The recent court case involving Mike Ashley of Sports Direct and his professional advisors should be interesting to brokers for two reasons.
First, because it warns (if warning were needed) of the dangers of holding board meetings in pubs and of mixing corporate governance with biblical quantities of alcohol.
Second, because it highlights the reluctance of the Courts to place reliance upon a witness’s recollection of what was said in meetings in the absence of contemporaneous evidence.
The old adage when exhorting brokers to keep more attendance notes is: “if it’s not written down, it didn’t happen”. Despite this descent into cliché, it remains the case that a lot of claims against insurance brokers hang on the Defendant broker’s ability to prove, in the absence of a file note, the advice that was given at a particular meeting to a particular client. This is usually achieved by the production of a lengthy witness statement which, years later, attempts to fill the gaps in the broker’s file.
The Courts are increasingly sceptical of this approach, as highlighted in the Mike Ashley case where contemporaneous written evidence was notable by its absence. As the judge observed: “It is rare in modern commercial litigation to encounter a claim, particularly a claim for millions of pounds, based on an agreement which is not only said to have been made purely by word of mouth but of which there is no contemporaneous documentary record of any kind”.
In a previous case, the same Judge commented: “The best approach for a Judge to adopt in a trial of a commercial case is to place little if any reliance on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts.” This is because of the “powerful tendency for people to remember past events concerning themselves in a self-enhancing light”.
Those principles apply equally to professional advisors defending claims as they do to those advancing them.
Thus, the advice to maintain detailed attendance notes remains as valid today as it has always been, if not more so.
It is also generally advisable to refrain from vomiting in the fireplace during meetings in order to make space for more alcohol, although it does not appear to have hampered Mr Ashley in his business dealings. That decision is probably one for marketing rather than compliance.
Head of Insurance Litigation
Edwin Coe LLP
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Article originally published here: https://www.edwincoe.com/blogs/main/contemporaneous-evidence-mike-ashley-goes-must-come/?dm_i=2H7C,14882,75S48Z,3EJA4,1