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16 November 2017

“I didn’t see it, but can I still say it?” – witness statements from office holders

Office holders involved in litigation can often face difficulties in giving evidence in the claims which they pursue. As they are generally not direct witnesses to the events concerned, they cannot give their own evidence on the factual background to the claim.

To deal with this, there is a long-standing practice for office holders when litigating to produce detailed witness statements giving their own view of the evidence which they have gathered during the course of their investigations – even though they are not technically “witnesses” to the matters they are discussing. However, this established practice could on one view conflict with the strict letter of the Chancery Guide rules on witness statements. The guide includes rules that witness statements should be “confined to facts of which the witness can give evidence”, and should not “provide a commentary on the documents” or engage in “submissions about the issues”.

There are no reported cases on this point and we are therefore pleased to confirm that this established practice has recently been blessed by the Court, who confirmed it does not contradict the Chancery Guide. Charles Russell Speechlys are acting for a liquidator claimant in bringing a professional negligence claim against a company’s former accountants. In accordance with normal insolvency litigation practice, the liquidator’s witness statement set out the company’s position on the claim in full, including detailed discussions of the documentary evidence he had collected and the conclusions which he drew from them, in the normal way. Following the exchange of witness statements, the defendant argued that the liquidator’s witness statement should be struck out virtually in full. It argued that the statement mostly dealt with matters to which the liquidator was not a witness of fact, and gave the liquidator’s views on those matters, in breach of the Chancery Guide. The defendant suggested that the witness statement was more akin to a skeleton argument, and should not be permitted.

The judge agreed with the liquidator that it was acceptable for a liquidator’s witness statement to provide details of their investigation, describe the contemporaneous evidence to the Court, and explain the liquidator’s case. He considered that the witness statement would be useful to a trial judge in explaining the claimant’s case, and providing a helpful “map” for the Court at trial to set out the claim. The judge agreed that there was no other meaningful way a liquidator could present their evidence.

This case is a useful reminder that whilst the Chancery Guide is of course applicable to Insolvency Practitioners when preparing a witness statement, and should be followed so far as possible, the Court is willing to make exceptions for office-holders, who are not necessarily able to give direct evidence regarding events. The Court appreciates that they should be afforded the opportunity to go through the findings of their investigation, and explain which evidence the company intends to rely upon. It is useful to note that this hearing was not in the Companies Court, where judges come across liquidator’s witness statements every day and thus may be more familiar with the type of evidence a liquidator may give, this was a Part 7 Claim in the Business and Property Courts, where claims by liquidators are perhaps less frequent.


If you have any queries or if you require any further information on this please do not hesitate to contact Simon Ridpath on Simon.Ridpath@crsblaw.com or another member of our team. 

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