Role of the Expert in Rent Review Proceedings - Essay Example

Role of the Expert in Rent Review Proceedings Ma’am/Sir: You have requested us to assess the consistency in the role of the expert in rent review proceedings with requirements spelt out under part 35 of the CPR.1 In this connection, I draw your kind attention to the views of Lord Bingham, who on the subject of expert witnesses, has stated, “there has been an extraordinary glut of decisions, clearly demonstrating the importance which litigating parties attach to issues concerning expert evidence…..secondly, the decisions of the Courts show that the rules are making a demonstrable impact on practices and habits of thought which were once tolerated but no longer are.”2 The veracity of this statement is supported as follows: As spelt out in the Practice Directions, Part 35 of the CPR is intended to limit the use of oral expert evidence to that which is “reasonably required” and Court’s permission is required to call the expert3. Under Section 35.2 of the CPR, an expert is identified as someone “who has been instructed to give or prepare evidence for the purpose of court proceedings.”4 However, the question of whether an expert qualified to give evidence was at issue in Epoch Properties Limited vs British Home Stores (Jersey) Ltd.5 In this case, the President of the IRCS appoint an expert to conduct a rent review of premises let to BHS. The parties differed in their perspectives on the nature of the premises and on whether the appointment of the expert was valid and in accordance with the stipulated requirements in the contract between the parties for a “surveyor”. The Court’s powers under Section 35.4 (2) (b) of the CPR require identification of the expert’s field. In this case, the person appointed was a variety store expert, therefore was he qualified in the required field? The Court held that the decision made by the President of the IRCS was a reasonable one in accordance with his standing and experience and therefore his expertise. As a result, his decision was binding on both the parties, and the appointed expert was qualified in terms of experience to provide evidence. It may thus be argued that contractual provisions between the parties were not strictly and literally adhered to in this case, as mandated by common law, since a more flexible approach is being adopted by the Courts in accordance with the CPR rules, which have assumed precedence over old practices. In the case of Baron v Lovell6 the Judge clearly pointed out that the objective behind the CPR is to ensure that the old adversarial litigation system is dispensed with and that parties are required to conduct themselves in a reasonable manner towards each other, without the point scoring and delays that drag out the cases. In Baron v Lovell, the defendant failed to produce the expert report on time and produced it for the first time at the CMC, with an offer of settlement. However, the Court employed its discretion in ordering the trial to proceed with claimant reports only, thereby rising against old practices on the strength of the new rules which allow the Courts to restrict expert evidence7 at its discretion. The question of duties of an independent expert in rent review proceedings was at issue in the case of Currys group plc v Martin,8 where an independent expert was hired to determine rent review on the lease of two units in a shopping centre. The dispute arose in the differing perception of the two parties on what constituted the open market value of the properties. The landlord maintained that this provision required an assessment of headline rent that would be achieved in the open market. The tenant on the other hand, contended that rent payable in the open market was to be assessed on the basis that no inducements are offered. The independent expert was accused of eschewing his duties to the parties by offering an opinion that on the basis of the existing current law, a headline rent would prevail. This case was not successful, since the Court held that the expert had provided a valid assessment and did not owe any overriding duties to the parties; he owed only the same duties as any other valuer. Moreover, there exists a clear provision in the CPR that the overriding duty of the experts is to the Courts, which is more important than “any obligation to the person from whom he has received instructions or by whom he is paid.”9 In his determination of the rent, the tenants claimed their interests were compromised, which position was not upheld in the instant case. However, in other cases, where there is provision for rent review but not at the option of the tenant, the Court have filled the void when the landlord does not cooperate in the review process.10 But where such right to review is conferred upon the landlord without obligation, such a review will not be held to be exercisable by both parties11. The Court’s conclusions in this aspect are significant, because it reveals the trend to set aside old existing notions, such as the strict adherence to determining the will of the contracting parties in arriving at its decisions and the viewing of the contract as being in the nature of an enforceable promise between the parties.12 In assessing the role of the expert in rent review cases, the expert has an overriding duty to the Court rather than to either of the parties. Bevans and Oshidar have focused upon the role of chartered surveyors who may also be called upon to function as experts in various kinds of property cases, including rent review assessments13. The role of surveyors who also function as expert witnesses is spelt out in the Practice Statement for such individuals, issued by the Royal Institution of Chartered Surveyors. However, many surveyors choose to act in a dual role of advocate and expert before quasi judicial bodies, particularly in fields such as rent review, in order to provide economies in cost and time. In the case of Multimedia Productions Limited v The Secretary of State for the Environment14 the Court pointed out that the assumption of such a dual role was an undesirable practice, since it would cause a conflict between the expected role of the advocate to uphold the client’s best interests vis a vis the role of the expert, whose primary duty is to the Court as a knowledgeable person who can provide an impartial assessment of the issues in a case. The requirement of impartiality in an expert’s role with the corresponding overriding duty to the Court was also emphasized in the case of Clonard Developments Ltd v Humberts15 where two expert valuers of a site, hired by each of the parties, provided different assessments of its value. In this case, the Judge completely rejected the expert evidence, using its powers to restrict evidence used in a case.16 The grounds for such rejection by the Judge was the fact that both the expert witnesses were hampered by partiality towards the party that had hired them and had therefore provided a correspondingly biased opinion, which was therefore not reliable. The role of an expert in rent review or other property proceedings is to provide an impartial assessment of value, overriding consideration of the interest of the parties, which had not been adhered to in this case. Conclusions: On the basis of the above, we therefore conclude that the role of the expert in rent review proceedings has been clearly defined by the requirement of impartiality. In most cases, the Courts have endeavored to ensure that a consistency is maintained in this requirement of impartiality in accordance with Part 35 of the CPR. The first and foremost duty of such an expert witness, as clarified by Part 35, is to the Court, in providing an impartial assessment, rather than promoting the interests of either of the parties. The impartiality of an expert functioning in a dual role of advocate and expert will therefore be suspect. The Court has also been endowed with powers through Part 35 of the CPR to restrict such potentially biased evidence. Moreover, in the first instance, Part 35 has clarified that permission to lead expert evidence in a case will itself be dependent upon the discretion of the court. Hence the significant trend that may be observed in case law resulting from the application of part 35 of the CPR is a shift from the traditional role of the Court in enforcing contractual provisions between the parties. While earlier, the focus of the Court’s effort was in determining the intent of the parties while contracting and ensuring that such intentions are provided due weightage through the decisions of the court, the role of expert witnesses is no longer to be geared towards achieving this end. Rather, the role of the expert witness is to provide the benefit of the weight of his/her opinion by functioning as an aid to the Court, in providing an impartial assessment based upon the resource of knowledge available to the expert17. Sincerely, ( ) To: The Client From: The Law firm of Re: Written expert reports provided in the papers of the assessed Applying: Part 35 of CPR Ma’am/Sir: You have requested to provide an assessment of the consistency of expert reports provided in the papers of the assessed in relation to part 35 of the CPR. The current requirement as spelt out under Section 35.5(1) of the CPR is as follows: “Expert evidence is to be given in a written report unless the Court directs otherwise.”18 This is also in accordance with the intent behind the CPR to limit oral evidence only to what is reasonably required.19 Moreover, any questioning of experts is also to be conducted in writing, by parties desiring clarification setting own their questions in writing after the generation of the expert’s initial report. Bevans and Oshidar have stated the requirements in the practice statement issued by the Royal Institution of Chartered Surveyors20 for written reports from surveyors, who are required to provide written reports and : (a) advise clients in writing about the application of Practice statements (b) be ready to offer copies of the practice statements if required (c) agree to the terms of business. An expert may therefore be called as a witness in a case where he/she has set out a professional opinion and assessment in writing and has submitted it as a report to the Court, failing which the Court could restrict his cross examination in connection with the case. For example, in the case of Stevens v Gullis21 a meeting of two experts from opposing parties was convened in the case of a dispute over building price in a contract. However, the defendant’s expert refused to sign the required memorandum setting out his overriding duty to the Court and his understanding of such a duty to the exclusion of the rights of the party he represented. The judge directed that the expert comply with the guidelines set out in para 1.2 of the Practice Direction to Part 35 of the CPR which states that expert evidence must be an independent assessment that is not influences by the pressures inherent in the litigation process. However when the expert refused to comply with this requirement, the Judge debarred the witnesses and did not allow him to testify, on the grounds that the expert’s evidence could not be relied upon, since he was not prepared to set out his understanding of his responsibility to the court in writing, as per the requirements of Section 35.10 (2) (a) (b) of the CPR. Moreover, the admissibility of an expert’s evidence will be largely dependent upon the prior production of a written assessment, because the role of the expert is to provide an impartial opinion to the Court, but not to influence the Court by usurping the function of the Judge. For example, in the case of Pride Valley Foods Ltd v Hall and Partners22 the expert’s evidence was deemed to be inadmissible because he was asked to state an opinion on an issue where it was the judge’s prerogative to arrive at an opinion, hence the expert was in effect, usurping the function of the Judge. Where the issues in a case pertain to such matters which the Judge can adjudicate upon without requiring expert assistance, the testimony of independent experts may not be deemed to be required at all.23 In such cases, expert reports may not be admissible, at the discretion of the Judge. The weightage accorded to a written report as opposed to oral evidence may be noted in the case of Morgan Sindall Plc v Sawstom Farms (Cambs) Ltd.24 In this case, there was a written evaluation provided by an expert on the assessed value of a piece of property – a roadway. However, the purchaser who had initially requested the written valuation later sought the court’s intervention to declare it null and void on the basis that he had discovered that he had the right of way; hence a wrong property was valued. The purchaser also contended that this could violate the principles set out in the practice statements of the RICS on property value. However, the Court extended its strong support for the written valuation, holding it as a valuation of the correct thing as had been dictated by the terms of the agreement and that no violation of RICS norms had taken place. A written valuation and assessment offers excellent scope for the resolution of disputes through the provision of independent, impartial valuation, unobstructed by the pressures that go with the adversarial litigation process. As pointed out by Furst, performing independent valuations every time there are short term changes in the property market is an uneconomical proposition for property buyers and existing owners.25 Moreover, since properties are often owned by multiple partners, different partners may be in differing financial stages, so the development of an investment strategy to suit every investor will be difficult, especially if there are constant evaluations of property value which have to be made. On this basis therefore, a long term written evaluation of property value is an invaluable asset in property disputes. It remains untainted by the interests of individual parties or the pressures of the adversarial process, being rendered by an expert after a calm and methodical analysis and assessment of the property. Moreover, another aspect that is important is Section 35.10(3) which clearly states that the written report prepared by the expert must “state the substance of all material instructions, whether written or oral, on the basis of which the report was written.” As a result, the written report prepared after the assessment exercise will be well substantiated and supported by facts and relevant supporting documents, which adds weight to the contents of the report. It will thus function as an invaluable aid to the Courts in arriving at decisions, providing a much more reliable base of information than that which may be acquired from the experts by way of oral evidence. In the adversarial Court process, the pressures in a Court situation where an expert witness may be attacked for credibility by either of the parties, or where the evidence may be undermined through browbeating tactics employed in Court, the written record offers a higher degree of reliability. This is the reason why the trends in the Courts have been to require and uphold written valuations. Conclusions: On the basis of the above, we conclude that existing trends in case law appears to indicate that Part 35 of the CPR allows judges to formally require the production of written assessment reports, in preference to oral testimony and cross examination of experts. The written requirement has been included in the CPR in the interest of limiting oral evidence. Part 35 of the CPR is also an aid in redefining the adversarial litigation process where the focus on the interests of the parties led to delays and abuse of due process of law through protracted oral evidence which could include browbeating or leading of witnesses. This is tolerated to a lower degree through the implementation of the strict requirements of Part 35 of the CPR for expert evidence to be provided in writing and substantiated with supporting documents or facts. There is a distinct and definite trend to prefer the written reports as opposed to cross examining experts in the Courts. The indication of bias has led the Courts in some of the cases as cited above, to restrict or eliminate altogether such evidence proffered by experts, on the grounds of possible bias. Part 35 of the CPR further reduces the possible tainting of evidence by also requiring that in the event, evidence provided by an expert is to be contested, it may be done in writing rather than direct confrontation in the Courts. Moreover, the Courts are also endowed with powers under this Part of the CPR to monitor the disclosure of expert evidence provided through documentation. The extent to which such documents are disclosed and the rights of the parties to question such evidence is left to the discretion of the Judge, in accordance with the perceived relevance and importance of such information to the case. Therefore, the requirement to present information in writing and the limiting of oral evidence and cross examination advances the cause of justice and limits the adversarial practice. Judges may also use expert evidence only where it is necessary, on matters where they cannot arrive at a fair and impartial decision without the benefit of such evidence. Therefore, on an overall basis, Part 35 of the CPR contributes to equity and fairness in adjudicating disputes, removing many of the burdens and delays of the adversarial litigation system in place thus far. Bibliography * Bevans, Geoff and Shiraz, Oshidar, 2005. “Surveying the expert Witness domain.” New Law Journal, 155.7177(779) * Day, Joanna, Page Joanna and LeGat, Louise, 2001. “Expert evidence under the CPR : A compendium of cases from April 1999 to 2001.” London: Sweet and Maxwell. * Fried, Charles, 1982. “Contract as promise” Boston: Harvard University Press. * Furst, David, 2007. “Management/Property: Partners in Property” Law Society Gazette, 104.06 (14) * Part 35 of Civil procedure Rules, “Experts and Assessors.” [online] Available at: http://www.hrothgar.co.uk/YAWS/framecpr/part35.htm * Practice Direction to Part 35 of CPR. [online] available at: http://www.dca.gov.uk/civil/procrules_fin/contents/practice_directions/pd_part35.htm Cases cited: * Baron v Lovell (1999) CPLR 630 (Court of Appeal) * Clonard Developments Ltd v Humberts (1999) ECGS 7 (Court of Appeal) * Currys group Plc v Martin (1999) 3 EGLR 165 (Queen’s Bench Division) * Epoch properties Limited v British Home Stores (Jersey) Ltd and the President of the Royal Institute of Chartered Surveyors.” 2004 JRC 092. * Hemingway Realty Ltd v Master Wardens & Commonalty of Freemen of the Art or Mystery of Cloth workers of the City of London (2005) 19 EG 176 Ch. D * Michael Hyde and Associates Ltd v JD Williams and co Ltd (2000) BLR 1999 (Court of Appeal) * Morgan Sindall plc v Sawston Farms (Cambs) Ltd (1999) 1 EGLR 90 * Multimedia Productions Limited v The Secretary of State for the Environment (1988) EGSC 83 * Pride Valley Foods Ltd v Hall and Partners (Contract Management) (May 4, 2000) TCC * Royal bank of Scotland plc v Jennings (1997) 19 EG 152 * Stevens v Gullis (1999) 3 EGLR 71 (Court of Appeal) Read More