Forensic accountants who act as expert witnesses in civil or criminal proceedings traditionally enjoy immunity from claims for breach of contract and/or negligence in respect of the evidence that they give, or intend to give, to the court by way of report or oral testimony. But several recent cases have undermined this immunity.

As background, expert witnesses who give evidence in the field of accountancy will belong to generic organisations such as the Academy of Experts and the Institute of Expert Witnesses and to specialist groups such as the forensic group of the ICAEW and the Network of Independent Forensic Accountants. While such organisations have their own guidelines there is no single scheme of accreditation or regulatory body governing the conduct of all expert witnesses. Nor are there any prescribed sanctions in the courts’ rules for breach of the duties and responsibilities governing the conduct of expert witnesses.

While expert accountants can find themselves the subject of certain claims (including perjury, perverting the course of justice and contempt of court) in contrast to other work they might carry out, they are not exposed to claims for breach of contract and/or negligence in respect of the evidence that they give to the court. The justification for such protection has been that all witnesses should be able to present their evidence freely and without undue pressure or fear of reprisal.

Yet the following recent developments have undermined expert witness immunity.

The House of Lords in the case of Hall v Simons [2000] removed (with retrospective effect) the immunity that was previously enjoyed by advocates, an immunity that had been justified on grounds similar to those in support of the immunity that is afforded to expert witnesses. Currently there are no signs that the removal of such immunity has affected the ability of accounting expert witnesses to present cases in court.

Until recently the courts had been reluctant to impose cost orders against expert witnesses. It was held in the case of S v S [1995] that forensic accountants made a very important contribution in the field of ancillary relief (divorces, nullifications and judicial seperation) and that their willingness to act as expert witnesses should not be undermined by the risk of adverse costs orders. However, the court in Phillips & Others v Symes & Others [2004] made an order against an expert witness and held that such orders should be made where an expert witness was found to have acted recklessly or in flagrant disregard of their duties to the court.

So far there is no evidence that this has deterred forensic accountants from acting as expert witnesses. You should bear in mind that the imposition of wasted costs orders against legal represntatives was a pre-cursor to the abolition of advocates’ immunity.

The Court of Appeal confirmed in the case of General Medical Council v Meadow [2006] that immunity does not extend to disciplinary action by an expert witness’ professional body in respect of evidence that they give, a decision that has been welcomed by the ICAEW’s forensic group. Judges can (in addition to the parties to court proceedings) make a referral to an expert’s professional body in circumstances where there has been professional misconduct and/or they consider the expert to be unfit to practise.

Forensic accountants may, therefore, find themselves subject to sanction by, for example, the disciplinary committee of the ICAEW or the Accountancy & Actuarial Discipline Board.

There is scope for challenges to expert witness immunity on the basis that it is inconsistent with article 6 of the European Convention on Human Rights in that it deprives people of a right of access to the courts (an argument that was raised in the Hall case).

Forensic accountants are unlikely to be inhibited from acting as expert witnesses or from giving truthful and fair evidence in court if immunity were removed, particularly taking into account the protection that is afforded to them by professional indemnity insurance.

In contrast to witnesses of fact, the role of expert witnesses is to provide opinion evidence based on their professional experience and expertise. But there are persuasive arguments that experts should be held accountable if they stray outside their remit and give evidence in breach of the obligations imposed upon them.

Certainly in relation to civil proceedings, there are already indications that, where professional expert witnesses offer their services in return for remuneration, it may be difficult to justify the retention of immunity from claims for breach of contract and/or negligence.

Carolyn Wilson is a solicitor in Kingsley Napley’s dispute resolution department

Accountancy Age: Expert grilling

Accountancy’s expert witnesses do not always get an easy ride.

Kingston Smith’s Emile Woolf was criticised by the AIDB over erroneous verbal claims, and not answering questions during the Mayflower tribunal, criticisms strongly rejected by the firm.

‘We believe that the AIDB will need to remedy the defects in its procedures that have been highlighted by the tribunal,’ a Kingston Smith spokesman said in 2007.

The panel had stated in its report that the best interests of the case were not served by the AIDB calling Woolf as their ‘independent expert’ since he had been closely involved in the investigation and advised the AIDB to separate investigative and expert roles in future.

Kingston Smith retorted: ‘We invited the tribunal to correct what we regard to be factually incorrect and prejudicial findings… the tribunal’s decision did not

focus on the appropriate and key issues and criticised Mr Woolf in relation to the scope of the investigation, a matter that was wholly outside of his control.’

Kevin Reed