False economy and evidence gathering

There is often a false economy in the decision to arrange a low-cost survey where a matter appears to be simple or of low value. Paul Apostolis and the CJC Singapore Office explain what is required to transpose what appears on the ground at the time into a convincing presentation to a judge or arbitrator sitting in a room often years after the event.

The capture of evidence on the core issues surrounding any incident, contemporaneously with its occurrence, is key to the successful pursuit or defence or any claim in respect of that incident. That evidence will inform the level of any settlement or of any award or judgment if the matter has to be arbitrated or litigated. Without it, cases cannot be effectively settled or fought, and substantial investments in costs may be thrown away for failure to take the correct steps at the outset for relatively minimal cost.

The purpose of this article is to put this fairly obvious point into context, in terms of the burdens of proof in litigation, and to highlight one factor which experience shows to be a recurrent cause of failure to meet those burdens. Investigators, such as surveyors, will lack the legal training to appreciate the issues to which any given incident is likely to give rise and in relation to which a burden of proof will lie, and what is required to transpose what appears on the ground at the time into a convincing presentation to a judge or arbitrator sitting in a room often years after the event.

This is not a special plea for use of lawyers in all aspects of an investigation. But delegating the task exclusively to surveyors, even if perceived as a lower-cost option in the short term, is misguided and is demonstrably the reason why a number of cases fail. The reasons for that are not far to seek. Lawyers and surveyors perform distinct functions: the surveyor may be able to determine cause, but he will not have the practical experience of presenting cases to judges and arbitrators in the court or arbitration room in a way which will meet their exacting standards of proof.

Burden and standard of proof

At the heart of any litigation are the facts.

What set of circumstances caused two parties, whether known to each other in a contractual relationship or strangers with a duty of care owed to each other due to their proximity, to come into dispute. Resolution of that dispute relies not on the applicable law or on what actually happened, but rather on how those underlying facts can be proved.

The law has catered for this by creating the burden and standard of proof.

In civil litigation, whether in contract or in tort, the burden of proof of asserting a set of facts or circumstances of a dispute lies on those who make an allegation. The law then requires that litigant to prove those facts sufficiently so that if the circumstances or the facts are disputed, the tribunal has sufficient cogent evidence to tilt the finding of fact sufficiently in favour of that party on the balance of probabilities. A party does not have to prove the facts on which they rely absolutely and nor are they required to satisfy the facts on the criminal standard of beyond reasonable doubt. All that is required is that, if weighed in the balance, the facts as alleged tend to favour the alleging party’s version of events.

What the party who bears the burden of proof must do is adduce sufficient evidence of the facts and surrounding circumstances necessary to tip the balance of justice in their favour.

A failure to satisfy the standard of proof by the party who bears the burden of doing so will cause a claim or defence to fail, irrespective of the actual circumstances or the merits of the law. This was succinctly summarised by UK High Court in 2008 in In Re B, where the Court held as follows:

“If a legal rule requires a fact to be proved (a “fact in issue”), a judge or jury must decide whether or not it happened. There is no room for a finding that it might have happened. The law operates a binary system in which the only values are 0 and 1. The fact either happened or it did not. If the tribunal is left in doubt, the doubt is resolved by a rule that one party or the other carries the burden of proof. If the party who bears the burden of proof fails to discharge it, a value of 0 is returned and the fact is treated as not having happened. If he does discharge it, a value of 1 is returned and the fact is treated as having happened.”

The issue

The purpose of writing this article is to highlight a fairly common practice, mostly in the small to medium range of marine casualties such as collisions at anchor, low-impact groundings, cargo damage claims and incidents giving rise to GA which are disputed on the grounds of alleged unseaworthiness of the vessel, involving potential damages in the US$ 100,000s rather than in the millions range. These claims tend to be categorised as not warranting the expenditure of a meticulous collection and documentation of the facts by witness interview, VDR preservation and document collection, ostensibly on the grounds that the claims do not justify the costs and the matter will likely settle as between the parties. Rather a surveying company was asked to “find out what happened” when sent to survey the damage.

But there is a pitfall in this approach.

After the effluxion of a year or two with time bars approaching and no prospects of collating the evidence in retrospect in a form necessary to satisfy either the burden or standard of proof, we are asked to assist in recovering unpaid GA, resolve a collision liability or seek to defeat an allegation of unseaworthiness or cargo damage.

It is worth bearing in mind that that party on whom no burden of proof rests has an easy task. For a cargo owner, all they require is a clean bill of lading evidencing delivery of their cargo into the hands of a shipowner/carrier in sound condition and a broad and unsubstantiated denial of liability often on spurious grounds. Since the decision in CMA CGM Libra and pending a different conclusion by the Supreme Court to the findings of the Court of First Instance and the Court of Appeal, what can only be described as strict liability has been placed on the shipowner/carrier if the passage plan is found to be incorrect at the commencement of the voyage, thereby reducing the extent to which the negligent navigation defence can be used. 

It seems that a cargo owner in all future groundings/heavy weather damage will simply allege that the passage plan was defective in an unspecified manner, rendering the vessel unseaworthy, potentially to the exclusion of the contractual defences incorporated in the bills of lading. What may simply be an error of navigation now becomes an unseaworthiness incident by mere allegation, and if not bottomed out through investigation at the onset, a perfectly good contractual defence may fail.  

Owners now have a difficult assignment, not because the facts and the law do not favour their case, but because they cannot adduce sufficient evidence in retrospect to prove their case to the satisfaction of a court or tribunal or the opposing party in settlement negotiations.

This lack of evidence collated at source can become a debilitating liability in the future conduct of litigation or efforts to find a commercial solution even to the minute detail of the number of layers of lining paper used in a container to protect a coffee cargo. In Volcafe and ors v Compania Sud Americana De Vapores SA [2018] UKSC 61, the court found:

I would hold that the carrier had the legal burden of proving that he took due care to protect the goods from damage, including due care to protect the cargo from damage arising from inherent characteristics such as its hygroscopic character. I would reinstate the deputy judge's conclusions about the practice of the trade in the lining of unventilated containers for the carriage of bagged coffee and the absence of evidence that the containers were dressed with more than one layer of lining paper. In the absence of evidence about the weight of the paper employed, it must follow that the carrier has failed to prove that the containers were properly dressed.”

The point here is not how much or what weight of lining paper was deployed. It may have been the correct amount. The issue is that this evidence was not collected at the time of survey and, after the event, could not be proven. The actual amount became irrelevant through lack of evidence. How easy and inexpensive would it have been to collect the evidence from the onset on the number of sheets of paper used to line the container? It would have certainly cost less than taking the matter to the Supreme Court.

This is not an isolated incident. We have seen small collisions where the VDR was not downloaded and where follow-up questions were not asked to iron out inconsistencies or offer an explanation when a point was in doubt. A court will not speculate to assess a fact. In Noel Starbuck v Patsystems, the court held:

In the end it seems to me that I am being asked to speculate about things which Patsystems could quite easily have proved by proper evidence, such as an expert report based on actual source code comparisons, and I see no reason why I should speculate. Hence I conclude that Patsystems has not proved that the ACE software reproduces the expression of the intellectual creation of NSA version 3.1, and the counterclaim accordingly fails.”

There is often a false economy in the decision to arrange a low-cost survey where the matter appears to be simple or too low in value. This is best demonstrated in the case of Dawkins v Carnival PLC in 2011 [EWCA] Civ 2137, where a passenger allegedly slipped on water spilled in the conservatory. The issue was how long it was allowed to remain there as an obvious risk before the passenger slipped. No crew were interviewed on this point, and when the matter arrived in the Court of Appeal at what must have been considerable costs when compared to that of a thorough investigation, the court found:

“The absence of evidence from one or more of the many members of staff claimed to be present in the Conservatory at the material time is remarkable. The explanation for the lack of evidence from a member or members of staff was, the Recorder found, that the defendants "could not establish who it was". In my judgment, in the absence of evidence from members of staff claimed to be implementing the system, the judge was not entitled to infer from the existence of a system that the spillage which led to the fall occurred only a few seconds, or a very short time, before the accident.” 

It may well be that the water had been there for a matter of seconds. It may well be that the crew immediately implemented the safety management system to deal with the spillage. But in not accurately recording what they did at the time through proper crew interview and witness statements, Carnival and their liability insurers not only incurred the damages claimed but also their own and the passenger’s costs to the Court of Appeal. Lawyers should be and often are prepared to cut their fees to cater for clients’ expectations on costs for collecting the evidence. If you do not understand the burden of proof and how courts or tribunals assess evidence, you may well struggle to appreciate what evidence needs to be gathered.

We would urge you to consider the consequences of not collecting the evidence to a legal standard when next a matter appears of low-order value and not worth the expenditure of a proper investigation. The eventual outlay could be significantly more than the costs of that investigation.