CASE UPDATE: A V B [2020] EWHC 809 (TCC)
This article is a short blog update on the Technology and Construction Court decision of A v B [2020] 809 (TCC) (“A v B”), where the Technology and Construction Court dealt with the issue of whether an independent expert’s paramount duty to the court / tribunal is inconsistent with an additional duty of loyalty to the independent expert’s duty of loyalty to the client.
Salient facts. The key facts are summarised below:
1. The claimant is a developer of a petrochemical plant ([3] A v B).
2. The claimant entered into agreements with third party group companies in connection with the project ([4] A v B).
3. A dispute arose between the claimant and its contractors for construction of the faciltiies for the project ([6] A v B).
4. The claimant approached the first defendant with a view to engaging it to provide expert services. A confidentiality agreement was signed ([8] A v B), and the first defendant was subsequently engaged ([11] – [12] A v B).
5. The third party commenced ICC arbitration proceedings against the claimant ([13] A v B).
6. The defendants were approached by the third party to provide quantum and delay expert services in connection with the arbitration ([14] A v B), which was subsequently expanded to include expert witness services ([19] A v B).
7. The claimant subsequently issued an application to restrain the defendants from acting as experts for the third party in the arbitration proceedings ([2], [26] A v B).
The fiduciary duty issue – The Parties’ position. As stated that [37] – [38] A v B, the claimant’s claim for relief is based on “fiduciary duties said to arise out of the contract of engagement … the engagement of the defendants to provide expert services gives rise to a fiduciary duty of loyalty”, which the defendants were alleged to have breached by agreeing to provide expert services to the third party.
The defendants took the position as summarised at [39] A v B, that “… independent experts do not owe a fiduciary duty of loyalty to their clients. Such duty is excluded by the expert's overriding duty to the tribunal.”
The fiduciary duty issue – The Court’s decision. The court disagreed with the defendants, holding at [53] A v B that “… as with counsel and solicitors, the paramount duty owed to the court is not inconsistent with an additional duty of loyalty to the client. … there is no conflict between the duty that the expert owes to his client and the duty that he owes to the court.”
The court proceeded to find that given the scope of the engagement as set out in [54] A v B, including the fact that the first defendant was “engaged to provide extensive advice and support for the claimant throughout the arbitration proceedings”, a fiduciary duty of loyalty arose, which per [55] – [57] A v B was not limited to the individual concerned but extended to the defendant group as a whole.
In this regard, the court rejected the characterisation that the defendant group should be treated in the position of barristers at [58] A v B, and emphasized, in particular, that “… it is common knowledge that barristers are self-employed individuals working from sets of chambers and that different barristers from a set of chambers may act on opposing sides. In this case, the defendants did not inform the claimant that they might take instructions to act both for and against the claimant in respect of the dispute. If they had done, the claimant would not have instructed the defendants. That is clear because when the defendants asked whether the claimant objected to it acting for the third party on this dispute, the claimant objected.”
The court proceeded to find at [60] – [61] A v B that the defendants have breached their fiduciary duty. It is important to note that the court stated that the “fiduciary duty of loyalty is 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.”
The court then exercised its discretion at [62] – [65] A v B to continue the interim injunction to restrain the defendants from providing expert services to the third party in connection with the arbitration.
Conclusion. A v B is important as it makes clear that an independent expert’s overriding duty to the court / tribunal is not inconsistent with the fiduciary obligation of loyalty owed to his or her client. While this may seem trite, it is useful for experts to remind themselves that even though their paramount duty is to the court / tribunal, there are other duties that they owe, including fiduciary obligations which, as the court stated, cannot be simply discharged by putting in measures to preserve confidentiality and privilege.
Tags: Experts; Independent Experts; Fiduciary Duty; Duty of Loyalty; Duty to Court / Tribunal; Whether duty to court is inconsistent with fiduciary duty of loyalty
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