The end of the "over-lawyered" witness statement? New rules for witness evidence in the Business and Property Courts

On the 6^th April 2021, a new Practice Direction 57AC ("PD 57AC") will come into force in the Business and Property Courts, applicable to all trial witness statements signed on or after that date¹. The introduction of PD 57AC represents a fundamental reform to the way factual witness evidence is collected and presented in commercial litigation, and will require a change in working practice and attitude on the part of both parties to commercial proceedings and their lawyers.

The new Practice Direction is the culmination of the work of the Witness Evidence Working Group, a committee assembled in 2018 with the remit of considering how witness evidence in the Business and Property Courts could be improved. The need for reform arose out of sustained criticism by judges of the efficacy of witness statements in achieving "best evidence" at proportionate cost, particularly in large commercial cases.

The Working Group set out their findings and proposals for reform in a report in December 2019. The draft Practice Direction which incorporated these proposals was circulated during autumn 2020 and, following some further small changes, approved in its final form in January 2021.

What problems is PD 57AC aimed at fixing?

Criticisms of the way witness statements have come to be used - or "misused" - in large commercial proceedings are nothing new. The catalogue of case law in which judges disparage the drafting and utility of witness statements is already large and ever-growing.

The same concerns arise repeatedly and were noted by the Working Group in its report. These concerns can be summarised generally in the criticism that witness statements have become "over-lawyered", but more specifically:

The process of compiling witness statements in numerous drafts and iterations corrupts the witness's unvarnished recollection and results in a final product that is less reliable;
Witness statements frequently stray into partisan narrative, comment or spin, that is to say they are not used for evidence, but argument; and
Witness statements often include lengthy recitation of marginally relevant background narrative and comment upon disclosed documents.

Whilst judges are already able to use their case management powers to strike out or order redrafting of non-compliant statements (for a recent example see PCP Capital Partners v Barclays Bank [2020] EWHC 646 (Comm)) the pervasiveness of such practices persists. The problem is perceived to be particularly acute in the large commercial cases that are generally litigated in the Business and Property Courts.

What are the major changes?

The essential tenet of the new practice direction is that the evidence set out in a witness statement should be confined to the evidence in chief that a witness would give, that is to say the evidence that a witness would be permitted to give orally at trial. The provisions of the practice direction are aimed at ensuring that trial witness statements comply with this basic principle.

The most significant practical reforms are as follows:

1. Statement of Best Practice

All trial witness statements to which PD 57AC applies must be prepared in accordance with the new Statement of Best Practice, set out as an Appendix to the practice direction. The Statement of Best Practice sets out in detail what the proper and permissible content of witness statements is and the process by which they should be prepared. Many of the provisions of the Statement of Best Practice are restatements or amplifications of well-established principles, however, there are some that are novel or noteworthy.

As to content, there are now explicit prohibitions against the inclusion of any argument, narrative or commentary on the case which are clearly intended to prevent the issues perceived as endemic by the judiciary. The Statement of Best Practice also makes it clear that witnesses should only speak to matters of which they have personal knowledge and that, on important disputed matters of fact, the witness must state both how well they recall the matters addressed and whether, and if so how and when, the witness's recollection has been refreshed by reference to documents (see further at "Use of Documents" below).

Regarding the practice of procuring witness evidence, there are several important points for solicitors involved in the taking and drafting of statements to be aware of, mostly aimed at preventing corruption of the witness's "unvarnished recollection" and the aforementioned "over-lawyering":

Lawyers must explain to witnesses the proper purpose and content of their statements prior to the witness reviewing any draft statement or, if feasible, prior to any evidence being taken;
Lawyers should avoid asking leading questions when interviewing a witness;
There should be as few drafts as practicable of the witness statement;
Draft statements should be based upon and must not go further than the record or notes of an interview with a witness, of which a durable record should be kept; and
Where further evidence is required on a point set out in a draft statement lawyers should elicit this by asking a non-leading question for the witness to answer, and not by proposing drafted content for approval, amendment or rejection by the witness.

The Statement of Best Practice also contains some further important rules regarding the use of documents.

2. Use of Documents

The Statement of Best Practice states that, in the process of giving evidence, a witness's memory may be refreshed by being shown a document, but only if the witness created or saw the document at the relevant time. Any documents that the witness is referred to in this manner must then be identified by list. No other documents should be referred to in the statement unless necessary and permitted in the circumstances set out in the Statement of Best Practice.

These provisions have proved divisive, even within the Working Group itself. One concern is that adverse inferences will be drawn where the list of documents to which a witness has been referred is a long one, even where all those documents were legitimately necessary to refresh the witness's memory. It remains to be seen whether this concern will be manifest in practice.

Another concern is how, in a case where the disclosed documents are meant to form the bulk of the evidence, the parties will get those documents in front of the court without exhibiting them to witness statements. One solution to this issue, which was considered by the Working Group in its report, was the introduction of a "pre-trial statement of facts", however, it was not implemented as it was felt that such a document would not be appropriate in all cases, and would create a further layer of forensic costs. The Working Group noted that a direction to produce such a document is often already made in appropriate cases. The other solution to the issue of putting documentary evidence to the court is potentially to extend the time given to openings or closings at trial. The Working Group has acknowledged that both of these options remain "on the table" as possible options for further reform.

3. Witness's Certificate of Compliance

In addition to the Statement of Truth which all witness statements are required to contain, any statements to which PD 57AC applies will now have to contain the following certificate of compliance:

“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. ”

It is hoped that in being obliged to sign the above declaration witnesses will take personal responsibility for understanding the proper content and purpose of their statement, and ensuring that it meets these standards.

4. Legal Representative's Statement of Compliance

Witness statements to which PD 57AC applies will now also need to be endorsed by a certificate of compliance, to be signed by the solicitor in charge of preparing the statement, in the following format:

“I hereby certify that:

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

Where a statement is non-compliant with PD 57AC, the named solicitor who signed the certificate of compliance will be at risk of criticism by the court, and it is hoped that this hazard will encourage solicitors to be more rigorous in adhering to the rules of evidence.

Conclusion

Whilst many of the provisions of these reforms are arguably just restatements of established rules of evidence, the new practice direction empowers both the court and parties to proceedings to take a harder line to non-compliance with the rules of evidence. These reforms have the potential to be seismic in their impact on the commercial litigation process and should the courts enforce them rigorously, litigating parties and their lawyers will need to adapt quickly or risk serious consequences.

How, in practice, the reforms will be received and adopted remains to be seen, but legal practitioners will be keenly observing the first cases to which the reforms apply for indications of the shape of witness evidence to come.