Expert Witnesses: Oaklion Properties Ltd v Denbighshire County Council [2021]

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21 March 2021

Oaklion Properties Limited v Denbighshire County Council was heard in the Upper Tribunal (Lands Chamber) in January 2021, and the decision was handed down on 12 March 2021. The case was concerned with the compulsory purchase of a property and what value should be attributed to that property. The points that the tribunal made about experts, are relevant to expert witnesses being used in all types of court proceedings.

The role of the expert witnesses

The role of the expert witness is to provide independent expert or technical opinion or analysis to the court.

It is not unusual for some cases to require expert evidence from more than one discipline.  The expert from one discipline will often need to think about how the evidence from the other discipline will impact his or her views. 

The role of an expert witness in court proceedings is to assist the court or the judge.  The role of the expert is not to help to ensure that a particular side wins its case. In civil cases, the role of experts is governed by CPR part 35. Part 35.3 sets out that:

  1. is the duty of experts to help the court matters within their expertise.
  • this duty overrides any obligation to the person from whom experts have received instructions or by whom they are paid. 

So, against this backdrop, let’s consider the facts of the case.

Background

As stated, this case was concerned with the compulsory purchase by the respondent, the council, of a property which had previously been used as an amusement arcade and residential accommodation. The property had been damaged by fire in 1993 and it remained in its damaged state at the time it was acquired, about 20 years later. The parties were in dispute about the compensation payable pursuant to section 5 of the Land Compensation Act 1961 (“the Act”). Each party relied on expert evidence from two disciplines, building costs and valuation.

Section 5 of the Act sets out the rules for assessing compensation, which at the relevant date were as follows:

(1) No allowance shall be made on account of the acquisition being compulsory:

(2) The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise:

(6) The provisions of rule (2) shall not affect the assessment of compensation for disturbance or any other matter not directly based on the value of land.

The expert evidence

The claimant’s valuation expert assessed the value of the property, using the residual method, at £929,000 and, using the comparative method, at £300,000.

The respondent’s valuation expert assessed the market value using the residual method at between -£618,234 and -£936,219, depending on the assumptions used. The expert assessed the value using the comparative method at £60,000. So, clearly, the difference in opinion of the valuers was very wide. 

As stated, the parties also had their own building cost experts. The claimant’s building cost expert assessed the cost of rebuilding the property at £432,981, and the respondent’s expert assessed the figure at £1,529,057. Again, both experts were very far apart.

Neither of the building costs experts had seen the property in its damage state before it had been redeveloped. The claimant’s building costs expert relied on witness evidence from individuals who had personal knowledge of the building after the fire.   The respondent’s expert relied on evidence of a chartered civil and structural engineer, who had conducted a report in 2011 on the condition of a separate property which shared a party wall.

When considering the building cost expert evidence on the cost of the redevelopment, the tribunal said it was unable to accept the evidence that had been submitted on behalf of either party as a “wholly reliable guide”.  The tribunal thought that the claimant’s evidence during cross-examination was persuasive and well considered but, was concerned that the expert had relied too heavily on the evidence of the claimant’s directors about the condition of the property. In respect of the respondent’s expert, the tribunal highlighted that the report that the information in the report that the expert had relied on may not have been independent.

The difficulty with the valuation experts, said the tribunal, was that the valuation experts had, “simply adopted the estimate of total building cost provided by their instructing party’s expert. That was a disappointing and unhelpful approach for experts in one discipline to take to the range of views expressed by experts in a different discipline.   It suggests a lack of objectivity and a misunderstanding of the expert’s function. It effectively precluded [the valuation experts] from any meaningful narrowing of their valuation difference.

In other words, as it was the experts’ duty to assist the court, the experts should have considered all of the building costs evidence submitted by both parties and not just the evidence submitted by their instructing party. As the tribunal stated, “It was a duty of the valuation experts to recognise the tribunal might not accept the evidence of their teammates and to consider the market value of the property having regard to the range of evidence presented.

Despite its criticisms of the expert evidence, the tribunal was able to make an assessment of the compensation payable by the respondent for the compulsory acquisition of the property. The tribunal assessed the figure at £140,000.

Comment

This case is a very useful reminder to all the lawyers instructing expert witnesses.  It is crucial to ensure that the expert understands that its duty is to the court and not to the instructing party. As it is possible that the court (or tribunal) will not accept all the evidence and arguments submitted by the instructing party, the expert must therefore consider the full range of views presented. A comprehensive and clear letter of instruction will help to ensure that the expert understands its role and objectives.

© Melissa Worth 2021

The Dispute Adviser

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