Expert valuation witnesses in the UK – problems and solutions
| Published date | 01 August 2002 |
| Date | 01 August 2002 |
| DOI | https://doi.org/10.1108/14635780210435038 |
| Pages | 316-353 |
| Author | Neil Crosby,John Murdoch,Anthony Lavers |
| Subject Matter | Property management & built environment |
JPIF
20,4
316
JournalofPropertyInvestment&
Finance,Vol.20No.4,2002,
pp.316-353.#MCBUPLimited,
1463-578X
DOI10.1108/14635780210435038
ACADEMICPAPERS
Expertvaluationwitnessesin
theUK±problemsand
solutions
NeilCrosbyandJohnMurdoch
FacultyofUrbanandRegionalStudies,TheUniversityofReading,
Reading,UK,and
AnthonyLavers
SchoolofRealEstateManagement,OxfordBrookesUniversity,
Oxford,UK
KeywordsProperty,Valuation,Legalmatters,Expertwitness
AbstractThispaperaddressestheperformance,trainingandorganisationofexpertvaluation
witnessesintheUK.Previousresearch,basedonanalysisofprofessionalnegligencecasesinthe
UKcourts,hadfoundthatexpertvaluationwitnessesdonotalwaysperformrationally,for
exampleinformingcourtsthatvaluationscanbeundertakenwithinacceptabletolerancesof
valuationaccuracy,whilegivingexpertevidencethatdifferedbymorethanthesetolerances.
Therewasevidencethat,whilewellawareoftheiroverridingdutytothecourtortribunal,expert
witnesseswerefrequentlyproducingclient-biasedvaluations.Suchfindingsprovokedquestionsas
towhetherstandardswouldbeimprovedbytworecentlyproposedalterationstocurrentpractice:
eithertheintroductionofasystemofcompulsorytrainingandaccreditationforsuchwitnesses,
orachangefromtheprocessbywhichexpertvaluationevidenceisnormallypresented(oneexpert
witnessforeachpartytoadispute)totheuseofasingleexpert,appointedeitherbytheparties
jointlyorbythecourt.Acaseanalysisisperformedandconclusionsdiscussed.
Introduction
Theconceptofvaluationvariationisimportanttoanydiscussionof
valuations.Logicsuggests,andthelawrecognises,thatavaluerisunlikelyto
beabletoidentifythe``correct''marketvalue,becauseitisimpossibleforthat
valuetobeobjectivelyidentifiedforanyparticularpropertyatanyparticular
time.ThereisawealthofmaterialintheUSA,theUKandAustralia
comparingactualsalespriceswithvaluationsand,toalesserextent,
valuationstovaluations(forexample,intheUSA,Webb(1994),Coleetal.
(1986);YoungandGraff(1999):intheUK,DriversJonas/IPD(1997);Matysiak
andWang(1995);Hutchison,etal.(1996),Crosbyetal.(1998);andAustralia,
NewellandKishore(1998);Parker(1998)).Thisresearchhasbeeninterpreted
Theresearchregisterforthisjournalisavailableat
http://www.emeraldinsight.com/researchregisters
Thecurrentissueandfulltextarchiveofthisjournalisavailableat
http://www.emeraldinsight.com/1463-578X.htm
The authors acknowledge the funding for this research project provided by the Royal
Institution of Chartered Surveyors Education Trust and the Toby Sutton award from The
Company of Chartered Surveyors, and also acknowledge the assistance of Melanie Oughton,
research officer in the Department of Land Management and Development at the University of
Reading with the survey analysis.
Academic papers:
Expert valuation
witnesses
317
in various ways; however, the important point for this paper is that the
valuation is a single point estimate within a distribution..
There has been some criticism of valuers' performance as expert witnesses.
An ex-member of the UK Lands Tribunal, in a paper looking at the position of
expert witnesses, described cases where judges had criticised valuers (Rees,
1994). Crosby et al. (1998), in research into the ``margin of error'' concept in UK
valuation negligence cases, raised major questions over the performance of
expert witnesses in around 40 such cases dating from 1977. It appeared that the
distribution of values referred to above was commonly underestimated by
expert valuation witnesses in UK cases. The authors discussed whether the
evidence from the cases showed that expert witnesses were providing to the
court valuations which they themselves did not believe, or that they were
incapable of valuing to the tolerances they were quite willing to advise for
others of the same profession. By concluding that the margin of error concept
was flawed and should be abandoned, they avoided having to answer the
question of whether expert witnesses were either incompetent or
unprofessional.
The previous research findings raised a number of detailed questions
concerning the standard of performance of expert valuation witnesses and
whether this would be improved, either by introducing a system of compulsory
training and accreditation for such witnesses, or by altering the process by
which expert valuation evidence is normally presented (one expert witness for
each party to a dispute). Both these potential reforms were recently considered
by the Woolf Committee, as part of a general review of the civil justice system
(Woolf, 1996).
This paper considers the performance, training and organisation of expert
valuation witnesses from the perspective of various participants in the
litigation process: expert witnesses, arbitrators and independent experts,
judges and lawyers. The paper reviews the nature of expert evidence and the
current position on qualification and training of expert witnesses. It then
examines the duties, both legal and professional, of expert witnesses and goes
on to outline the specific research issues which the paper addresses, noting the
criticisms by judges and others of expert witnesses' performance and the
reforms discussed by the Woolf Committee. The secton following this contains
the results of surveys of expert witnesses, arbitrators and independent experts,
judges and lawyers; the penultimate section summarises the findings and the
final section presents conclusions.
Expert evidence in context
The nature of expert evidence
The main focus of this paper is on expert valuation witnesses in contentious
proceedings, whether before a court, tribunal, arbitrator or other form of
judicial or quasi-judicial body. However, it is important to note that the legal
position described here is not restricted to cases in which there is an actual
appearance before the relevant decision-maker. For example, the Civil
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Procedure Rules 1999 (CPR) apply to ``an expert who has been instructed to give
or prepare evidence for the purpose of court proceedings'' (CPR 35.2). Similarly,
the RICS Practice statement: ``Surveyors acting as expert witnesses'' (RICS,
1997) applies ``where any chartered surveyor'' ... agrees or is required to
provide expert evidence (whether oral or in writing) which may be relied upon
by any judicial or quasi-judicial body in the United Kingdom''. However, the
duties imposed on expert witnesses do not apply to an expert who is retained to
advise on the strengths and weaknesses of a potential claim, at a time when
litigation, although under consideration, has not yet reached even the pre-trial
stage.
The UK civil justice system has recently undergone major revision,
following the report of a committee appointed by the Lord Chancellor under the
chairmanship of Lord Woolf (Woolf, 1996). In the interim report of that
committee (Woolf, 1995), it was noted that expert witnesses might give two
different types of evidence:
(1) Factual evidence. Because of their expertise, the evidence of experts will
have greater weight than that of unqualified witnesses. An example
given in the report is that of evidence from a surveyor as to
measurements made or examinations carried out.
(2) Evidence of expert opinion. This type of expert evidence, which is by far
the more important type, constitutes an exception to the general rule
that evidence of a witness's opinion is not admissible.
It was at one time the law that, while an expert could state an opinion in order
to assist the court to reach a decision, the expert should not be asked to pass an
opinion on the ``ultimate issue'' between the parties, since that would usurp the
function of the judge. However, that rule is no longer applied with any degree of
rigidity. In professional negligence actions against valuers, expert witnesses
are routinely asked for their opinion on the ``ultimate issue''. This is because
they are asked, not only for a critical analysis of the defendant valuer's
methodology, but also whether the defendant's valuation was within or outside
the range of valuations which competent and careful valuers could have
reached. Other types of case too may turn on the value of a property, so that an
expert witness who gives an opinion of that value is effectively pronouncing
upon the ``ultimate issue''.
Qualification and training of expert witnesses
Qualification as an expert ± the current law. In theory, a person called as an
expert witness need not possess any formal qualification. What matters is
actual expertise. ``An expert may be qualified by skill and experience, as well as
by professional qualifications'' (James Longley and Co. Ltd v. South West
Regional Health Authority [1983] 25 BLR 56 at p. 62, per Lloyd, J.)
Despite this, the courts in professional negligence actions normally insist
that evidence of what might reasonably be expected of the defendant should
come from members of the same profession. In Whalley v. Roberts and Roberts
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