Preparing Witness Statements for Use in Trials in IP Actions: Greencastle v Payne

Author Francis Carruthers Gould  Source Wikimedia Commons

Jane Lambert

Chancery Division (Mr Justice Fancourt) Greencastle MM LLP v Payne and others [2022] EWHC 438  (13 Jan 2022)

For many years witnesses in civil proceedings in England and Wales have delivered their evidence in chief in writing. That shortens trials and enables parties to know the case they have to meet at an early stage but it has given rise to concerns that factual witness statements are often ineffective in performing their core function of achieving best evidence at proportionate cost.

Those concerns were expressed at a meeting of the Commercial Court Users’ Committee in March 2018.  A working group was set up consisting of:

• Mr Justice Popplewell (Commercial Court) (Chair) 
• Mr Justice Andrew Baker (Commercial Court) 
• Mr Justice Fancourt (Chancery Division) 
• Mr Justice Waksman (Commercial Court and Technology and Construction Court, and formerly Circuit Commercial Court) 
• Andrew George QC (Blackstone Chambers) 
• Ian Clarke QC (Selborne Chambers) 
• Joe Smouha QC (Essex Court Chambers) 
• John Kimbell QC (Quadrant Chambers) 
• Audley Sheppard QC (Clifford Chance) 
• Chris Bushell (Herbert Smith Freehills) 
• Jon Turnbull (Clyde & Co) 
• Ted Greeno (Quinn Emanuel Urquhart & Sullivan), and 
• Richard Blann/Giulia Da Re (Lloyds Banking Group).

In  Factual Witness Evidence in Trials before the Business and Property Courts, they found that the current practice has a number of advantages and disadvantages.  The advantages are that it enables the parties to identify at a relatively early stage the evidential case they have to meet thereby encouraging settlement and focusing on cross-examination.  The main disadvantage is that it does not always achieve best evidence.  The experience of criminal trials and civil trials before the introduction of witness statements was that the best evidence was often obtained by a traditional examination-in-chief when witnesses were giving evidence in their own words and providing a more genuine version of their recollection.  The working group thought that developing statements through numerous drafts, getting the witness to retell his or her story over and over could corrupt the witness's memory.  Throwing a witness immediately into cross-examination tends to put him or her on the defensive from the outset and deprives him or her of the opportunity of making a favourable impression. Witness statements often contain material that is irrelevant to the issues that the court has to decide.  Any costs that are saved by the shortening of trials are offset by the cost of preparing evidence.

The working group suggested an authoritative statement of best practice containing the following elements:

• a witness statement should be confined to the evidence that the witness would give if properly examined-in-chief; 
• it should use the witness’s own words, based on his or her own recollection, with revisions limited to aiding brevity and clarity;
• the content of a witness statement must be confined to the relevant issues and comply with the rules of evidence;
• the focus of a witness statement must be on its utility to the trial judge and not on extraneous considerations; and
• lawyers' input should be provided with conspicuous care.

It also recommended that the solicitor in charge of drafting the witness statement should be required to sign a solicitor’s certificate of compliance with the CPR and the relevant court guide.

The report was presented to the Business and Property Courts Board.  The Board welcomed the report and invited the working group to consider how its recommendations could be implemented.  In Factual Witness Evidence in Trials before the Business and Property Courts, Implementation  Report of the Witness Evidence Working Group.  The group proposed the introduction of a new Practice Direction 57AC and an Appendix containing a statement of best practice.  It suggested a commencement date of 1 April 2021 which would provide a "substantial ‘lead time’ during which litigants and their advisors can be made aware of the reform".

The proposal was accepted and Practice Direction 57AC—Trial Witness Statements in theBusiness and Property Courts was introduced by CPR Update 127 (January 2021) pursuant to CPR 57A.3. It applies to all the Business and Property Courts except the Intellectual Property Enterprise Court which is exempted by para 1.3 (7) of the practice direction, Para 1.1 makes clear that the practice direction does not affect witness statements for hearings other than trials or affidavits.  It applies to witness statements intended for trials ("trial witness statements") signed on or after 6 April 2021 in new and existing proceedings. 

Paea 2.1 states that the purpose of a trial witness statement is to set out in writing the evidence in chief that a witness of fact would give if they were allowed to give oral evidence at trial without having provided the statement. The next sub-paragraph continues that trial witness statements are important in informing the parties and the court of the evidence a party intends to rely on at trial. Their use promotes the overriding objective by helping the court to deal with cases justly, efficiently and at proportionate cost, including by helping to put parties on an equal footing, saving time at trial and promoting settlement in advance of trial.

Para 3.1 requires a trial witness statement to contain only evidence as to:

• matters of fact that need to be proved at trial by the evidence of witnesses in relation to one or more of the issues of fact to be decided at trial, and
• such matters that the witness would be asked by the party calling him or her to give, and the witness would be allowed to give, in evidence in chief if he or she was called to give oral evidence at trial

Para 3.2 stipulates that it must set out only matters of fact of which the witness has personal knowledge and are relevant to the case.  If a witness has referred to or been referred to one or more documents, the witness statement must identify that document by list.  Para 18.1 of Practice Direction 32 requires a trial witness statement to be in the witness’s own words, if practicable, is reinforced by para 3.3 of PD57AC. Para 3.4 mandated trial witness statements to be prepared in accordance with:

• the Statement of Best Practice contained in the Appendix to the practice direction, and
• any relevant court guide, 

Should there be any inconsistency between the Statement of Best Practice and the court guide, the Statement is to be preferred to the guide.

Witness statements for use at trial should be verified as follows in accordance with para 4.1:

"I understand that the purpose of this witness statement is to set out matters of fact of which I have personal knowledge.

I understand that it is not my function to argue the case, either generally or on particular points, or to take the court through the documents in the case.

This witness statement sets out only my personal knowledge and recollection, in my own words.

On points that I understand to be important in the case, I have stated honestly (a) how well I recall matters and (b) whether my memory has been refreshed by considering documents, if so how and when.

I have not been asked or encouraged by anyone to include in this statement anything that is not my own account, to the best of my ability and recollection, of events I witnessed or matters of which I have personal knowledge. ”

The statement must be endorsed by the solicitor or other authorized litigator with the conduct of the action in accordance with para 4.3 unless the party calling the witness is a litigant in person or the court orders otherwise:

“I hereby certify that:

1.I am the relevant legal representative within the meaning of Practice Direction 57AC.

2.I am satisfied that the purpose and proper content of trial witness statements, and proper practice in relation to their preparation, including the witness confirmation required by paragraph 4.1 of Practice Direction 57AC, have been discussed with and explained to [name of witness].

3.I believe this trial witness statement complies with Practice Direction 57AC and paragraphs 18.1 and 18.2 of Practice Direction 32, and that it has been prepared in accordance with the Statement of Best Practice contained in the Appendix to Practice Direction 57AC.

Name: …………………………

Position: …………………………

Date:…………………………”

Without prejudice to the court's other case management powers and sanctions, para 5.2 enables it to do any one or more of the following:

"(1) refuse to give or withdraw permission to rely on, or strike out, part or all of a trial witness statement,

(2) order that a trial witness statement be re-drafted in accordance with this Practice Direction or as may be directed by the court,

(3) make an adverse costs order against the non-complying party,

(4) order a witness to give some or all of their evidence in chief orally."

Although para 1.3 (7) excludes PD57AC from proceedings in the Intellectual Property Enterprise Court, it applies to the rest of the Chancery Division sitting in the Rolls Building (including the Patents Court) as well as Chancery trials in Birmingham, Bristol, Cardiff, Leeds, Liverpool, Manchester and Newcastle upon Tyne. So far, I have found one decision in which the new practice direction has been in issue.

In Greencastle MM LLP v Payne and others [2022] EWHC 438 (IPEC) (13 Jan 2022), the defendants applied to strike out the witness statements of the claimant's only witness pursuant to para 5.1 and 5.2 of PD57AC on the grounds that the statements did not comply with the practice direction.  Readers may have noted that BAILII lists the judgment in this case as an IPEC decision even though the practice direction does not apply to that court by virtue of para 1.3 (7).  In fact, this was a case in the general Intellectual Property list which came on before Mr Justice Fancourt.  It will be recalled that he had been one of the members of the Written Evidence Working Group.

It appears from paras [5] to [7] of the transcript that the cause of action was passing off.  The claimant had acquired the goodwill of a company in administration called JOE Media Ltd ("JOE") which had published a podcast called "House of Rugby".  The defendants had contributed occasionally to those podcasts and the claimant tried to persuade them to make others.  They refused the claimants' offer and began to make their own podcasts under the name "The Good, the Bad and the Rugby,"

Mr Justice Fancourt set out the contents of the first of the witness statements to which the defendants objected at para [8]:

"....... first, [the witness's] business experience, which is not directly relevant to anything in issue in the trial, as he is not an expert witness and no expert evidence was permitted; second, the Claimant's acquisition of JOE, which is not relevant to any issue as it is now accepted that the Claimant did acquire the rights of JOE to the assets, intellectual property and the goodwill of the House of Rugby brand; third, a description of the House of Rugby show as it had been, and how the Claimant felt that they could exploit its potential with particular reference to its previous main sponsor, Guinness (that is to say, the company Diageo); fourth the particular events of May to October 2020, which includes substantial parts commenting on the position of Diageo and its attitude to House of Rugby, the impact of sponsorship, and a section commenting on what the Defendants were doing in terms of marketing their intended new podcasts; and fifthly, and relatively briefly at the end of the statement, some paragraphs describing the impact of what the Defendants did on the Claimant's ability to continue with the House of Rugby brand."

The witness statement was verified by the witness in accordance with para 4.1 of PD57AC and was endorsed with a certificate of compliance signed by the solicitor having the conduct of the case as required by para 4.3,  The learned judge said at para [9] that it was not possible for the witness or solicitor to say that they were not aware of the practice direction because they had signed the formal statement and certificate of compliance but he doubted whether either of them had read the practice direction or, if they had, whether they had understood the effect and purpose of it.  He added that was because the first witness statement did 

"exactly what the Practice Direction was designed to prevent trial witness statements of fact from doing, that is to say referring to matters that were not within the knowledge of the witness (other than properly presented hearsay evidence), commenting on documents that have been disclosed (save to the very limited extent that the practice direction does permit it) and presenting argument in support of a party's case."

He then quoted paras 2.1 and 3.1 of the Practice Direction and paras 2.3, 3.4 and 3.6 of the appended Statement of Best Practice. 

The principal objections taken by the defendants were: 

1. The witness statement contained content of which the witbness had no personal knowledge, including a good deal of speculation about what others did and thought and why they did it and, in particular, how the public might react to the defendants' branding as compared with the House of Rugby branding; 
2. They amountes to commentary on documents that the witness did not see at the time of the events in issue; and 
3. They amount to the witness's arguing the claimant's case, not presenting evidence of matters of disputed fact that are relevant to issues to be determined at the trial, which is what the practice direction states that a witness statement should confine itself to.

The judge referred to the following examples from the witness statement.  At para 41 the witness said:

"It is a small industry, and I have heard from several sources within the industry that wish to remain confidential that this was being done by the Defendants. Any such touting being done by the Defendants will have poisoned the well from the perspective of potential sponsors for our House of Rugby show at that time such that any approach made by us for sponsorship from that potential sponsor would not have had a chance of succeeding. Indeed, the sponsor may simply not have bothered responding to our approaches, or if they were previously intending to approach us they would have changed their minds."

The defendants complained that this improperly relied on unattributed hearsay evidence but, more significantly, it is the witness speculating on the thought processes of third parties and matters that are not within his knowledge, and then using the result of that speculation to give an opinion on what is really a final ultimate question for the court on the issue of misrepresentation.

At para 18.1 the witness speculated on a possible approach by JOE to Diageo of which he could have had no personal knowledge because it would have taken place before his involvement with the affairs of JOE if in fact it ever took place at all:

"In order to obtain this sponsorship arrangement, JOE Media may have approached Diageo with a rough idea of who the presenters were going to be, but far more critically with the concept of the show. It would have been pitched as a show where a broad range of rugby-related topics are discussed amongst high-profile individuals in the public eye, with the opportunity to further commercialise the product (e.g., through merchandise or live shows). Identifying the target audience will have been key for Diageo, who will have wanted to attract casual rugby funs in addition to regular watchers of the sport."

Another passage to which the defendants objected was a commentary on certain documents that the defendants had recently disclosed.   Finally, they complained that the following passage was nothing more than argument and speculation:

"It remains the case, therefore, that the Defendants' activities (for example, the 4 August post referred to above) will have confused a significant proportion of listeners into thinking that they were relaunching House of Rugby, and that the comments on the social media posts are a very small fraction of the overall consumer market. There is therefore a silent majority who would still be under the misunderstanding that the Defendants were relaunching House of Rugby, but who would not have taken the time to comment as such on social media."

His lordship found at para [23] that, with certain exceptions, the objections raised on behalf of the defendants to the first witness statement had been made out.  Indeed, he spotted more objectionable matter than had been highlighted by the defendants.  There were large passages of the second witness statement that did not comply with the practice direction.

The judge considered what to do as the action was due to come on for trial in less than a month's time at para [32]:

"The options for the court are the following. First, to withdraw permission for [the] two witness statements, in whole or in part, leaving the Claimant to apply for permission to adduce a further witness statement, which of course would have to be on the basis of an application for relief against sanctions. Second, to withdraw permission for the existing statements but order that the witness statement(s) be re-drafted in accordance with PD 57AC; third, to do surgery to the existing witness statements, by excising those passages that are objected to by the Defendants that I agree are non-compliant and, possibly, the further paragraphs that I have identified; fourth, to require [the] evidence to be given orally in chief at the trial; and the fifth option is to do nothing and let the matter go on to trial and make an adverse costs order."

He rejected the first as too punitive and the last on the ground that it was "most unsatisfactory for a serious breach of the practice direction to be ignored and the problems left to be dealt with at trial." He considered ordering the claimant's witness to give his evidence in chief orally but decided against it on the basis that it would create a potentially unfair imbalance between the two parties. He decided that the right approach was to withdraw the existing permission for the two witness statements that had been served but to give permission for the claimants to prepare a replacement, fully compliant statement by 19 Jan 2022 which was the date on which further outstanding evidence was due.

He set out his reasons in para [36]:

"First, this is an egregious case of serious non-compliance with the Practice Direction. Second, the Claimant is still entitled to put in further evidence in any event within the timescale that I have indicated, and so the process of preparing factual evidence has not yet been concluded. Third, there is adequate time for the exercise of preparing a replacement statement for the trial and a replacement compliant statement would be fairer and more appropriate for this case than requiring [the witness] to give oral evidence in chief. The work that will be involved is not that extensive. This is not an opportunity for the Claimant to seek to put in further unheralded evidence, save to the extent that it is permitted at this stage by the existing orders; and the exercise is therefore one of removing the objectionable paragraphs and putting the remaining content into a comprehensible form. Fourth, it would in my view be better for the Claimant to be given the opportunity to give careful thought to the additional passages that I have identified, rather than debate further now whether they should be excluded, as they have not been addressed in argument. The responsibility is however on the Claimant to ensure that any replacement statement is compliant with the Practice Direction. Fifth, attempting to perform surgery on the witness statements, paragraph by paragraph, would take further considerable time that is not available before trial and might well create problems of incoherence in the remaining parts of the statement and make its contents less compelling, which would potentially be unfair to the Claimant."

PD 57AC compliments Practice Direction 51U - Disclosure Pilot for the Business and Property Courts which I discussed in Disclosure - Anan Kasei Co. Ltd v Neo Chemicals & Oxides on 18 Nob 2021 as much of the expense of civil litigation in this country is taken up with disclosure and the preparation of witness statements.  PD57AC and PD51U should simplify and speed up litigation and reduce costs.

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