The Court of Appeal in Re Maximus Securities Ltd has given guidance on the test for bias, in a case concerning a challenge to the appointment of a joint expert. In this blog post, I draw out some practical tips for assessing the potential for bias.
Disclosure of Interest
In Maximus, the expert was unaware of the potential for bias when he was first approached by the respondent’s solicitors. He did not connect the wider valuation he had conducted with the relevant individual plot of land that was the subject of the dispute. Once you have approached a potential expert in a matter, make the potential for conflict or bias clear to the expert as soon as possible. Do not allow the expert to be the sole arbitrator of any potential for bias, and make these investigations as soon as possible.
What does independence mean?
The test for independence is of there being no risk that the expert will approach his or her task with a “closed mind”, rather than the appellants’ narrow construction of “independence of the parties”. This is a matter of fact and degree, but remains an objective test, namely what the fair-minded and informed observer would consider to be a real possibility of bias. Remind yourself to be objective when considering any potential for bias: the test is not what the solicitor (with his or her own relationship with the expert) considers to be impartial!
Relationship with the parties
A prior relationship with the parties does not disqualify an expert from involvement in the proceedings. The judge will decide the weight to be given to the evidence and to its admissibility. Be exhaustive in your discussions with the expert if there is a prior relationship. Be aware of the nature of any such relationships, and the extent to which the expert has already assessed or valued on behalf of one or other of the parties.
Actual conduct of the valuation
The extent to which the expert’s actual conduct of the valuation is material when assessing the independence of an expert is a matter of fact and degree. But when applying the fair-minded observer test, remember that the fair-minded observer is not the expert. The methodology used should not be assessed, but simply the chances of bias.
Prior valuation of the same subject
Maximus demonstrates that an expert assessing the same subject matter for a second time is not of itself suggestive of bias. However, this will depend on the circumstances of the case. The court will take account of the professional instincts of an expert and (as in Maximus) the amount of time that elapsed between the valuations. In this case, too, the valuations were of a slightly different nature. If your expert discloses valuation of the same subject, make thorough investigations of the similarities and differences between the two valuations. In Maximus, the expert was found not to have had any reason to connect two valuations as of the date of his appointment, which assisted the court in its conclusion that there was no real possibility of bias.
In summary
The courts will employ the fair-minded observer test with regard to all of the circumstances of both the dispute in question as well as any earlier valuations or interests of the expert. It is therefore imperative that you are aware of as much of any aspects of potential bias as early as possible, and that this scrutiny continues. Do not allow your expert to make that judgment call alone, or take assurances that there is no conflict without proper investigation.
