Estera Trust (Jersey) Ltd & Anor v Singh & Ors [2018] EWHC 1715
This case related to an application for relief under sections 994-996 of the Companies Act 2006 on the grounds that the company was being operated in a manner that was unfairly prejudicial to the applicants.
The witness statements which had been served during the course of the case were described by the Judge as
‘products of careful reconstruction of events and states of mind, based on a meticulous examination of all the documents in the case by the large teams of lawyers involved’.
However on cross-examination at trial it became apparent that the witnesses had little or no real recollection of some of the events noted and instead the statements had been predicated very much on what ‘would have been done’ or would ‘likely have been seen’.
Whilst the witness statements produced were not accused of deliberately seeking to mislead the Court, they had been based on the belief of the lawyers of what may have happened based on a reasonable assessment of the position rather than a true recollection from the witnesses. As a result of this it was noted that
“an inordinate amount of time and costs have been expended in preparing statements that are of limited value in resolving the factual disputes in this case.”
Witness statements do take a lot of time to prepare and rightly so – presenting the evidence in a detailed way should not be rushed and the benefits of presenting detailed evidence from witnesses, particularly where there is a dispute of facts which contributes to the issue of liability, cannot be understated. Indeed at cost management stage we find that the Courts are generally willing to accept/agree that this is a phase requiring notable attention.
Witness evidence is an important part of a claim however this case warns caution – if a statement is prepared it must be representative of the account the witness can give at trial and not include extensive detail which cannot be verified by within an oral account. If spending significant time and therefore incurring notable costs in preparing detailed statements, make sure they are accurate to the account of the witness. Whilst this perhaps an obvious point to make (and this case may be a rather difficult one for paying parties to draw upon unless a matter proceeds to trial) it still provides significant warning and any such incidences like this could result in significant costs consequences where the work undertaken to create an inaccurate statement are disallowed – after all, if the statements were to be found to be of limited use, how would the costs of preparing the same be justified?!