Instructing an expert in financial remedy proceedings

It is often the case in financial remedy proceedings that one or both parties wish to rely on expert evidence. Matters upon which experts are asked to give their opinion vary widely with the most common being the valuation of property, businesses and pensions. The rules governing expert evidence are set out in Part 25 of the Family Procedure Rules ("FPR") and its accompanying practice directions, which are essential reading. In addition, Sir Andrew McFarlane P issued a President’s Memorandum on Experts in the Family Court, dated 11 October 2021. This column highlights some key points and principles when expert evidence is required in financial remedy proceedings. It is important to note that there are variations to some of the rules cited below for both children and Sch 1 proceedings, which will be considered in a future column.

Expert’s duties

The duty of an expert is to help the court on matters within their expertise. This duty overrides any obligation to the person who instructs or pays them (FPR, r 25.3). It is also important to note that instructions sent to an expert are not privileged (FPR, r 25.14(3)), whether the expert is instructed on a joint or sole basis.

Obtaining the court’s permission

Expert evidence cannot be adduced without the court’s permission (FPR, r 25.4(2)).

When deciding whether to allow expert evidence, the court must determine whether it is "necessary" to assist the court to resolve the proceedings (FPR, r 25.4(3)). The Court of Appeal considered the meaning of "necessary" in Cooper-Hohn v Hohn [2014] EWCA Civ 896 and approved the earlier definition of Sir James Munby P of Re H-L (Expert Evidence: Test for Permission) [2013] EWCA Civ 655, [2013] 2 FLR 1434:

"...“lying somewhere between ‘indispensable’ on the one hand and ‘useful’, ‘reasonable’ or ‘desirable’ on the other hand”, having “the connotation of the imperative, what is demanded rather than what is merely optional or reasonable or desirable.” "[3]

In making the decision as to whether expert evidence is necessary, the court must consider a number of factors set out in FPR, r 25.5(2), including the issues in question, the impact it would have on the timetable and duration of proceedings, and the cost. The court must also consider any failure to comply with FPR, r 25.6 which set outs a mandatory timetable for seeking expert evidence and requires parties to apply "as soon as possible" and in cases of financial remedy, "no later than the first appointment".

Single joint experts

In financial remedy proceedings, wherever possible, expert evidence should be provided by a single joint expert ("SJE") (PD 25D, para 2.1). Where the parties cannot agree who the single joint expert should be, the court has the power to choose the expert from a list prepared by the parties, or set out a procedure for the selection of the expert (FPR, r 25.11(2)).

The parties are jointly and severally liable for paying the SJE’s fees and expenses, unless the court directs otherwise (FPR, r 25.12). However, it is also important to note that the court has the power to cap the costs of the SJE (FPR, r 25.12). In the recent case of Loggie v Loggie [2022] EWFC 2, Mostyn J stated that parties must ensure they ask the court to cap fees before an SJE is instructed, especially given the requirement to obtain costs details from the SJE before the hearing at which permission to instruct them is considered (para 3.4, PD 25D). If, unexpectedly, the SJE has to undertake more work, an application to vary the cap should be made (FPR, r 4.1(6)).

Instructing separate experts

If one or both parties are dissatisfied with the expert’s opinion, they may wish to make an application to rely on their own expert. This is often referred to as a Daniels v Walker application (Daniels v Walker [2000] 1 WLR 1382), a case determined under Part 35 of the Civil Procedure Rules ("CPR"). In that case, Lord Woolf MR concluded that where issues with a joint report are not resolved by asking questions of the expert, one party may wish to obtain their own expert evidence before making a decision as to whether or not to challenge the report of the joint expert. If that is the case, then that party should (subject to the discretion of the court) be permitted to obtain that evidence, provided that the reasons for obtaining additional information are not "fanciful".

Where parties do instruct their own expert, the expert must remain impartial. In Gallagher v Gallagher (No.2) (Financial Remedies) [2022] EWFC 53 Mostyn J rejected evidence from the husband’s expert because it lacked impartiality and described the expert as walking "hand-in-hand" with the husband.

Procedure

As noted above, the rules require the parties to apply for the court’s permission to adduce expert evidence as soon as possible and no later than the first appointment (FPR, r 25.6). However, the court may allow an application after the first appointment where there is good reason for the delay (for example, where valuations are agreed for the purposes of the financial dispute resolution and expert evidence is only required if the matter proceeds to a final hearing).

Before the application is made, the potential experts must be given the information set out in PD 25D, para 3.3, and the solicitor must obtain from the expert the information set out in para 8.1 pf PD 25B, including that the work is within the expert’s expertise, the expert is available to do the work within the relevant timescale and the expert’s costs. The process of obtaining this information should therefore be started as soon as possible after exchange of Forms E.

The application must be made in Form D11 with an accompanying draft order, using the Part 18 procedure, in order that the issue can be considered by the judge at the first appointment. The information that must be provided in the Form D11 is set out in FPR, r 25.7(2)(a), and the draft order must set out the matters specified in PD 25D, para 3.12.

Letter of instruction

If the application is successful, the party responsible for instructing the expert must prepare a letter of instruction within 5 business days. PD 25D, para 4.1 sets out what must be included in the letter of instruction. When the court gives directions for the appointment of an SJE, the letter of instruction should be joint unless the court directs otherwise (FPR, r 25.12(1)). If there is a dispute about the wording, the court may determine the instruction on the written request of one of the parties, copied to the other party (FPR, r 25.12(2)), or the matter can be referred to an arbitrator (see CM v CM [2019] EWFC 16). In order to keep the expert updated with any developments impacting the work they are carrying out, they should be provided with a copy of any new document filed at court affecting them within 2 days of receipt by the party responsible for their instruction (FPR, r 25.18).

Expert’s report

There is a general requirement for expert evidence to be given by way of a written report (FPR, r 25.9(1). The required contents of the report are detailed in PD 25B, para 9.1 which also requires the report to be verified by a statement of truth in a specified form.

FPR, r 25.10 allows a party to put written questions to an expert. Unless the court directs otherwise, the questions may be put once only, must be put within 10 days from the service of the expert’s report, and must be for the purpose of clarification only. The questions must also be sent to the other party. If an expert does not reply to the questions, then the court may direct that the expert’s evidence may not be relied on. If an expert considers the questions to be disproportionate, they can seek directions from the court about whether or not they should answer them. The expert’s answers are treated as part of the report.

Meetings between experts

If there is more than one expert, then it is standard practice for the court to direct that the experts should meet after their reports have been served (although such a meeting can happen at any stage) and that they should then prepare a schedule of agreement and disagreement (FPR, r 25.16). This meeting should take place within 15 business days after the reports have been filed and served.

The final hearing

Expert evidence is given in a written report unless the court directs otherwise. Therefore, the court will not direct an expert to attend a hearing unless it is necessary to do so "in the interests of justice" (FPR, r 25.9). However, if there are large areas of disagreement, and it is therefore considered necessary, PD 25B, paras 10.1 and 10.2 set out the arrangements that must be made.

In the case of CB v KB (Financial Remedies: Calculation of Income Streams and Child Support) [2019] EWFC 78, [2020] 1 FLR 795, each party had their own expert, and Mostyn J directed that they should give their evidence together (known as hot-tubbing). This procedure is provided for in Part 35 of the CPR (although there are not equivalent provisions in the FPR) and allows evidence to be heard concurrently. It was considered a very helpful approach by Mostyn J. The experts were questioned at the same time topic by topic which, from the court’s point of view meant that relevant evidence on each topic was given contemporaneously and not separated by a hiatus. Mostyn J recommended the process for use in financial remedy cases where competing valuers give evidence.

After the final hearing

Finally, within 10 working days after the final hearing, the solicitor instructing the expert must inform the expert in writing of the outcome of the case, and of the use made by the court of the expert’s opinion. They must send the expert, within 10 days of receiving them a copy of the court’s final order, and any transcript of the court’s decision (FPR, r 25.19).

As demonstrated, the rules in this area are both detailed and prescriptive, and it is imperative for practitioners to have a good working knowledge of Part 25 and the accompanying practice directions to ensure they do not fall foul of them.

Please note this content was originally published in the Family Law Journal. April 2023 edition, best practice section.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, June 2023