1. The use of expert economic testimony to explain and interpret economic concepts relevant to legal proceedings can be
a good thing and, in the appropriate case, is to be encouraged. Much of the economic evidence presented at trials in Australia is “explanatory”, as contrasted to evidence that is based on data collation and the use of econometric techniques.
Such economic testimony which is properly presented and adheres to the court guidelines and rules of evidence can assist a court
in arriving at the correct result. I want to set out for discussion and comment some of those guidelines and rules, which play
an important part in the adduction of all expert evidence, but are frequently not adhered to by those preparing such evidence.
For the purposes of the paper I will focus upon the guidelines and rules applicable in the Federal Court of Australia.
2. Recently Justice Allsop of the Federal Court, in addressing the nature of economics and its utility at trial, quoted
John Maynard Keynes. “The theory of economics”, Keynes argued, “does not furnish a body of settled conclusions
immediately applicable to policy. It is a method rather than a doctrine, an apparatus of the mind, a technique of thinking,
which helps its possessor draw correct conclusions.”
3. Where statutes are considered economic by nature, it has been accepted that they may require experts in the field of
economics to assist in explaining how words apply in the specialised field. For example, Part IIIA of the Trade Practices Act 1974 (Cth) (‘TPA’) is part of an economic statute and, therefore, to understand it properly economic concepts and principles
should be considered.[2]
4. In BHP Billiton Iron Ore Pty Ltd v The National Competition Council [2006] FCA 1764, which dealt with third party access under Part IIIA of the TPA, the parties had not submitted that the phrase under consideration, ‘production process’, had a technical
or specialised meaning, and so the Court was obliged to construe those words in accordance with their ordinary and natural meaning.
5. That case did however raise the related question of how to use expert economic evidence to understand the context and
nature of statutes or provisions in a statute. In my view a court may be assisted by expert economic evidence as to the economic
objectives which might underlie a statute, although such objectives may also be found in the extrinsic material that may be legitimately
relied upon by the parties. In the BHP case I observed at [172]:
In the process of my reasoning, reliance has been placed upon relevant legitimate extrinsic material (referred to by the parties),
including the Hilmer Report. However, I have found helpful the discussion of the economic experts as to the nature and the context
in which Part IIIA is to operate, although in this regard this has been no more than an elaboration of the relevant legitimate extrinsic material
referred to me by the parties. I see nothing inappropriate in the court having regard to and admitting into evidence expert
evidence to inform itself as to the nature of and the context in which Part IIIA is to operate, just as it would be appropriate for the court to consider any economic writings on the subject: see Boral Besser at 454, [247] per McHugh J. By admitting the expert evidence for this purpose, the material is presented in evidentiary form
and all the parties know precisely the extent of the material that is before the court and that which is to be considered by the
court.
In Re Michael, Parker J (with whom Malcolm CJ and Anderson J agreed) discussed the relevance of economic expert evidence in informing the court
of the specialised usage of particular words or phrases. Importantly, his Honour continued (at 544, [107]):
Further, the expert evidence provides an appreciation of the nature and objectives of competition policy in the field of economics
and, in particular, of the regulation of essential infrastructure, so that the policy and objectives of the Act can be discerned
with a greater and more reliable appreciation of the possibilities. In addition, the potential relevance of some concepts and
provisions in the Act and Code can be more readily understood.
In Visa International Service Association v Reserve Bank of Australia [2003] FCA 977; (2003) 131 FCR 300, Tamberlin J made the following observation in relation to Re Michael and other cases involving admissibility of expert economic evidence (at [665]):
The emphasis in these cases is on informing and assisting the court with a view to illuminating an understanding of the terms
used in relation to the issues raised.
6. In Visa, Justice Tamberlin held that expert economic evidence was admissible to assist the court to understand the context and specialist
perspective of the issues in question that would give a further and more profound insight into the possible interpretation of
the relevant law. The court’s duty is still to determine the questions of fact and law, but it is better placed to do this
armed with the knowledge of experts in the field. He noted at [661] that:
[t]he present case is concerned with economic regulation by the [Reserve Bank of Australia] and it would be unrealistic to ignore
the guidance afforded by economic experts as to whether the terms have a meaning in the field of economics and as to the way
in which the concepts have been applied and operate in practice.
7. Justice Tamberlin concluded by agreeing with Justice Lindgren in Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 6) (1996) 64 FCR 79 that “it is not for an expert to give evidence as to the application of the legislative provision, as opposed to furnishing
evidence from the viewpoint of an economist with respect to what factors can or should be taken into consideration or ignored.”[3]
8. On the appeal in the BHP case, Justice Greenwood, with whom Justice Sundberg agreed generally, said in relation to the evidence of the economic experts
the following:
The appellants contend on appeal that the evidence of the economic experts is inadmissible as irrelevant. The evidence was admitted
on the basis of contextual elaboration of the extrinsic material. The evidence is relevant if it is evidence that if accepted
could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the
proceeding (Evidence Act 1995 (Cth), s 55(1)). Evidence of an opinion is not admissible to prove the existence of a fact about
the existence of which the opinion was expressed (s 76(1)) although, if a person has specialised knowledge based on the person’s
training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially
based on that knowledge (s 79). The normal role of an expert is to give an opinion based on clearly identified facts (Makita
(Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705), almost invariably assumed to be the facts, on the footing that those facts provide a proper foundation for an opinion within the
demonstrated discipline or field of specialised knowledge of the expert witness. Although s 79 of the Evidence Act seems to
operate on the footing that the opinion of a person wholly or substantially based on specialised knowledge is not precluded by
s 76(1) in the absence of proven foundation facts (Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157; (2002) 55 IPR 354 [10]; Neowarra v Western Australia (No. 1) [2003] FCA 1399; (2003) 134 FCR 208), little or no weight will be given to such an opinion (Ramsay v Watson [1961] HCA 65; (1961) 108 CLR 642) although the central point may simply be the question of admissibility, not weight (HG v R [1999] HCA 2; (1999) 197 CLR 414 at [39] – [44]; Trade Practices Commission v Arnott’s Ltd (No. 5) (1990) 21 FCR 324 at 327-330). That question does not arise here. In this case, the experts did not seek to offer an economic opinion related
to disputed or undisputed facts probative of a matter in issue. They sought to offer an historical or contextual explanation as
an elaboration of extrinsic material going to Part IIIA of the Act. It is difficult to see how that evidence is truly admissible
except perhaps in that unusual category of ‘expert non‑opinion evidence’ descriptive of a relevant element of
the economic discipline concerning the evolution of economic concepts of access to natural monopoly infrastructure, without offering
any opinion about facts in issue. In any event, the material is capable of being received by the court and considered by force
of Order 10, rule 1(2)(j) of the Federal Court Rules, by way of a submission rather than admissible evidence.
9. Before going to deal with expert economic testimony, I should mention the other way economic material can be put before
the court, as alluded to by Justice Greenwood in the BHP case.
10. In 1994, the Federal Court issued a Rule of Court which provides that the Court may:
… in proceedings in which a party seeks to rely on the opinion of a person involving a subject in which the person has
specialist qualifications, direct that all or part of such opinion be received by way of submission in such manner and form as
the Court may think fit, whether or not the opinion would be admissible as evidence.
11. This rule was introduced to counter a restrictive approach to the admissibility of expert evidence that was seen to
result from the decision of the Full Federal Court in Arnotts Ltd v Trade Practices Commission. There the Full Court held that an expert’s evidence in question was simply an expression of his opinions about the factual
correctness of the assertions in the pleadings and that this was not admissible. The Court held that an economist may legitimately
give his opinion about a question to be decided by the Court, but he or she must clearly identify and articulate the facts upon
which the opinion is based. This position was seen to limit the evidence that could be admitted, particularly where economic experts
present their opinion more as an argument than as evidence. This is a common characteristic of expert economic evidence given
the nature of the field of specialisation, and it was in large part for this form of expert opinion that the rule was introduced.
12. Justice French, in a paper delivered on the Role of the Court in Competition Law delivered on 26 February 2005, wrote of the rule:
A well constructed economic argument can be as beneficial to the court as a well constructed legal submission. If economists have
an ability to put argument directly to the court as part of the trial process rather than filtering it second-hand through counsel,
their role in the adjudication process is enhanced rather than downgraded. As Professor Brunt has observed of the rule:
It could also enable the economist-expert to assist the court in whatever capacity might prove useful to resolution of the issues.
The rule would appear to give scope for a written submission at any stage in the proceedings, including the pre-trial stage
and thus to widen the opportunity for economists to contribute to clarification of the issues and the assessment of the relevance
of evidence.
Notwithstanding the flexibility offered by the rule it is of course important to maintain the distinction between argument and evidence.
Where argument depends for its validity upon the finding of primary facts it will play no part in the course of consideration
if those primary facts cannot be found on the evidence.
13. It may be that greater use should be made of this rule in the appropriate case, particularly where the economic material
is largely explanatory.
14. I turn then to the provision of expert economic testimony.
15. The important matter to consider is placing the expert economic testimony or material before the court in the most appropriate
manner, and adhering to the guidelines of the court and the rules of evidence. There has always been a debate about the extent
to which a legal practitioner should assist an independent expert in the preparation of his or her evidence, but it is clearly
an important role of the legal practitioner to ensure the expert evidence conforms with the relevant guidelines and rules of
evidence.
16. Expert evidence is introduced so that the court can obtain the benefit of specialised knowledge based on training, study
or experience in relation to a subject with which the judge is not familiar and in respect of which the judge will be assisted
by expert guidance. However, it is also to provide to the court the benefit of an objective and impartial assessment of an issue
relevant to the proceeding.
17. In an attempt to help fulfil these purposes, the Federal Court issued in 1998 a practice direction for expert witnesses entitled “Guidelines for Expert Witnesses in Proceedings in the Federal Court
of Australia”, the 5th version of which was issued on 6 June 2007. It sets out the general duties of expert witnesses to
the Court, namely that witnesses have an overriding duty to assist the Court on matters relevant to the expert’s area of
expertise, that an expert not be an advocate for a party, and that the expert’s paramount duty is to the Court rather than
the party retaining the expert. The guidelines also specify the form and content that expert evidence should take.
18. Those guidelines include the following:
2.2 All assumptions of fact made by the expert should be clearly and fully stated.
2.4 Where several opinions are provided in the report, the expert should summarise them.
2.5 The expert should give the reasons for each opinion.
2.7 There should be included in or attached to the report; (i) a statement of the questions or issues that the expert was
asked to address; (ii) the factual premises upon which the report proceeds; and (iii) the documents and other materials that
the expert has been instructed to consider.
2.9 If an expert’s opinion is not fully researched because the expert considers that insufficient data are available,
or for any other reason, this must be stated with an indication that the opinion is no more than a provisional one. Where an
expert witness who has prepared a report believes that it may be incomplete or inaccurate without some qualification, that qualification
must be stated in the report.
2.10 The expert should make it clear when a particular question or issue falls outside the relevant field of expertise.
19. In addition, the Explanatory Memorandum provides the following guidance:
Ways by which an expert witness giving opinion evidence may avoid criticism of partiality include ensuring that the report, or
other statement of evidence:
(a) is clearly expressed and not argumentative in tone;
(b) is centrally concerned to express an opinion, upon a clearly defined question or questions, based on the
expert’s specialised knowledge;
(c) identifies with precision the factual premises upon which the opinion is based;
(d) explains the process of reasoning by which the expert reached the opinion expressed in the report;
(e) is confined to the area or areas of the expert’s specialised knowledge; and
(f) identifies any pre-existing relationship (such as that of a treating medical practitioner or a firm’s
accountant) between the author of the report, or his or her firm, company etc, and a party to the litigation.
20. Whilst a failure to comply with the guidelines does not render expert evidence inadmissible, they are useful in understanding
the priorities and preferences of the Court in respect of expert evidence.
21. Two common faults arise: sometimes the experts become discursive and offer general theories unrelated to the case, and
sometimes the experts become advocates for the cause of the party calling them. Following the guidelines should help eliminate
such tendencies.
22. Further, the rules of expert evidence, if properly followed, assist in the presentation of expert evidence. They should
not be seen as hurdles, needed to be gotten over, but as the tools of the trade in the presentation of the expert evidence.
23. The starting point to understanding the rules of expert evidence is the fundamental rule of evidence that witnesses
testify to facts, not to opinions. Witnesses present their version of the facts to the judge so that the judge can piece together
the facts of the case and draw the relevant inferences. The job of the witness is not to suggest conclusions that should be drawn
from the facts nor to give an opinion – his or her role is simply to describe the facts as he or she perceives them.
24. The common law proposition is mirrored by s 76 of the Evidence Act 1995 (Cth) (‘Evidence Act’), which provides that:
Evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed.
25. Section 79 of the Evidence Act provides an exception to the exclusionary opinion rule of s 76, as follows:
If a person has specialised knowledge based on the person’s training, study or experience, the opinion rule does not apply
to evidence of an opinion of that person that is wholly or substantially based on that knowledge.
26. Section 80 provides:
Evidence of an opinion is not inadmissible only because it is about:
(a) a fact in issue or an ultimate issue; or
(b) a matter of common knowledge.
27. Section 135 provides:
The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might:
(a) be unfairly prejudicial to a party; or
(b) be misleading or confusing; or
(c) cause or result in unde wast of time.
28. Section 79 is drafted broadly to allow the expert, assuming they meet the specialised knowledge requirement, to testify to any opinion wholly
or substantially based on that knowledge. But, it should be borne in mind that all evidence is subject to s 56 which provides that only evidence which is relevant to the proceeding may be admitted as evidence, thus imposing a threshold test
of relevance on all expert evidence.
29. This is an important matter to recall. Relevant evidence is evidence that, if it were accepted, could rationally affect
(directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding: Evidence Act s 55(1).
30. Evidence sought to be tendered is either relevant or it is not. Whether evidence is relevant is not a matter for the
exercise of discretion. As the majority of the High Court said in Smith v R [2001] HCA 50; (2001) 206 CLR 650 at 653-654:
… although questions of relevance may raise nice questions of judgment, no discretion falls to be exercised. Evidence
is relevant or it is not. If the evidence is not relevant no further question arises about its admissibility. Irrelevant evidence
may not be received. Only if the evidence is relevant do questions about its admissibility arise. These propositions are fundamental
to the law of evidence and well settled.
31. It may be difficult to determine whether expert evidence is in fact relevant depending upon the time during a trial
at which it is sought to be tendered. It may be necessary to conditionally admit an expert report, and leave debate for later
as to its admissibility, in whole or in part. However, to be considered by the court in its deliberations, the expert evidence
must be relevant.
32. In addition to stressing that the expert economic evidence must be relevant, on a number of occasions the courts have
sought to give guidance as to the way such evidence should be presented.
33. In ACCC v Liquorland (Aust) Pty Ltd, Justice Allsop commented on the need for expert evidence to clearly distinguish facts, assumption, opinion and reasoning. His
Honour stated:
There is a plain requirement, either out of fairness in terms of how evidence is deployed or as a requirement of admissibility,
for there to be clarity in the presentation of the expert witness' views. It must be plain, to avoid unnecessary cost, confusion
and prejudice, to identify what are assumptions and what are not, that is, what is assumed as fact and what facts the expert
can give primary evidence of. In many cases, an expert, who is both expert and familiar with the discipline involved, can say
from personal knowledge what are some of the underlying facts.
Then there is the clear identification of principle within the discipline. […]
Then there is a question of the reasoning process. That can be difficult to distinguish from the assumption and the opinion, but
it is important that the taxonomy that I am identifying is understood as including reasoning towards a conclusion.
…It may only be a matter of form, but there is an important question of presentation and understanding involved in the distinction
between saying, after a body of assumptions, "Accordingly, in my opinion", something, and saying, "If the material revealed by
what has gone in the assumptions is correct, that conforms with conclusions that can be drawn from basic or complex economic
theory in the following way."
That then identifies, with some precision, what is happening in terms of this evidence; that is, that the economist may, through
his or her skill and background and expertise, be able to identify critical aspects of the underlying material as important to
economic theory and consumer behavior and economic behavior, illustrating or illuminating the application of simple, or perhaps
complex, economic theory. From that, conclusions can be drawn, through a reasoning process, which may be very short, as to what
this economist thinks is the appropriate way to order, prioritise, synthesise and explain that underlying material.
34. This approach has been seen in a number of cases. In the High Court case of HG v R, Gleeson CJ emphasised the importance of the form and presentation of expert evidence to its admissibility, saying:
By directing attention to whether an opinion is wholly or substantially based on specialised knowledge based on training, study
or experience, the section requires that the opinion is presented in a form which makes it possible to answer that question.
35. In Ocean Marine Mutual Insurance Assn (Europe) OV v Jetopay Pty Ltd, the Full Court of the Federal Court observed (at [23]) that the:
… further requirement [in s 79] that an opinion be based on specialised knowledge would normally be satisfied by the person who expresses the opinion demonstrating the reasoning process
by which the opinion was reached. Thus, a report in which an opinion is recorded should expose the reasoning of its author in
a way that would demonstrate that the opinion is based on particular specialised knowledge. Similarly, opinion evidence given
orally should be shown, by exposure of the reasoning process, to be based on relevant specialised knowledge.
36. The reasoning of the Court in both HG v R and Ocean Marine Mutual v Jetopay informed Justice Sackville’s decision in Seven Network Ltd v News Ltd (No 14)[9] to reject the economic valuation report of an expert consultant economist sought to be relied on by the applicant, the Seven Network.
Justice Sackville considered the report and the methodology adopted by the expert before turning to the admissibility of the
report. His Honour questioned the basis on which the expert formed his opinion and concluded that the expert had not complied
with the requirements of s 79 of the Evidence Act to provide the reasoning for his opinion. His Honour also held that the expert did not comply with the requirements of s 79 because he failed to show clearly that his opinion was based on any specialised knowledge that he had of the Australian pay television
industry.
37. In Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) IPR 261, the Full Court of the Federal Court reminded us that:
A court should not act upon opinions, unless the prerequisites of s 79 are satisfied. It must be established, on the balance of probabilities, that the witness who gives an opinion has specialised
knowledge, that the specialised knowledge is based on the witness’ training, study or experience and that the opinion is
wholly or substantially based on that specialised knowledge. Accordingly, there must be evidence explaining both how the opinion
stated is said to rest on the specialised knowledge of the witness and how the specialised knowledge is based, wholly or substantially,
on the witness’ training, study or experience.
The evidence in chief of a witness giving opinion evidence must explain how the field of specialised knowledge possessed by the
witness, by reason of training, study or experience, and on which the opinion is wholly or substantially based, applies to the
facts established or assumed, so as to produce the opinion about which evidence is to be given. If those matters are not made
explicit in chief, it would normally not be possible for the court to make a judgment as to whether the prerequisites of s 79 have been satisfied and whether the evidence is in fact admissible.
Further, unless a witness states in his or her evidence in chief the grounds and reasoning that have led to the opinion, the opinion
is valueless. Before the court can assess the value of an opinion, it must know the facts on which it is based. If the opinion
is based on irrelevant facts or facts that are clearly not going to be proved, the opinion is likely to be valueless. It should
not be for a cross-examiner to endeavor to elicit the facts or assumptions upon which an opinion is expressed, and it would be
unfair to leave such matters to the cross-examiner. Except in a straightforward, uncomplicated case, where the facts are admitted
or otherwise readily identified, opinion evidence would normally be rejected under s 135 if the facts or assumptions upon which the opinion is based are not expressly stated.
[pars 106-108]
38. With economic evidence this may be difficult to do, as much of what is put by the economist is argumentative. This
point was neatly identified by Justice Allsop in Liquorland:
The recognition of the place of expert economic assistance in the manner described by Professor Brunt means that often the point
of the expert opinion is to give a form or construct to the facts. It may appear to be an argument put by the witness. So it
is. The discourse is not connected with the ascertainment of an identifiable truth in which task the Court is to be helped by
the views of the expert in a specialised field. It is not, for example, the process of ascertaining the nature of a chemical
reaction or the existence of conditions suitable for combustion. The view or argument as to the proper way to analyse facts
in the world from the perspective of a social science is essentially argumentative. That does not mean intellectual rigour, honesty
and a willingness to engage in discourse are not required. But it does mean that it may be an empty or meaningless statement
to say that an expert should be criticised in this field for “putting an argument” as opposed to “giving an opinion”.
In this respect, regard should be had to the comments of French J in Sampi v State of Western Australia [2005] FCA 777 at [792]- [793] where his Honour said in dealing with the anthropological evidence in native title cases:
Aspects of the reports offered what might properly be called argumentative or taxonomical conclusions or inferences relevant to
the claimed determination of native title. To call them such is not necessarily to denigrate them. The judgment of the Court
in determining the application is in part evaluative.
Economic experts typically offer opinions about questions such as market definition relevant to the application of particular
provisions of the Trade Practices Act 1974 (Cth). Such opinion is by way of characterisation of primary evidence and is essentially argumentative in character albeit the
characterisation is informed by relevant expertise. An anthropologist, as in the present case, may offer an opinion on whether
a particular group of people constitute a distinct or discrete society of persons. The nature of the taxonomical exercise is
conceptually similar to that undertaken by the economist.
There is potentially some tension between the recognition that expert testimony may have the character of submission and the Practice
Direction relating to expert witnesses which contemplates acceptance by the expert of a duty to the court in providing opinion
evidence and which rejects the proposition that the expert is simply a ‘hired gun’ for the party who calls him or her.
That tension and associated difficulty in the way of accepting expert testimony as evidence can arise where the opinion offered
becomes advocacy for a particular outcome.
39. In addition to the matters raised above, the presentation of expert evidence can be assisted greatly by proper case
management. Undoubtedly justice is the paramount consideration in dealing with expert evidence. The courts must ensure that
the parties are given a reasonable opportunity to adduce and test expert opinion evidence.
40. In Smith & Anor v Gannawarra Shire Council & Anor, Winneke P stated:
In this day and age when the courts are under pressure to deal with cases before them in an expeditious fashion and where, accordingly,
case management has become a significant aspect of the curial processes, the administration of justice still requires that the
courts ensure, so far as practicable, that justice be administered even handedly so that each party to a dispute is in a position,
within the bounds of reason, to present his or her case to the court in its best light and in an orderly fashion. As Dawson,
Gaudron and McHugh JJ pointed out in State of Queensland v. J.L. Holdings Pty Ltd, in matters like this “justice is the paramount consideration.”
41. A case management technique known as the “hot tub method” (or “concurrent evidence” or “expert
panels”) has been endorsed on a number of occasions. In my view, this technique combines both good case management principles
and the interests of justice.
42. It is a system that invites a series of exchanges between expert and expert and expert and lawyer, is focussed and structured
if properly controlled by the judge, narrows the issues in dispute, allows the judge to assess the expert more readily, whilst
allowing each party the opportunity to put and test expert evidence.
43. In 1998, the Federal Court Rules were amended to accommodate the Court’s use of “hot tubs”[10]. Order 34A, rule 3(2) now provides that:
The Court or a Judge may direct:
(a) that the expert witnesses confer; or
(b) that the expert witnesses produce for use by the Court a document identifying:
(i) the matters and issues about which their opinions are in agreement; and
(ii) the matters and issues about which their opinions differ; or
(c) that:
(i) the expert witnesses give evidence at trial after all or certain factual evidence relevant to
the question has been led; and
(ii) each party intending to call 1 or more expert witnesses close that party’s case in relation
to the question, subject only to adducing the evidence of the expert witnesses later in the trial; or
(d) that, after all or certain factual evidence has been led, each expert witness file and serve an affidavit or statement
indicating:
(i) whether the expert witness adheres to any opinion earlier given; or
(ii) whether, in the light of factual evidence led at trial, the expert witness wishes to modify any
opinion earlier given; or
(e) that:
(i) each expert witness be sworn one immediately after another; and
(ii) when giving evidence, an expert witness occupy a position in the courtroom (not necessarily in
the witness box) that is appropriate to the giving of evidence; or
(f) that each expert witness give an oral exposition of his or her opinion, or opinions, on the question; or
(g) that each expert witness give his or her opinion about the opinion, or opinions, given by another expert witness; or
(h) that the expert witnesses be cross‑examined in a certain manner or sequence; or
(i) that cross‑examination, or re‑examination, of the expert witnesses be conducted:
(i) by completing the cross‑examination or re‑examination of an expert witness before
starting the cross‑examination or re‑examination of another; or
(ii) by putting to each expert witness, in turn, each question relevant to one subject or issue at
a time, until the cross‑examination or re‑examination of all the witnesses is completed.
44. The “hot tub” approach was used successfully by Justice Heerey in Australian Competition and Consumer Commission v Boral Ltd with his Honour commenting at [110] in his reasons on the “very sensible cooperation between the parties and their accounting experts” leading to certain uncontentious findings of
fact. Justice Heerey remains an advocate for the use of the “hot tub” in the appropriate case. I used the “hot
tub” in the BHP case, and found it a useful way to deal with the economic evidence that was sought to be adduced in that proceeding. Justice Lockhart,
one of the earlier advocates of hot tubbing believed that it defined “more precisely the true issues of fact, law and expertise”.
45. Whilst the process has its detractors, in my view the technique is consistent with good case management and with the
attainment of justice. I should stress that the use of the hot tub process is not mandated – the judge may in his or her
discretion use the technique if it is appropriate for the particular matter being determined. Further, if the hot tub process
is being employed, the process itself can be quite flexible. Much will depend upon the judge, the issues being discussed, the
individual characteristics of the experts themselves, and the experience of the lawyers involved. To one Senior Counsel, clearly
antagonistic to his own participation in the “hot tub”, I suggested that that part of the trial could be left to
his younger, more progressive junior counsel, who seemed to be enthused with the idea of jumping into a “hot tub”.
I assumed junior counsel’s concept of hot tubbing was the same as mine. As it turned out, Senior Counsel rose to the
occasion and became an enthusiastic participant.
46. Just like with the question of discovery, issues concerning expert economic evidence and expert evidence generally have
been debated for decades, including unwarranted cost, delay and inconvenience. In my view, if court guidelines and the evidentiary
rules are adhered to, and good case management principles applied as the individual case requires, then most of the mischiefs
frequently associated with expert evidence can be overcome. As a newcomer to the Federal Court bench, I still adhere to an approach
to life which sees the half-filled glass as half full, not half empty. I am convinced that in future litigation expert economic
evidence, properly used and presented, can be of great benefit and assistance to a judge in contributing to the reasoning process
he or she must necessarily undertake to reach a decision according to law.
I wish to acknowledge the very valuable assistance given to me in preparing this paper by Ms Gaby Wolkenberg, Research Assistant
with the Federal Court of Australia.
Dated: 16 October 2007