the court.”

O’Farrell J said the arbitrations were “concerned with the same delays and there is a significant overlap in the issues”.

While the first defendant was engaged to provide expert services in connection with the works package arbitration, “it was also engaged to provide extensive advice and support for the claimant throughout the arbitration proceedings”.

The judge continued: “In those circumstances a clear relationship of trust and confidence arose, such as to give rise to a fiduciary duty of loyalty.”

Where such a fiduciary duty of loyalty arose, it was not limited to the individual concerned, but also to the firm and may extend to the wider group. That was the case here, with the defendant group managed and marketed as one global firm, and dealing with conflicts in a common way.

The judge stressed that the fiduciary obligation of loyalty was not satisfied simply by putting in place measures to preserve confidentiality and privilege.

“Such a fiduciary must not place himself in a position where his duty and his interest may conflict.” (Her emphasis.)

Given the overlap between the two arbitrations, there was “plainly” a conflict of interest for the defendants and O’Farrell J ruled the claimant was entitled to a continuation of the interim injunction pending a trial of the matter.

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