Litigation lawyers will know what a Hearsay Notice is, when one needs to be served and why. However, a recent decision by the Court of Appeal seems to have made it easier for hearsay evidence to be relied upon in court proceedings and this may result in a flood of professional negligence claims against unwary solicitors.

Hearsay is information gathered by one person from another - the first person having no first hand experience of the information. For example, you buy a packet of sweets from a shop for 52p and tell A what you have done. A then relays that information to B. When A passes that information to B it will be considered hearsay evidence as A has no personal knowledge of the fact that you bought the sweets for 52p.

Hearsay evidence can be used in court trials but in order to do so, the party who wishes to rely on it must comply with s2(1) of the Civil Evidence Act 1995, serving a notice on the other side stating an intention to adduce hearsay evidence “for the purpose of enabling [the other party] to deal with matters arising from its being hearsay.” Failure to serve such a notice means that the hearsay evidence cannot be used.

However, the Court of Appeal in Charnock –v- Rowan (2012) EWCA Civ 2 appears to have allowed an alternative method to be used.

The facts of the case are interesting. A car struck a stationary bus which carried 14 passengers. The damage to the bus was slight – it cost less than £500 to repair – but each of the 14 passengers made a personal injury claim, although only 10 accident claims proceeded to trial. The Defendants were highly sceptical. The bus had been stationary and the car had only been travelling at 15mph. They seemed to be suggesting that 10 PI claimants were colluding in insurance fraud. As the trial judge said to the Defendant’s trial Counsel, Paul Higgins, “Either I have got ten liars or frankly, I have got none.” “That,” replied Mr Higgins, “is our position”.

The main argument put forward by the Defendants was to be found in their medical evidence; a series of medical reports prepared by a Mr Shah. Although his reports did not make any suggestions of disbelief in the claimant’s version of events, he did record some of the claimant’s stories as relayed to him and, in some cases, pointed to some discrepancies in the narrative. Technically, this is hearsay evidence and if the Defendants wished to rely on those aspects of Mr Shah’s report, they should have served a hearsay notice. However, they failed to do so.

What they relied upon was the fact that the Claimants had agreed that the report should be in the trial bundle without making any objection to Mr Shah’s comments. CPR PD 32 r 27.2 states that “all documents contained in bundles which have been agreed for use at a hearing shall be admissible at that hearing as evidence of their contents….” The Defendants argued therefore that by reason of this, no hearsay notice was required as the agreement of the bundle was the requisite notice.

The original trial judge, HHJ Gore QC, was not happy with this approach. What the Defendants were alleging was tantamount to insurance fraud and he felt that such claims must be based on “proper and admissible evidence…managed and presented in accordance with the substantive and procedural laws and rules of this jurisdiction.” If a formal hearsay notice had been served, the Claimants would have called Mr Shah to be cross examined but, following the Defendants argument, the Claimants lost this opportunity. His Honour felt that this drove a coach and horses through natural justice and long established statutory duty.

The judge found in favour of the personal injury Claimants saying that whilst there may be inconsistencies in their stories, none were sufficient to cause him alarm and quite frankly, he found it “implausible that so many people went to the trouble and inconvenience of going to hospitals or doctors or clinics, sometimes more than once, if… there was nothing wrong with them.” Interestingly, despite having spent a large proportion of his judgment dealing with the issue of the hearsay evidence, ultimately, it did not affect his finding for the Claimants – he relied purely on the facts as presented to him.

The Defendants appealed the decision, the basis of the appeal being whether or not they could rely on Mr Shah’s hearsay evidence. Ultimately, the Appeal was dismissed as the Court of Appeal felt that the Defendant’s case was “somewhat thin” but what the judgment did do was appear to endorse the Defendant’s argument that, despite it appearing to be a “trial by ambush”, documents that are included in an agreed bundle which contain hearsay evidence will be allowed without the necessity of serving a hearsay notice.

As I have said above, this judgment drives a coach and horses through the long established scheme of dealing with hearsay. To my view, the modern day scheme of litigation is for parties to try and work together without trying to trip each other up; no more “Perry Mason” style litigation of appearing at the last minute of the trial with the crucial piece of evidence or cross-examination. The hearsay notice was valuable in this respect as it could alert the opposing party to issues that they may not have considered as being live and to try to deal with is sensibly without it being “an invitation to almost limitless and costly wrangling both before and at trial” which the Court of Appeal thought their decision in this case was likely to avoid.

Whilst it may have avoided “costly wrangling” in the current case, if a solicitor misses the hearsay evidence in an agreed bundle and ultimately loses a claim as a result, this will only invite another claim, this time for professional negligence.