Complex liability cases: learn from past mistakes
A recent case contains essential guidance for those relying on experts in highly technical cases, say Anthony Greenwood and Leanna Mailer
“I cannot leave this case without making [two] observations. The first relates to the expert reports. Such reports must (a) append what they say they append; (b) identify clearly and accurately the facts upon which they are based; (c) state clearly and prominently any key points of disagreement with the opposing side; and (d) include reference to facts known to the expert which have, or may have, a significant bearing on the ?issue, even if unfavourable to his client’s cause. They must also be as a concise ?as possible…”
These words formed the ‘postscript’ to the judgment of Mr Justice Christopher Clarke in the case of Balmoral Group Ltd v Borealis (UK) Ltd (and two others) [2006] EWHC ?1900 (Comm).
Fast forward, to the words of the very same Mr Justice Clarke, on day 21 of the trial of Kingspan plc v Borealis UK and another, in June 2012: “I have been looking at the expert evidence. The expert evidence for both parties, leaving aside the tank design expert, and leaving aside the legal experts, and leaving aside the finance experts, runs to 1,137 pages. That is more than my copy of the Old Testament, the New Testament and the Apocrypha. It is true that in my copy of those works they are in single spacing, but in my copy they are in 12 point font, whereas one of the largest reports appears to me to be in ten point font… I am not sure when I am supposed to read them…”
He continues in the judgment in ?Kingspan: “The parties have swamped the court with a vast amount of material, which they have been preparing over several years… experts’ reports have been filed of considerable complexity and in ordinate length, with voluminous appendices and considerable repetition or overlap… the inordinate size of the material and scattergun approach adopted, particularly by the claimants, is an enemy to understanding.”
In both of these heavyweight product liability claims, Borealis’ bespoke metallocene polymer ‘Borecene’ was said by the respective claimants, Balmoral in the first instance, Kingspan in the second, to have been the cause of the cracking of tens of thousands of rotationally moulded polyethylene oil storage tanks. Balmoral had manufactured 55,000 such tanks, approximately 5,000 had failed; Kingspan manufactured 115,000 of which 25,000 had failed. A core question for the court was whether Borecene contained a defect which was the cause of the failure of the tanks. Balmoral’s case was that Borecene was deficient in its resistance to stored oil (kerosene), Kingspan’s that Borecene’s ultra violet protection package was deficient, such that in heat and sunlight (primarily in sunny Ireland and the United Kingdom) the tanks were exposed to a heightened risk of cracking.
Balmoral claimed losses in excess of £70m; Kingspan claimed losses exceeding £100m, plus costs in each case.
In the two claims, 16 technical experts, some of them world leaders in their field, gave evidence spanning polymer properties and molecular structure, polymer engineering, rotational moulding, UV stabilisation, finite element analysis and tank design.
Dismissing both claims, Mr Justice Clarke found that the claimants had failed to establish that Borecene was not a suitable raw material for use in the manufacture of an above ground oil storage tank. Rather, the tanks had failed because of poor rotational moulding practices by the claimants, inappropriate tank designs, inappropriate incorporation of pigments and inadequate quality assurance procedures.
Given the judgment in Balmoral, when the court made very clear comments about expert evidence, some fairly obvious questions arise. Did solicitors in the second action simply ignore the judge’s comments about the state of the expert evidence in the first? And, more particularly, did the claimants’ expert evidence fail to address satisfactorily the lessons from the Balmoral action?
Amber lights
A clue is provided by the judge in paragraphs 740 to 745 of the Kingspan judgment, where the court summarised its impression of the reports and evidence of eight of the 11 technical experts. None of the witnesses’ integrity was questioned, but certain observations may be regarded as ‘amber lights’ for those relying on experts in highly technical cases.
For instance, regarding the claimant’s UV expert (otherwise characterised as “honest and competent”) the court found it “surprising” that an entire set of relevant test results had been omitted from a report. The evidence of an expert in the field of rheology was “not entirely easy to follow (perhaps because of language difficulties) and [the judge] found some of it apparently contradictory. Some was not vouched by or was inconsistent with the sources which were said to support it.” The judge “was surprised at (her) inability to recognise what the x and y axes of a molecular weight distribution graph in her report represented”.
Of a further expert addressing UV resistance: “He carried out conventional… comparator tests. When these showed no significant difference as between Borecene and [other grades] in terms of UV resistance [in contradiction of his clients’ case], he stopped them.” And later: “He was asked to presume that the tanks cracked because of the raw material… I was left with an impression that he was more focused on establishing evidence of a difference in ?order to support the presumption than ?on a more open enquiry as to the causes ?of failure.”
Of the claimants’ expert in polymer engineering: “What he described… as the goal of his evidence when carrying out… tests was to find a difference between Borecene and (other) materials. Once that was achieved he did not carry out further tests, e.g. on a larger range of samples.” In respect of the same expert, the judge found it difficult to place reliance on tests for which the conditions “depart[ed] so markedly ?from reality”.
Finally, of the claimants’ rotational moulding expert: “He used to work for Dow, a competitor of Borealis, all his working life where he developed a good working relationship with Kingspan… During his time at Dow he carried out a number of tests to which he did not refer in any of his reports, some of which… revealed concerns that he had about the brittle failure resulting from the [pigmentation] process used by Kingspan. I found his evidence of limited assistance. His evidence on topics other than rotomoulding and processing is not expert and [the defendants’ expert’s] experience on those topics is considerably greater.”
The judge made the significant observation that the experts’ reports (and, it is suggested, the claimants in particular) were prepared against the background of “a running argument between the parties as to whether or not Kingspan was bound to state exactly what caused the tanks to fail, Borealis contending that they could not understand the case against them without this information and Kingspan contending that it was not necessary for them to establish exactly why the tanks failed, provided that a defect in Borecene was the cause. Although the latter proposition is correct (provided that a ‘defect’ is understood not merely as a difference between Borecene and other materials but as a characteristic which makes it incapable of being used to rotomould satisfactory tanks), what exactly caused the tanks to fail and what exactly was the reason for any increased tendency to degrade, if it can be discerned, is of substantial evidential significance.”
Narrow approach
The ongoing argument between lawyers apparently had the more inhibiting and deleterious effect on the claimants’ experts’ reports, than those of the defendants. ?Of course the defendants had no obligation to discharge a burden of proof (although it was incumbent upon the defendants’ experts, if suggesting an alternative cause of tank failure, to address the basis of that contention in their reports), but it appears that the narrower approach adopted by the claimants had the effect of focusing its experts only on differences between the defendants’ Borecene and other resins available to Kingspan, without sufficient regard to the need to prove that any difference was a defect (as defined by the judge) and caused the tank failures.
The judge’s approach is much more aligned to the broader view taken by the defendants’ technical experts, that issues of processing, tank design, pigment incorporation and quality assurance procedures provided a better vision of the factors in play.
Complex liability cases: key points
What are the lessons for practitioners and litigants/insurers in complex product liability cases?
1. It is dangerous for lawyers or litigants to channel the thinking or approach of experts.
2. It is inadvisable to rely on technical reports that make no reference to the entirety of available test data and/or only make reference to favourable data.
3. Weight should be given to tests that closely reflect the real-life experience of the subject matter of the litigation, rather than on tests that provide the highest prospect of supporting the forensic aims of one of the parties.
4. Test regimes should not be abandoned at the point where data ceases to be advantageous to one party, when it is likely that, if continued, adverse data might be produced. Indeed, parties should be alert to the potential implications for the strength of their case of adverse test results.
5. The expert must have the expertise claimed.
6. The expert must be free of any substantive connection with either of the parties.
7. Reports should be as concise as possible. In circumstances where (as here) defendants might also be criticised for excessively lengthy technical evidence, it will not be overlooked that defendants will have been responding to the claim advanced against them.
8. Experts best support a case when their position is consistent. In the judgment, Mr Justice Clarke hinted at the shifting nature of Kingspan’s experts’ position, even in reports disclosed just six weeks before a three-month trial, the result of which was heavily dependent on a well-argued technical case. Not an attractive position for a claimant.
9. Finally, practitioners and their clients should consider the impact on their expert witness of any of the foregoing factors when an expert comes to be cross-examined. On a number of occasions in the Kingspan trial, its experts suffered moments of discomfiture which might have been avoided if a different approach had been taken.