Senior judge warns experts over conditional fee agreements

Holgate: Use of a Hamid-type procedure should only be exceptional

The president of the Upper Tribunal’s Lands Chamber has warned expert witnesses that it could refer them to their professional bodies if they break the rules on conditional fees.

Sir David Holgate said experts owed the same “duty of candour” to the court as solicitors, and, following the example set by the High Court, the Upper Tribunal would if necessary require them to provide written explanations for their behaviour.

He said that it was “well known that the finite resources of courts and tribunals” were under great pressure.

“If an expert fails to declare a conditional fee arrangement from the outset of his involvement in proceedings before the tribunal, there is a clear risk of the resources of other parties and of the tribunal being wasted.”

Sir David was ruling in Gardiner & Theobald v Jackson (VO) [2018] UKUT 253 (LC), a case involving the rating of a number of properties, including an office block on Tottenham Court Road in central London.

The expert involved, Damien Clarke, head of London rating at Colliers International, was not paid on a conditional fee basis for his work as an expert witness at the Upper Tribunal or Valuation Tribunal.

However, Sir David said Colliers was entitled to a “success-related fee” if the firm secured a reduction in the properties’ liability for rates.

Although Sir David did not make any “adverse findings” about Colliers or Mr Clarke, he said the case raised concerns about independence, in that it gave the expert a “direct financial interest” in the assessment of rateable value, which could undermine the “independence and impartiality” required for the tribunal hearing.

Sir David added that the tribunal had decided to send a copy of its decision to the president of the Royal Institution of Chartered Surveyors, to see if the ruling had implications “for its practice statement, or more generally”.

In cases where there was an undeclared conditional fee agreement, he said some relief could be given to the other parties by a costs award, but that would not “address the adverse effects of delay”.

However, he said the tribunal could “consider what further action should be taken” where an expert may have abused the tribunal’s procedures through a serious failure to comply with the rules or related breach of a professional code of conduct.

“That may involve requiring a written explanation to be given by the professional concerned, holding a hearing to examine the issues involved, and referring the matter to the relevant professional body for further consideration, whether in relation to an individual case or more generally.”

Sir David said that “regrettably” this approach had been introduced in the High Court, following the ruling in 2012 of the then Lord Chief Justice, Lord Thomas, in Hamid.

Sir David said the Hamid procedure, refined this year by the High Court in Sathivel, usually involved a requirement that the person involved explained why the case should not be referred to the professional body.

“The Hamid procedure provides an opportunity for the person or practice concerned to put forward an explanation for what occurred, to identify what lessons have been learned and what action has been taken, and to give assurances about steps that will be taken in the future to prevent similar issues arising again.

“A statement of that nature may satisfy the court in some cases. A similar approach will be applied in this tribunal.”

Sir David went on: “This tribunal relies heavily on the independence, diligence, expertise and skill of the wide range of experts who appear before it.

“The great majority of these experts discharge their obligations to the tribunal impeccably. Accordingly, use of a Hamid type procedure should only exceptionally be necessary.

“However, the availability of this option, does reinforce the importance of all professional representatives and experts complying fully with their obligations to the tribunal.

“Any notion that, by way of example, the inclusion and signing of an expert’s declarations in his or her report is a mere formality, or something which may be dealt with perfunctorily, needs to be completely dispelled.”

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