Sometimes a judgment comes along that serves as a template for how not to conduct litigation effectively. Imperial Chemical Industries Limited v Merit Merrell Technology Limited  ticks every box in relation to presentation of the case, disclosure failings, discredited witnesses and partisan experts. The number of lessons that can be extracted from the case are too many to include in a single article so here is Part 1 covering presenting your case, disclosure and witness evidence. Part 2 will address the many issues with expert evidence which arose.
This was not the parties’ first appearance before the court. This was a quantum trial which followed a trial on liability in 2017 and was the sixth judgment in the proceedings between the parties.
The case concerned work performed by Merit Merrell Technology (“MMT”) for ICI at a paint manufacturing plant. The project took longer than originally anticipated and exceeded the initial budgeted costs. ICI withheld payments from MMT and in the liability judgment Fraser J found that ICI had decided that the best way to keep the project cost down was to push MMT to insolvency. Eventually it dismissed MMT from site alleging repudiatory breaches of contract.
ICI alleged that a large proportion of MMT’s work were substantially defective and sued MMT for the recovery of alleged overpayments. At the trial on liability Fraser J concluded that ICI had repudiated the contract. The quantum trial therefore focused on the value of MMT’s works as well as a counterclaim for damages.
Lessons to be learnt
1. Don’t outstay your welcome
In the liability judgment the judge stated that “further wasteful and expensive litigation ought to be avoided if possible.” That warning was unfortunately not heeded. The quantum trial was originally listed for 4 days but had to be extended to 8 days. This can’t have helped the judge’s views of the parties. He said:
“Some parties…seem to believe that the justice system will devote to them unlimited judicial resources to resolve each and every tiny point of disagreement...[The parties] have…consumed far more than their fair share of judicial resources already…”
2. Present your case clearly
When dealing with quantum the court needs to have a clear explanation of what figure each party considers is the correct one it should adopt. Here the judge described ICI’s approach as being:
“…inviting the court to think of a number, as long as it is lower than the one sought by MMT.”
There were various documents submitted by the parties which attempted to explain the figures but these did not find favour with the judge who said:
“…I find this approach extremely unhelpful. It is a more sophisticated way of saying – the court has the trial bundle; here are the figures; please just get on with it.”
3. Don’t rely on evidence which is directly contradictory to findings made in a liability judgment
Although the judge had made clear findings of fact during the liability trial, including a finding that MMT’s works were not defective, ICI’s witness, Mr Boerboom, continued to maintain this position in his evidence. This did not impress the judge. Although ICI’s counsel sought to suggest that “no disrespect was intended”, the judge remarked that this was “reassuring” but “not the point”.
4. Don’t ignore the contemporaneous evidence
Documents which were created at the time of the events in question are usually extremely valuable evidence of what happened. Part of ICI’s witness evidence was described by the judge as being “wholly disingenuous…positively misleading and…directly contrary to the text of a vast number of contemporary emails…”
On the other side of the fence the quality of MMT’s key witness evidence was assisted by the fact it was consistent with letters and emails he had written to various individuals at the time in question. MMT’s evidence was described as being “open” and “frank” as well as “accurate and reliable”.
When faced with witnesses whose testimony does not align with the contemporaneous evidence, judges can take an extremely dim view as to the veracity of their remaining evidence.
5. Don’t contradict earlier evidence you have given
In the liability trial, Mr Boerboom on behalf of ICI said he did not know why the Project Manager had resigned. By the time of the quantum trial he had come up with an explanation. However, this did not help persuade the judge who said of the explanation that it was not:
“…corroborated in any document whatsoever, and by now I have reached the point where I would not accept anything Mr Boerboom says about this project without some form of independent corroboration.”
This witness’ attitude to the facts was described as being “reprehensible” and bearing “remarkably little, if any, resemblance to the truth”.
6. Don’t penalise a party for taking advantage of its legal rights
One of the reasons that Mr Boerboom gave for dismissing MMT from site was its decision to initiate adjudication proceedings against ICI. The judge described this attitude as “highly regrettable” and penalising a company for taking advantage of its legal rights.
7. Know when it’s time to give up
ICI abandoned its reliance on one of its witnesses half way through the afternoon of the last day (i.e. the 8th) of the quantum trial. The judge lamented that the abandonment of this evidence should have come earlier than it did. Had it done so it would have saved time, cost and court time.
8. Watch your witness statements
This time it is not ICI but MMT that came in for criticism from the judge. In the liability trial, the judge gave a warning about MMT’s witness evidence which was described as being “curiously worded and extraordinarily brief.” In that trial one witness statement contained all of MMT’s evidence. The other two witness statements simply said they agreed with the first statement or identified certain passaged which could not be corroborated.
Faced with this criticism the first time round, MMT submitted witness statements for the quantum trial which were instead described as having “some peculiarities”. This time round MMT duplicated over one hundred paragraphs of evidence, simply changing the first person to the third person where needed and vice versa. This resulted in MMT being ordered to re-serve the witness statements, striking out the duplication. The judge gave a stern warning that all litigants should be alive to:
“Statements are not supposed to be drafted by those who equate length with substance, and regardless of expertise with the copy and paste functions of word processing functions, witness statements must be drafted in accordance with the Civil Procedure Rules. Nor should such documents include lengthy quotations from contemporary documents…There is absolutely no good reason, in any case, for the regular and continuing failure to pay attention to the rules concerning witness statements.”
9. Direct evidence is key
ICI’s case was based largely on seeking to undermine valuations which were made by the then Project Manager who had detailed knowledge of the works. When presenting its case ICI did not produce any direct evidence from anyone who had actually been involved in the majority of the works in question or who knew something about the subject matter. On the other side of the fence MMT’s witnesses had been involved in the project at the relevant time, had a detailed knowledge of the works and were described as being “credible and honest”.
10. Get on top of your disclosure
There were numerous issues during the litigation in relation to disclosure including late disclosure of documents which had been in ICI’s possession.
One of the witnesses admitted he had kept notebooks but said these had not been asked for by anyone and had since been destroyed. This was not looked on favourably by the judge.
The conduct of ICI serves as a reminder of the need to ensure disclosure of documents is dealt with promptly and that individuals involved in disputes are advised of the need to preserve relevant documents. Here the judge said:
“ICI during this litigation have not conducted themselves in accordance with their obligations on disclosure. Further, ICI have had their solicitors…make incorrect statements in evidence to the court on several occasions…These failures by ICI are highly regrettable and are entirely out of the norm for commercial litigation.”
11. Don’t assume a Scott Schedule will help
A Scott schedule can often be a useful way of setting out the parties’ respective positions. Here that was not the case. Both parties produced their own schedule because they could not agree on a single one. It’s not surprising that what was produced did not assist. The judge said:
“…with the parties at daggers drawn over practically everything, the use of such a document would not be effective in terms of narrowing disputes and enabling a saving of costs.”
Critically here the judge had not given any direction for the parties to produce a Scott Schedule and there had been no agreement over the format of the schedule or what it should contain.
So what was the outcome of the case? You’ll need to wait for Part 2 to find out…
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