Ian Hutchinson & Anor v The Commissioners for HMRC

The without prejudice rule protects everything communicated in the course of a protected discussion, not merely admissions or communications deployed on the merits. There is no general exception for interlocutory applications or issues concerning the integrity or independence of expert evidence. Recognised exceptions must be applied narrowly. Unambiguous impropriety requires impropriety to be established unequivocally, leaving no room for reasonable argument. A query or comment by a solicitor on a draft expert joint statement does not, without more, amount to a material instruction under CPR 35.10. Communications between a solicitor and the party’s expert remain subject to litigation privilege unless the specific statutory or procedural exception is established.

The appellants appealed against the decision of the First-tier Tribunal, released on 8 July 2020, refusing their application for disclosure of communications between HMRC’s solicitor and HMRC’s expert, Mr Orrock. The application arose from exchanges between the parties’ experts while preparing a joint statement under CPR 35.

The appellants relied on inter-expert correspondence to allege improper interference with the expert’s independence and sought disclosure of the solicitor–expert communications. The FTT held that the inter-expert correspondence was protected by without prejudice privilege and could not be relied on. The central questions were whether an exception to that privilege applied and whether the solicitor–expert communications were disclosable as material instructions or otherwise lacked legal professional privilege.

1. Appeal dismissed. The inter-expert correspondence formed part of a continuous without prejudice discussion. CPR 35.12(4) reinforced that the content of experts’ discussions could not be referred to at trial unless the parties agreed.
2. The rule was not confined to admissions or to material deployed on the merits. There was no general exception for material used only on an interlocutory application or to challenge an expert’s independence. The exception concerning delay or acquiescence was confined to cases of that kind, such as Family Housing Association (Manchester) Ltd v Michael Hyde and Partners.
3. The court applied the stringent approach in Motorola Solutions Inc v Hytera Communications. Unambiguous impropriety required impropriety to be established unequivocally, leaving no room for reasonable argument. Improper interference with an expert might in principle qualify, but the evidence showed at most a plausible case or reasonable suspicion. It did not establish that Mr Orrock’s true opinion had been distorted or that his independence had been compromised.
4. No new exception was justified merely to police the rules governing expert evidence. Competing public policies, including the importance of expert independence, did not displace the without prejudice rule. Any new exception would have required the same stringent standard.
5. Even assuming the correspondence could be deployed, the solicitor–expert communications were protected by litigation privilege. Under CPR 35.10 and Lucas v Barking, material instructions are communications supplied as the basis on which the expert is asked to advise. The email relied on was a query or suggested wording, not an instruction requiring Mr Orrock to adopt a particular position. It therefore was not a material instruction. Nor was there any requirement that the solicitor’s communication be made openly to both experts, and privilege had not been waived.
6. The FTT’s decision was upheld. The court did not need to determine HMRC’s additional discretionary argument.

• Upper Tribunal (Tax and Chancery Chamber) — appeal from the First-tier Tribunal dismissed.
• First-tier Tribunal — application for disclosure refused; decision released on 8 July 2020. Permission to appeal granted on 13 October 2020.