In brief - Supreme Court decision in Sprayworx v Homag provides further guidance

The Supreme Court of NSW recently held that privilege in a communication will not be waived or lost if the communication has not influenced the content of an expert witness's final report.

Communications between expert witnesses and their instructing solicitors

In New South Wales, communications between an expert witness and their instructing solicitors are, as a general rule, not discoverable on the grounds of privilege. However there are significant exceptions to that rule. 
The Supreme Court has recently given some further guidance on this difficult subject. In a recent case, Sprayworx Pty Ltd v Homag Pty Ltd [2014] NSWSC 833, the court decided that privilege in a communication will not be waived or lost if the communication has not influenced the content of the expert's final report, or may have influenced it but in relation only to form or peripheral matters. 
In determining the issue, the court inspected the communications to gauge whether, and to what extent, the report was influenced. Note that very different rules apply in other jurisdictions. 

Proceedings for supply of allegedly defective sanding machine

On 8 July 2006, Mr Nelson Pinto and Mr George Kanios of Sprayworx Pty Ltd entered into a contract with Homag Australia to purchase a Buetfering Optimat SCO313/QCH Diamond Wide Belt Sanding Machine ("Machine") for $223,600 plus GST. 
Sprayworx commenced proceedings in the Supreme Court of NSW, alleging that Homag supplied it with a defective Machine and seeking damages. Sprayworx's case is supported by the expert reports of Professor Farhad Shafaghi, engineer, dated 15 July 2013 and Mr Chris Katehos, forensic accountant, dated 24 July 2013.
Homag denies liability and alleges that Sprayworx's employees did not operate the Machine properly. 

Notice to produce expert drafts and communications with instructing solicitors

On 25 November 2013, Homag served a notice to produce ("Notice") on Sprayworx, Mr Pinto and Mr Kanios seeking documents in four broad categories. Categories 1 and 2 sought draft reports prepared by Sprayworx's experts and categories 3 and 4 sought communications between the two experts and Sprayworx or their solicitors.

List of privileged documents provided in response to Notice

In response to Homag's Notice, Sprayworx served a list of documents outlining the documents that Sprayworx did not intend to produce on the grounds of privilege. 
Homag accepted that the documents it sought were the subject of client legal privilege, that is, the documents had been produced for the dominant purpose of providing legal services to Sprayworx which, pursuant to the Evidence Act 1995 (NSW), is not required to be given to the other party in the proceedings. However, Homag argued that, amongst other things, Sprayworx had waived its client legal privilege because the documents had been used in such a way that it could be said to have influenced the content of the expert reports. 
The parties agreed that the Supreme Court could inspect the documents within that list to consider whether a document has influenced the contents of the report in a way that requires disclosure. 

Communications did not influence the content of the report and therefore did not waive privilege

After carefully examining the solicitor's comments in the solicitor's correspondence and the corresponding paragraphs in Professor Shafaghi's draft reports and final report, Associate Justice Harrison concluded that the solicitor's comments could not be said to have influenced the content of the report in such a way that the use or service of the report would be inconsistent with maintaining the privilege in those materials. 
By this her Honour means that although the solicitor's comments asked Professor Shafaghi to makes changes where he believed they were warranted, it did not affect the substance of his final report.
Her Honour arrived at essentially the same conclusion when looking at Mr Katehos' report and relevant correspondence. 

Expert reports and legal professional privilege

Sprayworx v Homag provides a timely reminder of the delicacies of engaging expert witnesses. Here are a few key tips to keep in mind in relation to expert reports.
  • Expert reports should be the independent product of the expert uninfluenced as to form or content by the exigencies of litigation.
  • Experts are entitled to change their mind and should not be inhibited by fear of exposure of a draft report. However, working notes, file notes and draft reports do not attract privilege because they are not communications.
  • Disclosure of the expert's report for the purpose of reliance on it in the litigation will ordinarily result in an implied waiver of the privilege in respect of the brief and the documents referred to therein.
  • Privilege cannot be maintained in respect of documents used by an expert to form an opinion or write a report, regardless of how the expert came about the document.

Desirable characteristics of expert reports

Expert reports should:
  • provide objective unbiased opinion in relation to matters within their expertise
  • state the facts, assumptions and materials upon which their opinion is based
  • make it clear when a particular question or issue falls outside their expertise
  • state instances where there is insufficient data to reach a conclusion properly
  • provide photographs, plans, calculations, analyses, measurements, survey reports or other similar documents to the opposite party at the same time as the exchange of reports 

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2024.

Related Articles