RBS Rights Issue Litigation

Expert evidence is admissible only where it draws on recognised expertise governed by recognised standards and is reasonably required to resolve the proceedings. The party seeking permission bears the burden of satisfying both requirements. Evidence that merely expresses an expert’s subjective assessment, finds facts or describes what the expert would have done is inadmissible.

Permission may be deferred where the potential assistance and risks of proposed evidence can be assessed more reliably after other experts have reported. A fixed trial date should be postponed only exceptionally and as a last resort. The court must nevertheless give decisive weight to procedural and substantive fairness, including whether maintaining the date would create a sufficient risk of unfairness or impair the orderly conduct of the trial.

In group litigation concerning an RBS rights-issue prospectus, the court determined two case-management questions following the eighth case management conference. The first was whether the parties should have permission to adduce expert evidence from an equity analyst about necessary prospectus information, materiality, market knowledge and the defendants’ reasonable-belief defence under FSMA. The second was whether the first trial should be postponed because the defendants’ disclosure exercise had impeded the preparation of witness statements.

The proposed expert evidence related principally to the statutory requirements governing information necessary for investors to make an informed assessment. The adjournment application sought to move the trial from 7 December 2016 to 6 March 2017.

1. Expert-evidence application refused for the present. Under rule 35.1 of the CPR, the court must determine both whether expert evidence is admissible and whether it is reasonably required to resolve the proceedings. Admissibility requires recognised expertise governed by recognised standards. An expert may express an opinion on assumed facts but may neither find facts nor give evidence about what the expert personally would have done. The applicant bears the burden of showing that the evidence is admissible and reasonably required: paras [10]–[20].

2. Equity analysts possessed expertise in researching, modelling and evaluating investment opportunities. Their assessments were nevertheless shaped by individual research, outside information and subjective market judgments. Their expertise therefore provided no safe standard or litmus test for deciding what information was necessary under section 87A of FSMA for investors generally to make an informed assessment: paras [45]–[51].

3. The evidence was not strictly necessary. It remained uncertain whether it would assist the court or instead obscure the statutory question by substituting the perspective of an investment professional for that of the protected investor. The defendants had consequently failed to justify its admission. They could renew the application after the subject-specific experts had reported, using refined questions and, if desired, a summary of the proposed evidence: paras [52]–[62].

4. Adjournment granted. Postponing a fixed trial requires exceptionally strong justification and is an order of last resort. The discretion must be exercised under the overriding objective. Procedural and substantive fairness was the most powerful consideration in litigation of this scale and complexity: paras [73]–[77].

5. The defendants bore substantial responsibility for an unfocused and insufficiently controlled disclosure process. Their evidence supporting the application was less than wholly satisfactory, and further delay prejudiced the claimants. Nevertheless, maintaining perspective, a three-month postponement was relatively short and was unlikely materially to delay final determination. The sufficient risk of unfairness to the defendants justified a short and ordinarily final adjournment. Trial was moved to 6 March 2017, subject to further directions on evidence and the pre-trial timetable: paras [78]–[81].

This was a first-instance case-management judgment following the eighth case management conference in the group litigation. Earlier directions had conditionally contemplated investment-information or equity-analysis evidence, expressly subject to review once the proposed expert questions were available. This judgment refused present permission for that evidence and postponed the first trial.