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Instructing Experts In Ancillary Relief Proceedings

Fiona Wood of Pannone LLP discusses the law governing the instruction of experts in ancillary relief proceedings by examining part 35 of the Civil Procedure Rules and the President's Best Practice Guide.

Fiona Wood, Partner, Pannone LLP

When dealing with the financial consequences of divorce, practitioners will often need to obtain expert evidence regarding the valuation of properties, businesses and other assets, such as classic car collections, jewellery or antiques. The law governing the instruction of such experts is found in Part 35 of the Civil Procedure Rules 1998 (the Civil Procedure Rules). Additionally, the President of the Family Division's Ancillary Relief Advisory Group has produced a Best Practice Guide for Instructing a Single Joint Expert dated the 24th April 2002 (the Best Practice Guide).

When considering whether expert evidence is necessary, we must take into account Rule 35.1 of the Civil Procedure Rules which states that expert evidence shall be restricted to that which is reasonably required to resolve the proceedings. It may therefore not be appropriate or proportionate to instruct an expert when his or her fees are likely to be of an amount similar to the value of the item in question.

If you conclude that it is appropriate to instruct an expert, you must then consider whether it is appropriate to instruct a single joint expert or whether each party should instruct their own expert. Where two or more parties wish to submit expert evidence on a particular issue, Rule 35.7 of the Civil Procedure Rules gives the court the power to direct that this evidence be given by one expert only. Furthermore, under the President's Practice Direction of the 25th May 20001 [1], the President advised that "where expert evidence is sought to be relied upon, parties should if possible agree upon a single joint expert whom they can jointly instruct". We are therefore encouraged to instruct a single joint expert if appropriate.

In P v P [2], Mrs Justice Baron was presented with two accountants' reports regarding the valuation of a business. She advised that in such a case, where the issues were relatively straightforward, "it would have been so much better (and significantly cheaper) if one expert had been instructed to report on an unbiased basis to the court". She clearly agreed with the President's Practice Direction.

When a Single Joint Expert Is Instructed
If it is agreed that a single joint expert should be instructed, whom should the parties jointly instruct? At paragraph 3 of the Best Practice Guide, it is stated that an expert instructed by one party separately will not usually be appointed later as a single joint expert. Parties should therefore consider the likely cost implications of instructing an expert for their side, early in the negotiations, rather than suggesting a single joint expert, because if the matter does not settle and ancillary relief proceedings have to be issued, it is likely that the court will order that a different, single joint expert prepare a valuation report. In such circumstances the client may end up funding the cost of two experts' reports.

In practice, if you are intending to put forward a specific expert to act as a single joint expert, you should obtain the following information from them:-

These details can then be given to the other side and if no agreement is reached, they can be put before the court at the first appointment hearing, for the district judge to consider.

If the court orders a single joint expert to prepare a valuation report, it may give directions about the payment of the expert's fees and expenses and any inspection or examination which the expert wishes to carry out, as dealt with by rule 35.8 of the Family Proceedings Rules. However, paragraph 6 of the Best Practice Guide goes further and states that where the court directs a report by a single joint expert the order should:-

If the court makes an order detailing the above, there should be little scope for problems regarding the single joint expert's report. With regard to the issue of costs, it must be noted that rule 36.8 of the Civil Procedure Rules states that, unless the court directs otherwise, the instructing parties are jointly and severally liable for payment of the expert's fees and expenses.

Once the court has ordered that a single joint expert be instructed, you must then deal with the letter of instruction. Rule 36.8 of the Civil Procedure Rules states that either party can give instructions to the expert provided that they send a copy of their letter to the other side. However, the Best Practice Guide, at paragraph 7, states that the expert should be instructed by way of a joint letter from the parties containing the following information:-

If one of the parties holds most of the information regarding the asset to be valued, it will be sensible for their solicitor to draft the joint letter of instruction, providing the appropriate enclosures, which should then be sent to the other party's solicitor for their approval. If this is not appropriate, for example if one party is a litigant in person, rule 35.9 of the Civil Procedure Rules provides that where a party has access to information which is not reasonably available to the other party, the court may direct that the party with access prepare and file a document regarding the information and serve a copy of the document on the other party. However, in most cases this will be circumvented by the party with knowledge preparing the joint letter of instruction.
What if the parties cannot agree the joint letter of instruction? The Court of Appeal dealt with this issue in Daniels v Walker [3] and stated that whilst it is desirable for instructions to a single joint expert to be agreed, if they cannot be, the dissatisfied party can give their own separate instructions to the single joint expert.

It is worth noting that paragraph 9 of the Practice Direction states that should a party wish to give supplementary instructions to the single joint expert, full consideration must be given to proportionality and to the possible effects of this additional request upon the court timetable. Supplementary instructions should not be given to the single joint expert unless the other party has agreed or they have been order by the court. Mrs Justice Baron dealt with the issue of giving supplementary instructions to a single joint expert in K v K [4], stating that "in matrimonial cases, where emotions often run high, it is prudent to act co-operatively and therefore jointly". She also confirmed that the Best Practice Guide for Instructing a Single Joint Expert states that supplementary instructions should not be given "unless they are agreed or the Court has sanctioned them".

The expert's duty is dealt with by Rule 35.3 of the Civil Procedure Rules. The single joint expert has a duty to help the court with matters within his expertise and this must override any obligation to the person from whom he has received instructions or by whom he is paid. Furthermore, paragraph 9 of the Practice Direction states that all communication by the single joint expert should be addressed to both parties and that he should keep the parties informed of all material steps taken. Any meeting or conference attended by the single joint expert should be proportionate to the case and should normally be with both parties and/or their advisors, unless both parties have agreed otherwise in writing. The single joint expert should not attend any meeting or conference that it not a joint one.

Very importantly, the single joint expert must comply with rules 35.10 of the Civil Procedure Rules and state at the end of his report that he is an expert and understands his duty to the court and he has complied with that duty. He must also state the substance of all material instructions, whether written or oral, on the basis of which the report was written.

Once the expert's report has been prepared, copies must be sent simultaneously to both parties' solicitors. The parties are then able to raise questions regarding the report. Rule 35.6 of the Civil Procedure Rule states that these questions must be put in writing within 28 days of service of the expert's report, unless the court gives permission to extend this time limit or the other party agrees. However, if the district judge at the first appointment was following the Best Practice Guide he will have already timetabled the date by which such questions should be raised and the date by which they should be answered. Under rule 35.6 of the Civil Procedure Rules, an expert's answer to any questions shall be treated as part of his report.

What if one of the parties does not agree with the single joint expert's report? This issue was again dealt with by the Court of Appeal in Daniels v Walker [3], where they stated that if a party had agreed to a report by a single joint expert, it did not prevent them from obtaining a further report. Essentially the single joint expert's report is to be seen as the first step in the valuation process. If one of the parties has legitimate reasons for not being happy with the report, they should be allowed to obtain further information before deciding whether to challenge the single joint expert's report, subject to the court's agreement. However, the cost of obtaining a further report must be considered in relation to the sum involved. In some cases, where the sum involved is not significant, a further report may be considered disproportionately expensive and therefore leave will not be granted by the court.

When Each Party Instructs Their Own Expert
If it is agreed or ordered that each party should instruct their own expert, rule 35.12 of the Civil Procedure Rules states that the court may, at any stage, direct a discussion between experts for the purpose of requiring the experts to identify and discuss the expert issues and where possible, reach an agreed opinion on them. The court can also direct that, after meeting, the experts should prepare a statement for the court confirming the issues on which they agree and those issues on which they disagree and a summary of reasons for disagreeing. It must be noted that where the experts do agree, this does not bind the parties, unless the parties expressly agree to be bound by the agreement.

Where each party is to instruct their own expert to prepare a valuation report, rule 35.11 of the Civil Procedure Rules provides that where one party has disclosed a report to the other, that other party can rely on it if they so choose, thus obviating the need for their own report, or alternatively instead of their own report.

Although it is an obvious point, it is worth remembering that a party who fails to disclose an expert's report may not use the report at a hearing or call the expert to give oral evidence unless the court gives permission, as stated at rule 35.13 of the Civil Procedure Rules.

It is fair to say that the guidance for instructing experts, within ancillary relief proceedings is very clear and practical. If practitioners follow part 35 of the Civil Procedure Rules and the Best Practice Guide provided by the President's Ancillary Relief Advisory Group, the instruction of experts, whether jointly or individually, should be relatively straightforward and problem-free.

[1] President's Practice Direction (2001) FLR 997
[2] P v P (Financial Relief: Illiquid Assets) (2004) EWHC 2277
[3] Daniels v Walker (2000) 1 WLR 1382
[4] K v K (2005) EWHC 1070