Permission to rely on new expert quantum report refused on grounds of unreasonable delay

This blog post looks at the recent TCC case of DPM Property Services Limited v. Emerson Crane Limited, which serves as a further reminder, following Denton v. TH White Ltd, that parties to litigation must be proactive and avoid unnecessary delays when seeking to rely on expert evidence.

Background

  • DPM brought a claim against Emerson for £115,220, which represented the balance of work it had carried out at Emerson’s premises in Dagenham.
  • Emerson brought a counterclaim against DPM for alleged defects in DPM’s works in the sum of £160,175 plus VAT. The main claim and counterclaim are listed for trial in January 2018, and there is a very tight timetable in place.
  • The judge had previously ordered Emerson to provide a Scott Schedule in respect of the counterclaim. Emerson did this, but had marked the costs estimates for 23 of the 28 alleged defects as "TBC". The only two items that were costed totalled £46,923.
  • In March 2016, Emerson’s quantum expert, Mr Woods, submitted that the total rectification cost of the defects listed in the Scott Schedule was £550,000. Due to the large discrepancy between this figure and the original figure in the Scott Schedule, DPM immediately wrote to Emerson requesting a proper application to amend the counterclaim and/or the Scott Schedule. Emerson declined to do so.
  • In August 2016, Mr Woods provided a further report, on behalf of Emerson, stating that the total rectification costs were £506,551. DPM objected to this on the basis that Emerson was attempting to widen the scope and value of its counterclaim (by introducing new allegations of defective work not listed in the Scott Schedule).
  • At a hearing in January 2017, the judge stipulated that (1) Emerson was debarred from adducing evidence at trial of any issue not particularised in the Scott Schedule and (2) the trial judge should ignore parts of Emerson’s evidence that went beyond its pleaded case.
  • In October 2017, Emerson issued an application for permission to rely on a new expert quantum report produced by Mr Woods. In this report, Mr Woods purported to put figures against all of the items that were previously listed in the Scott Schedule as "TBC", and stated the total cost of repairs was £332,671.34 (yet another new figure for the counterclaim).
  • The judge gave permission (albeit in unclear terms) that Emerson could rely on Mr Woods’ updated report and pursue a counterclaim for losses amounting to £332,671.34. However, this permission was subject to a cap of £160,175 plus VAT on the losses actually recoverable by Emerson (ie the original figure pleaded by Emerson).

The Appeal

DPM appealed this decision on the basis that the judge:

  • had wrongly concluded that the losses in Mr Woods’ report had been particularised in the Scott Schedule
  • had failed to follow the January 2017 order debarring Emerson from submitting evidence at trial of any issue not particularised in the Scott Schedule, and
  • was wrong to treat the £160,175 plus VAT as a cap on Emerson’s counterclaim.

The decision

Delay
  • The ten month delay between the hearing in January 2017 and Emerson making its application in October 2017, to rely on Mr Woods’ updated report, was the issue that troubled the court the most.
  • It was not clear whether the PTR judge had taken Emerson’s ten month delay in producing the new expert reports into account, and, as such, the court looked at the issue of delay afresh. Applying the test in Denton the court found:
    • Emerson’s failure to provide its expert reports for ten months following the hearing in January 2017, and then seeking to rely on them just three months before trial, was a “serious and significant failure”. Interestingly, Emerson accepted there was no good reason for the delay.
    • For this reason it was neither just nor reasonable, in all the circumstances of the case, to allow Emerson to rely on the updated expert evidence of Mr Woods.
    • The combination of the ten month delay and the absence of any reason for it, lead to the “inevitable result” that DPM’s application to exclude Emerson’s report should be permitted.
Debarring order

The court found:

  • The specific wording of the debarring order in January 2017 meant that Emerson’s counterclaim was limited to £46,923 (ie the items listed in the Scott Schedule not marked "TBC").
  • Despite being in receipt of Mr Woods’ reports, Emerson had never attempted to update the Scott Schedule or amend its alleged loss figures in accordance with the CPR. As such, Emerson’s counterclaim was limited to £46,923.
  • There had been an inconsistency in approach in the two previous decisions; if Emerson had not been permitted to rely on new material in January 2017 it should not have been allowed to do so in October 2017, just three months before trial.
The cap
  • Whilst it appeared the judge’s decision to impose a cap was intended to assist DPM, taking this arbitrary step was incorrect and had created difficulties for DPM because it was required to address a variety of new figures at the last minute.
  • The judge also commented that using the originally pleaded sum as a cap was wrong, stating: “it is rather old-fashioned and artificial to talk about a cap in a case of this sort, where there is a later pleading (the Scott Schedule) which addresses quantum.”

Conclusion

This case is a further reminder following Denton of the obligation on parties to be prompt when providing expert evidence on which they wish to rely. The early exchange of expert evidence is key to allow each party to consider the strength of its own position, and delay in providing this may result in the offending party facing restrictions on the evidence it is permitted to rely upon.

This case is also a reminder for parties to take into account the formal requirements of the CPR when amending or updating losses claimed. What is clear from this case is that the court will not tolerate delays in providing expert evidence without good reason, especially where there is a tight court timetable in place (as was the case here).

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.