In the complex world of civil litigation, instructing expert witnesses is a common and often necessary step. Experts provide vital opinions on technical, medical, or other specialist matters that lie outside the knowledge of the judge. But what happens when you instruct an expert, pay their fee, receive their report, and then, for whatever reason, decide not to serve it on the other side or rely on it in court? Can you still recover those costs from the losing party?
This is a frequent dilemma in costs assessment, and the answer, particularly on the standard basis, is far from straightforward. It highlights a key tension between the reasonableness of a decision made at the time and the proportionality of the cost viewed retrospectively.
Drawing on the principles under the Civil Procedure Rules (CPR), we explore the recoverability of costs incurred for expert reports that remain “unseen” by the court and the opponent.
The Starting Point: Standard Basis Assessment
When a court orders one party to pay the costs of another, these costs are usually assessed on the standard basis. CPR 44.3(2) sets out the core test: the court will only allow costs that are:
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- Reasonably incurred: Was it a reasonable step to incur the cost at the time?
- Reasonable in amount: Was the sum paid for the work reasonable?
- Proportionate to the matters in issue: Does the cost bear a reasonable relationship to the value, complexity, and other factors of the case (as outlined in CPR 44.3(5))?
Crucially, under the modern standard basis, proportionality can override reasonableness. CPR 44.3(2)(a) states that “Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred.”
Furthermore, the burden of proof is on the party seeking to recover the costs (the receiving party) to demonstrate that they meet these tests. And, importantly, if the court has any doubt about whether the costs were reasonably and proportionately incurred or were reasonable and proportionate in amount, that doubt must be resolved in favour of the paying party (CPR 44.3(2)(b)). This is a significant hurdle compared to the indemnity basis where doubt favours the receiving party.
Hurdle 1: Was it Reasonable to Instruct the Expert at the Time? (The Francis Principle)
The first question is whether the decision to instruct the expert was reasonable when that decision was made. A key principle here comes from cases like Francis v Francis & Dickerson, which establishes that the reasonableness of incurring a cost is assessed based on the circumstances and knowledge reasonably available at the time, not with the benefit of hindsight.
So, if based on the information you had (the pleaded case, client instructions, available evidence), it was reasonable for a competent solicitor to believe that expert evidence was potentially required to investigate or support a relevant issue in the case, the cost of obtaining that initial report might be considered reasonably incurred under this test. The fact that the report ultimately didn’t help your case, or the issue it related to was dropped, doesn’t automatically make the initial decision unreasonable.
The court will look at factors like:
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- The nature and complexity of the issues requiring expert input.
- The apparent need for specialist knowledge at that stage.
- The suitability of the chosen expert.
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Contemporaneous records (attendance notes, letters of instruction) justifying the instruction are vital here.
Hurdle 2: Is the Cost Proportionate Given the Outcome? (The CPR 44.3(5) Test)
Even if instructing the expert was deemed reasonable at the time (passing the Francis test), the cost must also be proportionate. This is where the fact that the report was not served or used becomes a major issue.
Proportionality is assessed by looking at the cost in relation to:
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- The sums in issue in the proceedings.
- The value of any non-monetary relief.
- The complexity of the litigation.
- Any additional work caused by the opponent’s conduct.
- Any wider factors.
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The paying party will argue, often persuasively, that a cost incurred on an expert report that provided no positive contribution to your case, was not used to advance your arguments, and did not assist in resolving the dispute, cannot be considered a proportionate expense to recover from them. While the Francis principle discourages hindsight for reasonableness, hindsight is very much applied when assessing proportionality against the ultimate context and outcome of the case.
The lack of utility of the unserved report weighs heavily against its proportionality, regardless of how reasonable the decision to instruct was initially. It’s hard to argue that a cost which yielded no benefit to the successful prosecution (or defence) of the claim bears a “reasonable relationship” to the CPR 44.3(5) factors when viewed at the end of the case.
The Role of CPR Part 35
CPR Part 35 governs expert evidence. While you need the court’s permission to rely on expert evidence (CPR 35.4), you don’t necessarily need permission to instruct an expert for advice or investigation. The recoverability issue primarily falls under CPR 44, not whether CPR 35 permission was obtained (as permission wouldn’t be sought for an unserved report). However, CPR 35.4(4) does give the court the power to limit the recoverable amount of expert fees, which, if exercised, would cap recovery regardless of proportionality.
The Impact of Costs Budgeting
If the case was subject to costs management under CPR 3, the existence (or absence) of an approved budget covering the expert’s fee is critical.
If the cost for instructing this expert was included within an approved phase of your costs budget, CPR 3.18 states that the court will not depart from that approved budget amount unless there is “good reason” to do so. This provides a strong presumption of recoverability for budgeted items, shifting the burden onto the paying party to show a “good reason” why the budgeted amount should not be allowed.
Conversely, if the expert fee was not budgeted for, or significantly exceeded the budgeted amount without approval, recovery becomes extremely difficult on the standard basis.
Practical Considerations for Recovery
To maximise the chances of recovering costs for an unserved expert report:
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- Document Everything: Keep clear records showing why the expert was instructed at the time, based on the information available then.
- Justify the Need & Choice: Be prepared to explain the complexity of the issue requiring expert input and the suitability/reasonableness of the chosen expert and their fee.
- Address Proportionality: Acknowledge that the report wasn’t used but argue why the cost remains proportionate in the context of the overall case, perhaps emphasizing the complexity of the issue even if the report didn’t provide the hoped-for answer.
- Rely on the Budget: If the cost was within an approved budget, this is your strongest point.
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The paying party will inevitably focus on the lack of utility and the proportionality argument, asking: why should we pay for an expensive report that didn’t even help your case?
Conclusion
Recovering the costs of an expert report that was instructed but ultimately not served on the standard basis is an uphill battle. While the initial decision to instruct the expert might satisfy the Francis test of reasonableness (judged at the time), the modern proportionality test under CPR 44.3 is a significant hurdle.
The fact that the report provided no positive contribution to the litigation process makes it vulnerable to challenge as being disproportionate to the overall value, complexity, and outcome of the case.
Your best prospect of recovery, assuming the initial instruction was genuinely reasonable, lies in demonstrating that the cost was included within a court-approved costs budget, triggering the protection offered by CPR 3.18. Without budget approval, you must persuade the court that, despite its lack of use, the cost remains proportionate in the broader context of the litigation – a difficult argument against an opponent keen to resolve doubt in their favour.
Navigating these issues requires a detailed understanding of costs principles and persuasive advocacy at assessment.
