Lessons to be learned from the case of Energysolutions EU Ltd v Nuclear Decommissioning Authority

Introduction

This is the second in our series of Bytes on this significant procurement case. The first Byte looked at record keeping in procurement. In this Byte we consider the role witness evidence played. For those preparing for a procurement challenge:

• How do you decide who to call for trial?
• How ought you to prepare your witnesses?
• Can you pay your witnesses?

Deciding who to call for trial

The Nuclear Decommissioning Authority called 8 witnesses.  One of the NDA's witnesses, Mr Grey, was cross-examined over a period of 4 days.  Whilst the Judge noted that it is a matter for any party to decide who to call, Mr Grey had found himself at the centre of a great many of the challenges alleging manifest error, whereas other evaluators (who had not been called as witnesses) had far more knowledge of some of those subjects than he did.   Given the obligation of transparency which attaches to procurement procedures, explaining what happened "is made far more difficult for a contracting authority if the directly relevant personnel who were centrally involved in that process are not called as witnesses" [1]. This echoes the principles of transparency which we addressed in our first Byte. Similarly, the NDA chose to claim privilege over the input its solicitors, Burges Salmon, had made into the evaluation process. The Court noted that "In this sense, the reliance on legal privilege by the NDA will not necessarily assist it in its defence to the claims brought by ES" [2]

In trials, the general rule is that any fact which needs to be proved by the evidence of witnesses is to be proved at trial by their oral evidence in public (see rule 32.2(1) of the Civil Procedure Rules). In complex procurements a very large number of people are likely to have been involved in evaluation and it may simply be impossible to call all of those witnesses in the agreed time allocated for trial. 

The parties have to decide (in order to comply with the Allocation Questionnaire) who they are going to call fairly early on in the claim. A robust approach is to go through the pleadings and identify the main areas of fact which are in dispute. In most procurement challenges, this is likely to involve considering calling, or at least serving evidence on behalf of, most if not all of the evaluators who were responsible for deciding on scores, and any moderator or supervisor involved in over-seeing the process. 

Where there is an obvious over-lap between one or more witnesses in terms of the evidence they give, and the written witness statements served before trial essentially make the same point, it may be decided not to call both witnesses.  However caution should be exercised before deciding not to call a particular witness as witnesses respond differently to cross-examination (or at least, acting normally, are likely to do so). 

Preparing witnesses for trial

Providing evidence at trial and being cross-examined can be a daunting experience, and it is appropriate to explain the procedure to witnesses. Preparation can also include taking the witness through the Court bundle and explaining the issues in dispute. What is not permitted is to suggest to the witness what they might say [3].

In order to help witnesses feel robust about answering questions, some witness familiarisation programmes will give witnesses tips and techniques for handling cross-examination.  This can include repeating the question back in order to ensure it is properly understood, avoiding answering a simple "yes or no" if that answer is not appropriate.   Care should be taken to ensure that this does not lead to an "orchestration" of the witness evidence. 

In the NDA case, the Judge observed what he described as an unhelpful "linguistic device" used by the NDA witnesses to avoid answering even simple questions put to them directly, and instead to embark on an exposition sketching out their side's case.   The Judge contrasted the approach of some of the NDA witnesses at trial with the "wholly convincing" evidence the same witnesses gave later at a different hearing (see below). 

Whilst it is human nature for a witness to want to defend his or her position, an overly defensive approach can be counter-productive, particularly in cases involving allegations of lack of transparency.

Can you pay witnesses?

A dramatic event unfolded just before the formal handing down of the NDA judgment. Freshfields, the solicitors for the Claimant, wrote to the Court and Burges Salmon (solicitors for the NDA) to say that they had become aware that the Claimant had entered into an agreement with one of its witnesses whereby he was to be paid a bonus of £100,000 in the event that the Claimant was successful in the litigation (and indeed it was subsequently discovered that similar arrangements had been entered into with other of the Claimant's witnesses).  The formal handing down of the judgment was therefore postponed, and another two day hearing took place at which the Claimant's witnesses were cross-examined on this state of affairs. 

The Court had invited the NDA to specify which parts of the draft judgment it considered were impacted by the revelations of the way in which witnesses were paid, but NDA instead adopted a blanket approach.  It applied to strike out the whole claim on the basis that there was a significant risk that the whole trial had been unfair. 

The Court dismissed the NDA's application to strike out.  The Court found that whilst the agreements entered into with the witnesses were clearly contrary to public policy (as to which see further below), the agreements had not corrupted the content of the evidence given by the witnesses.  Those witnesses would not have known that this kind of success fee arrangement was contrary to public policy, to recompense the witnesses for the significant time and effort involved in preparing for trial would have appeared reasonable, and indeed incentive arrangements were common within the nuclear industry as a whole. 

The Court further noted that in any event, many of the allegations being brought by the Claimant turned on the documents themselves, and on the evidence provided by the NDA, rather than on the evidence provided by the Claimant's witnesses. 

The legal position regarding payment of witnesses is that witnesses can be paid for their reasonable expenses and loss of time, but the payment cannot be contingent on the success of the litigation and/or the evidence that the witness gives.  Solicitors have a duty in this regard to ensure that the evidence presented by witnesses to the Court is the whole truth.  For more information on the approach the Court has taken in the past, see the Court of Appeal judgment in Odyssey Re (London) Limited and anor v OIC Run-Off Limited [2000] EWCA Civ 71.

For more information, please contact:

Emily Heard, Partner & Head of Procurement

Jessica Irvine, Solicitor

[1] Energysolutions EU Ltd v Nuclear Decommissioning Authority [2016] EWHC 1988 (TCC) at 323

[2] Ibid at 234

[3] R v Momodou [2005] EWCA Crim 177