Practice Direction 57AC in practice

Marion Smith QC, Joe-han Ho, Ruth Keating and Philippe Kuhn examine the latest court ruling on PD 57AC.

The question in respect of PD 57AC was whether it would ultimately mean reform or revolution, as explored in our previous post [1]. As outlined in that post, the courts have already given guidance on PD 57AC in two cases: (i) a decision in the Commercial Court of Sir Michael Burton in Mad Atelier International BV v Manes; [2] and (ii) a decision in the TCC of O’Farrell J in Mansion Place Ltd v Fox Industrial Services Ltd. [3]

The latest guidance provided by the courts can be found in Blue Manchester Ltd v Bug-Alu Technic GmbH and another [4] (“Blue Manchester”). In Blue Manchester, although the application to strike out the second defendant’s witness statements for non-compliance with PD 32 and PD 57AC failed, the court did offer some of the most detailed guidance we have seen yet on PD 57AC.

Summary of previous guidance

Before considering Blue Manchester, it is worth considering the guidance on PD 57AC which has already been provided in two other judgments:

• In Mad Atelier International BV v Mr Axel Manes, Sir Michael Burton CBE (sitting as a Judge of the High Court) held that PD 57AC does not change the law as to admissibility of evidence or overrule previous authority as to what may be given in evidence, albeit that it was “obviously valuable in addressing the wastage of costs incurred by the provision of absurdly lengthy witness statements merely reciting the contents of the documentary disclosure and commenting on it” (at [10]).
• In Mansion Place Limited v Fox Industrial Services Ltd O’Farrell J provided a helpful summary at [22]–[38] of the relevant rules for trial witness statements as found in PD 32 and PD 57AC. O’Farrell J reiterated that: “[t]he purpose of the new Practice Direction is not to change the law as to the admissibility of evidence at trial”.
• O’Farrell J went on to provide useful guidance at [49]–[50] where a dispute as to compliance with PD 57AC arises between the parties. As per that guidance, the parties are encouraged to reach agreement, failing which they should make an application, which might be determined on the documents or at a hearing, but in such a way as “does not cause disruption to trial preparation or unnecessary costs”. She noted that: “[t]he court does not wish to encourage the parties to engage in satellite litigation that is disproportionate […]. Often, the judge will be best placed to determine specific issues of admissibility of evidence”.

Blue Manchester Ltd v Bug-Alu Technic GmbH and another

The matter came before His Honour Judge Stephen Davies sitting as a High Court Judge. He decided not to strike out paragraphs of various trial witness statements that did not comply with the requirements for witness statements. He did order that the statements be revised. He considered previous authority and gave further guidance regarding PD 57AC.

The issue and the decision

The claimant applied to strike out paragraphs of the second defendant’s trial witness statements which, it contended, did not comply with the provisions of: (a) PD 32 – Evidence; or (b) PD 57AC – Trial witness statements in the Business and Property Courts.

Importantly, the Judge highlighted at [44] that the very significant sanction of strike out should be reserved for the most serious of cases. The Judge also added that he was mindful that these witness statements were: “almost certainly prepared, and in one case signed, before PD57AC came into force. That is not an excuse, since those practising in the Business and Property Courts were, or should have been, aware of PD57AC for many months before it came into force, and since there was a sensible agreement between the legal representatives under which SHA’s solicitors agreed to provide re-drafted witness statements which were compliant, insofar as any were not, in order to avoid the need for the application. These points are, however, mitigation.”

At [45] HHJ Stephen Davies concluded that the proportionate solution was to impose an “unless sanction”. The effect of which would be to “bite in relation to any individual sections of the individual witness statements which remain non-compliant in a non-trivial way”.

This is relevant context for the judgment. Practitioners should be comforted by the pragmatic approach taken. However, patience will at some point run out and so it is important that those practising in the Business and Property Courts are aware of how PD 57AC is intended to be put into practice.

What does Blue Manchester mean for witness statements and PD 57AC?

HHJ Stephen Davies noted the following:

• Listing the documents: Paragraph 3.2 of PD 57AC requires a witness statement to “identify by list what documents, if any, the witness has referred to or been referred to for the purpose of providing the evidence set out” in the statement. As per [32], the solicitors in this case took the decision to serve a composite list of documents which did not separate out the documents to which each individual witness had been referred to and none of the witness statements actually referred to the list. The Judge held that it was not acceptable “for a list which is not even referred to in the witness statement simply to accompany the witness statement. Whilst there may be cases where a composite list could be justified, that would be the exception rather than the rule”. Practitioners should therefore generally avoid this approach of a composite list.
• Beware the identically worded statement: As HHJ Stephen Davies warned at [25], “a number of the witness statements contain identical or very similar statements in respect of particular issues. It is difficult to see in my judgment how this could ever occur if the requirements of PD57AC are conscientiously complied with”. The Judge went on to choose an example from two witness statements and noted the strong similarities in the wording used. He emphasised that the fact that a legal representative is permitted to take primary responsibility for drafting a witness statement does not justify departing from the clear requirement that the witness statement should, where practicable, be in the witness’s own words.
• Make the source of the information clear: Again the court was at pains to emphasise that it should be clear where evidence comes from – whether that be from the witness’s own knowledge, unaided recollection or whether the witness has been referred to contemporaneous documents. At [27]–[29] the Judge cited examples of where one particular witness statement had failed to do this. He added: “I am prepared to accept that it is possible to make an educated guess that if Mr Green was asked about this paragraph he would say that is made from some combination of his own general recollection of events […] and his having been referred to SHA’s contemporaneous project documents […]. However, if PD32.18 and PD57AC are followed conscientiously, it ought not to be necessary for anyone reading this part of this witness statement to have to make an educated guess.” The message for practitioners involved in the drafting of such statements is this: where possible make it clear what the source of information is.
• No carte blanche for comment: HHJ Stephen Davies re-emphasised the importance of a witness not including opinion evidence or argument. He went on to clarify that this is the case, even where allegations are made in a professional negligence claim or otherwise (at [42]). He did not accept that such circumstances would give “carte blanche to disregard PD32 or PD57AC by replying to the allegations in a way which includes argument, comment, opinion and/or extensive reference to or quotation from documents”.
• Avoid reciting correspondence: Previously witness statements would often recite a list, or something similar, of the correspondence between the parties. Caution should be exercised on carrying out this exercise in witness statements moving forward. As the Judge emphasised at [38], one witness statement could fairly be said to be “a classic old style narrative recital of and extracts from a series of meeting notes and correspondence”. However, the Judge went on to say that in the absence of any basis for considering that the content of the discussions was relevant, it could not be said that any of that section met “the test of necessity”, paragraph 3.4 of the PD providing that: “A trial witness statement should refer to documents, if at all, only where necessary.” This was, in his view, a very good illustration of lawyers needing to be prised away from the comfort blanket of feeling the necessity of having a witness confirm a thread of correspondence, because otherwise it might in some way disappear into the ether or be ruled inadmissible at trial. This of course is different to a witness providing additional “relevant” evidence about what a witness thought or said or did at the time in response to these meetings and emails. However, that is not what had been done in this case.
• Identify and deal with important disputed facts with particular care: The obligation to state how well the witness recalls the matters addressed and providing details of documents used to refresh memory in respect of “important disputed matters of fact”, is an important requirement. HHJ Stephen Davies did not accept that a witness could “rely on her own subjective view of what is important to avoid compliance”. The court can intervene where it is plain that a fact “on any objective analysis” is important, at [40]–[41].
• Avoid trench warfare: As the Judge stated at [10], those “who indulge in unnecessary trench warfare in such cases can expect to be criticised and penalised in costs”.

Very helpfully the Judge has included an appendix at the end of his judgment which divides four statements into their respective paragraphs and comments whether: (i) any changes are needed; (ii) the paragraph is compliant; or (iii) redrafting required. This appendix is a practical tool for all those assisting in the drafting of witness statements.

Concluding remarks

One of the main obstacles to the effective implementation of PD 57AC is breaking from habit. As is clear from Blue Manchester, lawyers need to make that break now.

As the Judge noted at [10] of Blue Manchester, “it is to be hoped that as PD57AC becomes more familiar to practitioners and as the principles become clearer such heavily contested, time-consuming and expensive applications become the exception rather than the norm”. Blue Manchester is the third instalment of the courts familiarising court users with PD 57AC. Unless certain old habits do now die, it will not be the last.

Marion Smith QC, Joe-han Ho, Ruth Keating and Philippe Kuhn are barristers at 39 Essex Chambers.

[1] See also our webinar on the topic.

[2] [2021] EWHC 1899 (Comm); [2021] 1 WLR 5294.

[3] [2021] EWHC 2747 (TCC).

[4] [2021] EWHC 3095 (TCC).