Secretariat Consulting PTE Ltd and others v A Company

Arbitration – Expert witness – Duty – Appellant companies in same group providing support and expert advice to different clients bringing arbitration proceedings against respondent petrochemical plant developer – Whether expert’s overriding duty to court or tribunal preventing expert from owing fiduciary duty of loyalty to respondent client – Whether duty of loyalty being owed to respondent – Whether appellants in breach of contractual duty to respondent to avoid conflict of interest – Appeal dismissed The respondent was the developer of a large petrochemical plant (the project) which engaged a third party as a project manager responsible for the engineering, procurement and construction management (EPCM) services for the project. The third party’s responsibilities included the provision of issued for construction (IFC) drawings which told the contractors what to build. The respondent entered into two contracts with a contractor for the construction of facilities in connection with the development. Disputes arose between the contractor and the respondent as a result of delays and the contractor commenced arbitration proceedings against the respondent in England (the first arbitration). The appellants were part of the same group of companies providing litigation support services. The respondent approached the first appellant to provide expert services in connection with the first arbitration, and it signed a confidentiality agreement subject to English law. The third party then commenced arbitration proceedings against the respondent in England (the second arbitration) and asked the appellants to provide quantum and delay expert services in connection with the second arbitration. The respondent informed the first appellant that its engagement by the third party created a conflict of interest. The third appellant denied any conflict of interest. The High Court found that the first appellant owed the respondent, as its client, a fiduciary duty of loyalty. The judge held that that meant that the second appellant 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. The third appellant was involved in some of the correspondence: [2020] EWHC 809 (TCC). The appellants appealed. Held: The appeal was dismissed. (1) The expert’s overriding duty was to the court or tribunal but that did not mean that the expert could not in law owe a fiduciary duty of loyalty to his client. In many cases, the client instructed an expert to provide extensive pre-trial services and then to give expert evidence at the trial. The client knew that, because an expert had to stand up before the judge or the arbitrators and say that his report was true to the best of his knowledge and belief, and represented his honest opinion, the expert would only be prepared to do that if he or she had first ensured that the pre-trial work had led to the formation of a position which the expert could support. None of that was contrary to any duty of loyalty: complying with the overriding duty to the court was the best possible way in which an expert could satisfy his professional duty to his client. (2) However, in a case such as the present, no purpose was served by designating the relationship as a fiduciary one. There was a contract here with an express clause dealing with conflicts of interest. A fiduciary duty of loyalty would not add to or enhance the obligations arising from that clause. Depending on the terms of the retainer, the relationship between a provider of litigation support services/expert, on the one hand, and his or her client on the other, might 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. That was not contradicted by the expert’s obligations to the court. But it was neither necessary nor appropriate to find the existence of a freestanding duty of loyalty in the present case. Accordingly, the first appellant owed the respondent a contractual duty to avoid any conflict of interest and, the conflict check having been carried out across the group, the undertaking given by the first appellant in its retainer bound all the companies in the group. They were all providing the same form of litigation support/expert services. Therefore, in all the circumstances, there was a conflict of interest. That was not to say that the same expert could not act both for and against the same client. Large multinational companies often engaged experts on one project and saw them on the other side in relation to a dispute on another project. That was inevitable. But a conflict of interest was a matter of degree. The overlaps of parties, of role, of project, of subject matter made it plain that, in the present case, there was a conflict of interest: Bolkiah v KPMG [1999] 2 AC 222, Marks & Spencer plc v Freshfields Bruckhaus Deringer [2004] EWCA Civ 741, Akai Holdings Ltd v RSM Robson Rhodes LLP [2007] EWHC 1641 (Ch), Georgian American Alloys Inc v White & Case LLP [2014] EWHC 94 (Comm) and Sweeney v Voluntary Health Insurance Board [2020] IECA 150 considered. (3) That was sufficient to dispose of the appeal. This was not one of those cases which turned on establishing, to the appropriate standard, that there was a risk of confidential information leaking out. There was a breach of the obligation to avoid conflicts of interest and that was an end of it. It also decided the issue by reference to the terms of the retainer, which was a much more satisfactory method than by reference to the more nebulous concept of fiduciary duties.  The result was a reflection of the terms of the original retainer. It was perfectly possible for a group, 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 had been given in relation to any other entity in the appellants’ group. Charles Hollander QC and Max Evans (instructed by Fox Williams LLP) appeared for the appellants; Roger Stewart QC and Shail Patel (instructed by King & Spalding LLP) appeared for the respondent. Eileen O’Grady, barrister Click here to read a transcript of Secretariat Consulting PTE Ltd and others v A Company