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Issues with Expert Evidence

Many cases before the courts involve expert reports – such as medical evidence in personal injury cases; accounting evidence in loss of profit cases; and valuation evidence in property cases. However as a 2016 Supreme Court case shows, unless the report demonstrates that the expert has relevant expertise; and expresses the opinion in a way that allows a court to understand how the opinion was reached, it may be rejected as evidence.

The particular case was a complex fire/arson dispute relating to a fire at a property at Mosman in Sydney. At the time of the fire, significant extensions/renovations were underway. The insurer declined the claim on the basis that the property owner had set, or colluded in setting, the fire and had made misrepresentations in relation to his insurance claim.

The parties agreed that the cost of rectifying the actual fire damage was just over $990,000.00; but the property owner also made an alternate claim on the basis that if the repairs had been carried out (for the agreed amount) to enable the extensions/renovations to finish, the property could have sold for $7.5M – rather than the $4M for which it actually sold in its fire damaged condition.

The property owner relied on an expert valuer’s report in support of this alternate calculation of his losses. Unfortunately for the property owner, the valuer did not express his report in a way that enabled the court to understand how he had reached his conclusions. Because the court could not follow a reasoning process; it could not determine whether the opinions expressed were based on the expert applying his specialised knowledge and skill to the assessment of value. Consequently, the report was not admitted into evidence.

The property owner appealed this ruling to the Court of Appeal, but was unsuccessful.

Although the case involved many issues other than that of expert evidence; it is a reminder that litigants who seek to rely upon expert reports need to ensure they are carefully prepared or they may ultimately not be admitted into evidence (leaving a significant gap in the litigant’s case): Rolleston v Insurance Australia Limited [2016] NSWSC 1561.

Liability limited by a scheme approved under the Professional Standard Legislation

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