Risk Update

Litigation Support / Expert Conflicts — English Court of Appeal on Conflicts Rules, Contracts, and Professional Standards

Posted Dan Bressler

Fascinating piece from Kwok Kit Cheung, partner at Deacons. The article is worth reading in full for much more context, detail and analysis: “An arbitrator’s duty to avoid conflicts of interest” —

  • “In Secretariat Consulting Pte Ltd v A Company [2021] EWCA Civ 6, England’s Court of Appeal held that, depending on the terms of the retainer, the relationship between a provider of litigation support services/expert and his or her client, may have one of the characteristics of a fiduciary relationship, namely a duty of loyalty or, to put it another way, a duty to avoid conflicts of interest. In this case, there was a contract with an express clause dealing with conflicts of interest and since a fiduciary duty of loyalty would not add to or enhance the obligations arising from that clause, considering the issue further was unnecessary for the disposition of the appeal.”
  • “In March 2019, the respondent’s solicitors approached Secretariat Consulting Pte Ltd (SCL), a Singapore subsidiary of the Secretariat group (which group provides litigation support services and act as delay and quantum experts in construction arbitrations) to provide arbitration support and expert services in Arbitration 1, in connection with the causes of delay and disruption to packages A and B.”
  • “Having received the Confidentiality Agreement, the respondent’s solicitors wrote to K (the individual at SCL who was going to be the lead expert and who had signed the Confidentiality Agreement) asking him to confirm that he was not conflicted to act as independent expert witness in the matter, which he did.”
  • “In October 2019 Secretariat International UK Ltd (SIUL) was approached by the third party to provide arbitration support and expert services in respect of quantum in Arbitration 2. SIUL ran a conflict check (which involved all entities in the Secretariat group) which revealed the engagement of SCL by the respondent. K wrote to the respondent’s solicitors stating that since the third party’s contract with the respondent was for EPCM works for the full complex, and their engagement was in relation to the evaluation of delays on the construction subcontract for non-process buildings, their view was that working on the two matters (in different offices) would not constitute a ‘strict’ legal conflict and that his firm also had the ability to set the engagements up in a manner so that there was the required physical and electronic separation between the teams.”
  • “On 5 March 2020, the respondent’s solicitors wrote to K to say that they would like to expand the scope of their instructions to include expert witness services in the matter of an arbitration in which the respondent was defending claims brought by the third party. Then, on 10 March 2020, the third party wrote to the tribunal in Arbitration 2 to confirm that M of Secretariat had been engaged as the third party’s quantum expert and was already working. On 12 March 2020, the respondent’s solicitors wrote to SCL to say that there was a conflict which could give rise to a risk that SIUL might use the respondent’s confidential information.”
  • “The Technology and Construction Court granted an injunction preventing SIUL from doing any further work in Arbitration 2. It held that SCL owed its client (the respondent) a fiduciary duty of loyalty, which meant that SIUL could not provide similar expert services to a third party, who was making a claim in another arbitration against the same respondent arising out of the same project and concerned with the same or similar subject matter.”
  • “It said that where a fiduciary duty of loyalty arises, it is not limited to the individual concerned, but also extends to the firm or company and may extend to the wider group. The court distinguished the issue of confidential information and said that the fiduciary obligation of loyalty is not satisfied simply by putting in place measures to preserve confidentiality and privilege. Such a fiduciary must not place himself in a position where his duty and his interest may conflict. This was the first time in the English jurisdiction that an expert had been found to owe a fiduciary duty to its client.”
  • “The Court said that none of this should be taken as saying that the same expert cannot act both for and against the same client. Of course, an expert can do so. Large multinational companies often engage experts on one project and see them on the other side in relation to a dispute on another project. That is inevitable. But a conflict of interest is a matter of degree, the Court said, and the overlaps of parties, role, project and subject matter made it plain that in the present case, there was a conflict of interest.”
  • “The Court said that the result in this case was a reflection of the terms of the original retainer. It was perfectly possible for a group like Secretariat, if it thought it commercially sensible to do so, to make plain that its representations as to conflict of interest and its undertakings for the future were based solely on the entity involved, and that, despite the scope of the conflict check that they had undertaken, no such representations or undertakings were given in relation to any other entity in the Secretariat group.”