Courts Consider Admissibility Of Expert Evidence In Mis-Selling Claims

The High Court has held that expert evidence as to the suitability of swap products sold to London Executive Aviation Ltd (LEA) by Royal Bank of Scotland (the Bank) and the risks associated with those products was not admissible under Part 35 of the Civil Procedure Rules (CPRs).

The judgment was handed down in February 2017 but has only recently been reported.

This is a positive decision for banking institutions, supporting the approach taken in Darby Properties last year.

CPR 35

The rules governing expert evidence are contained in CPR 35 and give the courts broad powers to control the use, scope and format of expert evidence. The relevant rule when considering the admissibility of expert evidence is CPR 35.1 which provides that "Expert evidence shall be restricted to that which is reasonably required to resolve the proceedings".

Previous decisions

It is established law that expert evidence should not opine on the extent of a legal duty, such a question being one to be properly considered by the court itself. Instead, it should be used where there is a recognised expertise in a discrete area governed by recognised standards or rules of conduct and that expertise is capable of influencing the courts' decision on any issue it has to decide. Even then, the court can choose not to hear that evidence if it considers that it would not assist, i.e. where the court could come to a fully informed decision without hearing such evidence.

In two recent swaps mis-selling cases, Battrick v Royal Bank of Scotland and St Dominic's Ltd v Royal Bank of Scotland, HHJ Havelock-Allan considered the need for expert evidence. He allowed the applications in both cases, commenting in St Dominic's that expert evidence can act as a "yardstick either to assist in determining what the [legal] duty encompasses or to assist in resolving whether the defendant's conduct fell short of the required standard". He also suggested that the customer and the bank were not on a level playing field during the case because of their relative knowledge of the products and that expert evidence could appropriately assist to alleviate any such inequality of position.

However in Darby Properties Ltd v Lloyds Bank , Master Matthews departed from the approach adopted in Battrick and St Dominic's and held that there was no recognised body of expertise in the issues in respect of which the proposed expert evidence was concerned and that the evidence was not reasonably required for the Court to...