In a recent Supreme Court ruling, the court decided whether a statement of loss prepared by the plaintiff’s auditor could be produced during legal proceedings. The Supreme Court found that it was an expert opinion obtained after the commencement of the legal proceedings and it was therefore not allowed.
The ruling illustrates the importance of expert opinions being obtained prior to commencement of the legal proceedings and shows when it is considered an expert opinion or evidence given by a party.
Unilaterally obtained statements
It appears from section 341a(1) of the Administration of Justice Act that statements on specific matters of a “technical, financial or similar nature” may be produced as evidence in legal proceedings. It is a condition that the statement has been obtained prior to the commencement of the legal proceedings. Statements obtained after the commencement of the legal proceedings may generally not be produced when the opponent objects.
The basis of Danish law is that disputed facts must be clarified by way of an expert opinion procured by the court. A party is therefore not free to use its own expert statements in court but must generally proceed in compliance with the rules on expert opinions.
Unilaterally obtained statements are furthermore not considered objective and therefore have limited evidential value. Finally, the purpose of the rules is to avoid that the parties to an action - as it is the case in several other countries - each obtain their own statements - thereby creating an “expert race”.
Audit opinion concerning statement of loss
The case concerned the question whether a company could produce an aggregate report of its loss during an action for damages which had been prepared by the plaintiff’s auditor PwC after the commencement of the legal proceedings.
The plaintiff had made a substantial claim for damages of approx. DKK 130 million against the defendant and had stated in the writ that the loss had been calculated with the assistance of PwC. The plaintiff stated that a report in this respect was going to be produced during the proceedings. Subsequently, the plaintiff also requested that an expert opinion was initiated for the purpose of obtaining a report from an independent expert concerning the principles applied in relation to the statement of loss. According to the plaintiff, the statement of loss prepared by PwC was to be presented to the expert.
The defendant objected to the production of the statement of loss with reference to the fact that it was an expert statement unilaterally obtained after the commencement of the proceedings.
The district court found that the statement could not be included in the case as it had been prepared after the commencement of the proceedings. The high court attached importance to the fact that the statement of loss had been prepared by the plaintiff’s usual auditor for the purpose of calculating the claim for damages. Based on the content and nature of the statement, it should therefore be comparable to evidence given by a party.
Supreme court ruling
When assessing whether it was to be considered an expert statement or evidence given by a party, the Supreme Court took into account that the statement of loss was not only a presentation of figures but also an independent and self-explanatory statement. It was part of the assessment that the statement had been prepared by PwC for the purpose of the legal proceedings, and that the report referred to the special ethical rules on integrity, objectivity and independence applying to auditors.
According to the Supreme Court, the statement contained the expert knowledge and authority of an audit opinion and it had been obtained after the commencement of the legal proceedings for the purpose of the proceedings and because the plaintiff wished to produce it to the expert in connection with the expert opinion. Permission to produce the statement of loss to the expert before obtaining the expert opinion would also, according to the Supreme Court, involve a risk of undue influence on the expert.
On the basis of the above, the Supreme Court found that the statement of loss could not be included.
Importance of the ruling
The ruling upholds the courts’ clear basis that unilaterally obtained statements obtained after the commencement of the proceedings may generally not be included in the proceedings and is therefore in line with case law within this area.
At the same time, the ruling is an important interpretative aid when defining expert opinions versus evidence given by a party. It is therefore not decisive whether a party states that the statement is “evidence given by a party” with reference to a permanent cooperation with the expert - but, on the contrary, whether the statement appears to be an expert opinion based on its content.
At the same time, the ruling emphasises the importance of a party obtaining relevant expert statements before legal proceedings are commenced.
For more information on the Supreme Court ruling: Højesterets kendelse afsagt fredag den 15. oktober 2021 - Sag BS-50925/2020-HJR (text in Danish)