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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
1. Introduction
The legal relationships between arbitrating parties and witnesses-whether witnesses of fact or expert witnesses-have hardly ever been the subject of case law or legal commentaries. As far as litigation is concerned, in civil law countries only the liability of court-appointed experts, and in common law countries only the liability of party-appointed expert witnesses, have been dealt with. This essay seeks to fill the gaps and to propose both substantive rules and conflict of law rules that can be applied widely in cross-border situations.
In civil law jurisdictions we are not accustomed to viewing the legal relationships between witnesses and experts appearing in court, on the one hand, and litigating or arbitrating parties, on the other hand, as contractual relationships. Although the parties, or one of them, ultimately have to bear the cost of calling upon such persons, the activity they perform falls within a public law framework. True, this does not exclude liability towards the litigating parties. Such liability, however, is not of a contractual nature.
In contrast, in common law jurisdictions witnesses of fact and expert witnesses are normally presented to the court by the parties; hence, they do not claim any fees or expenses from the court. Since they are to a very large extent protected by the privilege of immunity from liability for damages that is found in case law and legal commentaries, the point is rarely made that their legal relationship with the party presenting them is a contractual one. Yet, at least in the case of expert witnesses, whenever the courts indicate that the legal nature of their possible liability could result in a claim for damages, it is taken as read that contractual liability is intended. [Page775:]
The same applies to arbitration, even in civil law jurisdictions, since the arbitrating activities of the parties and other participants in arbitral proceedings do not fall within any public law framework. As the German Federal Court has decided, even an expert selected and appointed by an arbitral tribunal has the parties as his contract partners, since the arbitrators are vested with the authority to enter into the agreement with the expert on the parties' behalf. 1Indeed, it follows from basic legal logic that a person who has undertaken a binding commitment to appear and actually does appear as a witness of any kind in dispute resolution proceedings is linked to one or all of the parties by a contractual relationship. Even in a civil law system this must necessarily be so, at least whenever the person concerned is not under any legal duty to give testimony. This applies not only to witnesses of all kinds appearing in arbitrations, but also to witnesses and experts brought before courts that do not have jurisdiction over them.
In a recent study, 2I made this point in relation to German law and developed the inferences that must be drawn, in German law, from this basic legal assumption. The purpose of the present essay is to consider what legal rules govern such relationships in dispute resolution proceedings with an international element, which will be the case whenever the witness or expert has his habitual residence in a country other than that where the court or tribunal has its seat.
The focus will be above all on arbitration-for two reasons. First, it is for his activity in international arbitration that the addressee of this liber amicorum is known and admired the world over. Secondly, the contractual nature of the legal relationship of witnesses and experts to other participants in the proceedings is much more obvious in arbitration than in litigation. In particular, it is not intertwined with any public law relationship. Sometimes, however, the rules governing arbitration can only be developed by referring to the corresponding principles governing litigation, while at other times, conversely, the solution found for arbitration may be transferred to international litigation. Hence, arbitration and litigation should be discussed together.
The subject of our inquiry will be twofold. Normally, the price to be paid for the non-pecuniary performance of a contract partner is not a major problem in contract law: the parties are free to agree on the price, the identity of the debtor and the method of payment. On the other hand, whether and how to pay witnesses and experts seems to be a much more delicate matter. As will be[Page776:]
seen, however, certain uniform rules may nonetheless be assumed and proposed (section 2). In contrast, almost no uniformity emerges from existing legal materials on the liability of experts and witnesses. Here, therefore, appropriate conflict rules must be found (section 3).
2. Generalizable substantive rules on the payment of experts and witnesses
2.1. Freedom to agree on payments to experts acting in arbitration
It is self-evident that in arbitration3a party-appointed expert may be paid by the party that has engaged the expert, in accordance with the agreement they have reached. It also goes without saying that no fee may be stipulated for dishonest statements, whether in the expert's report or at a hearing or otherwise. Nor may any commitments be made to pay fees only for specific statements in favour of the appointing party and/or for not modifying previous statements during an oral (cross-)examination. It is hardly conceivable that domestic laws could have adopted different solutions in this respect.
Normally, a tribunal-appointed expert has both parties (or, in multi-party arbitrations, all the parties) as his contract partners. This rule also applies where one of the arbitrating parties has objected to the tribunal appointing an expert. The implied authority, granted by the arbitration agreement to the arbitrators, to enter into agreements needed for the organization of the arbitration must, on account of its very purpose, be treated as irrevocable. This view holds true even when only one of the parties has paid the entire advance on costs into the account of the chairman of the arbitral tribunal or the administering organization. True, in such a case it is rarely necessary in practice to clarify which party owes the expert's fees, since the expert is paid out of the administrated funds. If the expert is not paid in advance, however, the appropriate solution is to hold all the parties liable for the expert's fees, including the party objecting to the expert's appointment. 4[Page777:]
The liability must be joint and several. When preparing the expert's appointment, it must have been clear to all negotiators that the expert cannot be expected to collect his fees from the party who will be ordered to bear the costs of the arbitration, or even to collect his fees pro rata from the parties. In the case of a contractual commitment by more than one person to make a divisible performance, German law (§ 427 of the Bürgerliches Gesetzbuch (BGB)) contains a general presumption in favour of joint and several liability. The Swiss law of obligations (Obligationenrecht/Code des Obligations/Codice delle Obbligazioni (OR/CO/CO) is in general less favourable to the creditor of more than one contractual debtor; the joint and severable character of the debt must be inferred in each particular case from the circumstances. 5Swiss law also contains a provision corresponding to § 427 BGB6for the special contract of Mandat or Auftrag. 7The Swiss solution has been adopted by the Dutch Burgerlijk Wetboek (BWB) too. 8
2.2. Payments to witnesses in arbitration
In theory, a witness of fact in arbitration may be treated in the same manner as a witness in civil law jurisdictions: his expenses and even modest fees may be paid out of any advance payments which the parties have made to cover the costs of the arbitration. In practice, however, such an approach to the payment of witnesses does not exist. The IBA Rules on the Taking of Evidence do not even contemplate the hypothesis that a witness gives his statement directly to the tribunal. In practice, a witness is 'presented' to the tribunal by the party who bears the burden of proof or who wants to submit counter-evidence. No one is under a duty to testify as a witness in arbitration. The possibility of having a reluctant witness examined in court instead9is hardly ever of practical use. 10Hence, the party bearing the burden of proof will have the job of [Page778:]
persuading a person with relevant knowledge to testify. What payments, if any, may be stipulated in such a context? A distinction must be made between indemnification for expenses and genuine fees.
It is a matter of course that the witness and the party presenting the evidence may agree that the witness should be indemnified for expenses, provided that the amount stipulated is justifiable. The upper limit is certainly not determined by the amount of indemnification to which a comparable witness in court is entitled. Since the party relying on the witness testimony cannot be expected to run the risk of an ill-humoured witness, the acceptable level of indemnification promised to the witness must be viewed with a degree of generosity. Superior class hotels and business or first class flights may be agreed upon. It is hard to see that in this respect domestic laws could view the issues differently. Even absent any agreement on indemnification, such a claim exists, provided the witness was engaged on the basis of a legal relationship, rather than merely on the basis of an amicable arrangement that does not give rise to any contractual duties. For German law, this follows from § 670 BGB, 11which applies directly only to contracts for services where the service rendered is free of charge, 12but which applies by legally-ordered analogy (§ 675 BGB) to all contracts for service that are intended to deal with the affairs of the contract partners (Geschäftsbesorgungsverträge). Swiss law even has an explicit provision (Art. 402 OR/CO). 13
The issue of fees to be offered to a witness or requested by him and promised and/or paid to him is much more delicate. The very idea is certainly shocking to many jurists, since it gives rise to the suspicion that the content of the testimony is being 'bought'. A much more basic analysis is necessary and must be made step by step. [Page779:]
For the purpose of developing the arguments step by step, we first have to assume that the party and the witness have only agreed on the subject of the testimony in general terms, and have not discussed the content of the statements to be made in any way: for example, a lawyer may have been engaged to testify on the course of negotiations and on details of what the participants in such negotiations may have said on some occasion.
Nobody has ever found any reason why such a person should not be paid adequately. A lawyer may have advised his client or even represented him in difficult negotiations on a complex matter on the basis of an hourly fee. If the client subsequently asks him to testify as a witness in arbitration on the course of the negotiations in which he was involved, why should he not be entitled to make his testimony dependent on the same hourly rate of fees being paid to him, including normal fees for travelling time?
This special proposition regarding lawyers can be generalized to all situations in which the giving of evidence demands considerable working time for preparation and subsequent examination and/or implies a real professional risk (e.g. for a person somehow economically connected to the 'other side'). In such situations, reasonable fees and/or compensation for the risk incurred may be agreed.
Normally, however, the parties and 'their' witnesses prepare for the taking of evidence jointly. In common law (judicial) proceedings, this may go as far as 'coaching' a witness. One American court has even stated that 'an attorney who does not question, rehearse and prepare his witness before trial is not properly prepared for trial'. 14
In my essay mentioned in footnote 2, I developed the proposition that there is no legal obstacle under German law either which would prevent lawyers from preparing a witness, including rehearsing the prospective taking of evidence, as long as no efforts are made to induce the witness to give wrong or misleading evidence. 15I have found virtually no indications to the contrary in the current[Page780:]
ethical rules of the Bar of any civil law country. 16If they exist, they certainly do not relate to arbitration, 17nor to witnesses from whom testimonies are to be presented to 'foreign' courts. 18
The general conclusion must be that an arbitrating party and a witness from whom that party intends to present evidence are free to agree on a reasonable fee for the work to be done. Since the issue has not been raised in case law or commentaries in any jurisdiction, the proposition defended here is based on general contemporary approaches to contract law and civil procedure rather than on the principles and particularities of any domestic law. Hence, the proposition made is capable of generalization not only for common law jurisdictions but for civil law countries as well.
2.3. Limitations on the freedom to stipulate payments
However, freedom of contract always has its limits. Furthermore, an agreement on payments to be made to prospective witnesses is not always lawful, regardless of its content. All developed legal systems have a general rule invalidating agreements that disregard good faith or public policy, or both. 19The approaches of common law systems and civil-law jurisdictions are different. Yet, when it comes to the issue under consideration, the solutions adopted seem to be very similar. 20The impact of public policy in the context of pecuniary commitments by an arbitrating party to 'its' witness is twofold: public policy limits the content of the witness's commitment (2.3.1) and limits the amount of the fees that can be agreed (2.3.2).
Nobody would dispute the fact that an agreement would contravene public policy and the lawyer concerned would be breaching ethical standards if the prospective witness were to undertake to make specific statements and a fortiori[Page781:]
to testify only in a sense favourable to 'his' party. The problem, however, is that an agreement with a witness is never drafted in such terms. Instead, skilled lawyers promise a person money for 'telling the truth'. Taken literally, there would be no problem with this, since 'telling the truth' is the duty of every witness. Nevertheless, the official commentary on the IBA's Model Rules of Professional Conduct21takes it as read that there is an obligation 'imposed by law' not to enter into such an agreement. The point, however, is extremely delicate. On the one hand, the formulation 'to tell the truth' may well hide the fact that the arbitrating (litigating) party has given the witness a very clear and definite idea of what 'the truth' should be. On the other hand, the prospective witness may have wrongly represented to 'his' party that he has a certain recollection that is plainly in the latter's favour, but subsequently, when examined, he deviates from it.
Therefore, it is not appropriate to stick closely to the wording of the agreement ('to tell the truth'), provided the fees agreed upon are reasonable in light of the time the witness needs to give to being examined and adequately prepared.
It is even more necessary to prohibit agreements for unreasonably high fees or unreasonably high lump-sum payments, as they are invariably an indication that the content of the testimony is being 'bought'.
This must be so, even when the person on whose evidence the arbitrating party wishes to rely has a monopoly over the necessary information. In an American case, 22an insurance company was distrustful of the circumstances in which an alleged jewellery robbery took place. It did not have any other evidence to offer than that of a man who was close to the questionable circumstances in which the jewellery disappeared. This person, however, was only willing to testify in return for a payment of US$ 120,000. The issue was whether or not, and if so by what means, the lawyer involved in the deal could be sanctioned. The court's answer was that the lawyer infringed ethical standards. There can be no doubt that the agreement between the witness and the insurance company was also invalid. [Page782:]
The question of what can be agreed upon with a witness in order to persuade him to give evidence is clearly a delicate one. Legal systems can be found with strict and well-implemented rules prohibiting any attempt to influence a witness, including a witness to be presented in arbitration. However, the present analysis is not confined to a particular domestic legal system, and there is no real reason why agreements cannot be made with witnesses to be presented in arbitration regarding reasonable fees and indemnification. It is therefore proposed that such agreements be generally accepted. Furthermore, the basic assumptions of this analysis are not limited to witnesses to be presented to arbitral tribunals.
2.4. Payments to witnesses to be presented in foreign courts
The basic assumption of this analysis is that-even within the framework of an arbitration conducted under a civil law system-a prospective witness might be induced by one of the arbitrating parties to make written statements or to testify in the arbitration in return for payment. One cannot however take a different approach with respect to witnesses who have to be available for litigation in 'foreign' courts. To be precise, the hypothesis is as follows: a litigating party is interested in the recollection of a person who is not subject to the jurisdiction of the court in which the lawsuit is pending. In practice, this would be a person not residing within the territorial boundaries of the court's jurisdiction. American courts have occasionally ruled that European litigants must bring employees into the court's district for the purposes of deposition. 23German courts occasionally draw the attention of litigants to the fact that they were free to persuade witnesses residing abroad to come to the court and testify (Zeugen gestellen). 24
Here too, my proposition is that in an internationally generalizable context 'persuading' includes reaching an agreement on indemnification and reasonable fees. Prohibitory deontological rules of advocacy were drafted with purely domestic matters in mind and do not contemplate the special difficulties of witnesses who are needed but are not subject to the court's jurisdiction. [Page783:]
3. Liability of witnesses and experts for damages and the conflict of laws
The thesis developed regarding agreed payments to experts and witnesses is a proposition of principle. All legal systems, however, have many rules of contract law that provide solutions for the wide variety of difficulties which can arise: time bar, place of payment, time of payment, set-off, assignment, interest, notice of termination. Conflict rules have to be applied when dealing with all of these issues, because there is little prospect of finding uniform provisions. However, the area where conflict rules are particularly necessary is liability for damages. Different jurisdictions have developed very different approaches to the question of whether participants in legal proceedings are liable for damages. Furthermore, there is a wide variety of ways of assessing damages. I will begin by summarizing these approaches, not only for the purpose of demonstrating the need to develop conflict rules, but also to sketch out the current lie of the land (section 3.1). Based on this, conflict rules must then be identified (section 3.2).
3.1. Comparative law summary of the liability of witnesses and experts for damages
The classical approach of common law systems is the notion of absolute privilege for all participants in judicial or quasi-judicial proceedings, including lawyers (section 3.1.1.1). 25 There are however signs that this absolute rule is being eroded (section 3.1.1.2). Nevertheless, it must be emphasized that the contractual nature of such liability has never been of particular interest. The highest courts of England and the USA have both confirmed and emphasized the basic common law rule of absolute immunity of witnesses-whether witnesses of fact or experts. 26Although neither case dealt with the special aspect of a party-appointed expert witness, the ratio decidendi of both decisions clearly covers witnesses presented by parties. The US Supreme Court27has cited a nineteenth century case involving damages suits against witnesses, in which it was said that 'the claims of the individual must yield to the dictates of public policy which requires that the paths which lead to the ascertainment of truth should be left as free and unobstructed as possible'. [Page784:]
It follows from the reasons given by courts when contemplating an exception to the common law privilege of immunity from liability that even court-appointed experts are protected by this privilege.
There is one exception-party-appointed expert witnesses, who are denied the privilege by some courts. 28This position was taken in relation to an expert witness appointed by an arbitrating party in a case of particular note in the present context. 29A quotation taken from another case is particularly illustrative:
Applying the privilege in these circumstances does not encourage witnesses to testify truthfully; indeed, by shielding a negligent expert witness from liability, it has the opposite effect. Applying the privilege where the underlying suit never reached the trial stage would also mean that the party hiring the expert witness would have to bear the penalty for the expert witness's negligence. The court also found it significant that the case never reached trial. The policy that litigants bear the burden at trial of exposing witness bias and falsity of evidence can only apply to the trial testimony of adverse witnesses, not to pre-trial disputes between a party and its own expert witness. 30
In contrast, other courts have refused to withhold the privilege from (partyappointed) expert witnesses. 31One policy statement32is particularly worth mentioning because it goes directly against the usual philosophy of American advocacy:
The principle purpose of expert testimony [is] to assist the fact finder in understanding complicated matters, rather than to assist one party in winning a case. [Page785:]
The High Court of England and Wales has also refused to grant such an exemption. 33
Some courts restrict the immunity to statements made in deposition or during examination, thus leaving the expert witness liable for damages for all preparatory work, including in particular any advice he may have given to the party employing him. 34One court35made an exception to the immunity rule where the alleged failure of the expert related to the 'formulation' rather than to the substance.
The approach of civil law systems is fundamentally different because the concept of privilege does not exist in these jurisdictions. Nevertheless, civil law systems have also been faced with the question of restricting the liability of experts and witnesses as a matter of policy.
The traditional German approach was that a court-appointed expert was practically exempt from liability. If only intangible assets of the aggrieved party are affected (in practice pecuniary interests), as a matter of principle no tortious liability for negligence exists. In the rare case of physical damage due to a court-appointed expert's failure, however, the Constitutional Court did not accept the Federal Court's36theory of a kind of absolute immunity from liability and insisted on liability for gross negligence. 37
In relation to arbitration, the Federal Court has ruled that an implied provision was deemed to have been inserted in the contract between the expert appointed by the tribunal and the parties, exempting the expert from liability to the same extent as a court-appointed expert. For a party-appointed expert, however, the Federal Court has refused to acknowledge any kind of limited liability. 38[Page786:]
Three years ago, a new § 839a was inserted into the BGB establishing the general liability of court-appointed experts and restricting it to cases of gross negligence. This rule will certainly be applied by analogy to experts appointed by an arbitral tribunal. I have also suggested that it be applied to party-appointed experts as well. 39However, in a case involving collateral damage to an accused person in criminal proceedings, caused by the preparatory work of the expert, the Federal Court did not see any reason to limit his liability. 40
French law apparently draws some distinction. On the one hand, it has been decided that the content of the expert's written opinion is exempt from liability. 41On the other hand, errors au plan technique were held to be a good basis for liability. In some instances a distinction between faute grave and faute légère has been made. 42In one eye-catching decision of the French Court of Cassation, which is rather similar to the American case referred to above in footnote 34, 43the expert was held liable for a typing mistake in his report which the judges had not discovered when reaching their judgment and which had caused the insurance company to pay an unjustified sum to the victim of a traffic accident.
It is unclear whether these rules apply to experts acting in arbitration and whether or not a distinction is to be made in this respect between tribunal-appointed and party-appointed experts. It must, however, be borne in mind that French courts have always emphasized that the liability of a court-appointed expert is tortious in nature rather than contractual. 44
When it comes to the liability of witnesses of fact, it has only been possible to trace a few German cases in which tortious liability is assumed according to a special German basis for tortious liability. 45There is no case law at all in relation to witnesses engaged to testify in arbitration or in foreign courts. [Page787:]
3.2. Conflict of laws
The question of what law governs the liability of court-appointed experts, expert witnesses or witnesses of fact is not dealt with anywhere in case law or legal commentaries. In the only American case cited that deals with the relationship between a litigant and an expert witness residing in another State, it was taken as read that the privilege rules of the forum applied. 46The assumption, however, is far from self-evident. It is not the approach taken in Article 4 of the Rome Convention of 19 June 1980 on the Law Applicable to Contractual Obligations (Rome Convention) or Article 117 of the Swiss Private International Law Act (PILA), where the rules are almost identical. The present conflict of laws analysis will be limited to these two instruments.
The basic rule, i.e. that the parties are free to agree on the law applicable to their relationship, has little practical impact on the issue under consideration. This is so because it is hardly conceivable that an actual or prospective litigator would make an agreement with a witness or an expert as to the law that should govern their relationship. Against this background, the analysis must be carried out in three steps:
1.Under what circumstances, if at all, does Article 4(5) of the Rome Convention apply to the kind of agreements under consideration here?
2.Is it conceivable that elements of the law of the forum can apply cumulatively to the law of the place of residence of the expert or witness or vice-versa?
3.For both steps the underlying assumption must be made that the witness or expert is needed for court proceedings. In the third and last step, we have to clarify what, if anything, corresponds in arbitration to the 'nationality' of court proceedings.
Absent any agreement to the contrary, 'the contract shall be governed by the law of the country with which it is most closely connected'. 47Given this background, it is presumed by operation of law48 'that the contract is most[Page788:]
closely connected with the country where the party who is to effect the performance which is characteristic of the contract has, at the time of conclusion of the contract, his habitual residence or . . . its central administration'.
Pursuant to the Rome Convention, this presumption is not applicable 'if it appears from the circumstances as a whole that the contract is more closely connected with another country'. 49Swiss private international law lacks a comparable express provision. However, the criteria developed in legal commentaries for eliminating the presumption are very similar to what has been proposed for interpreting the 'not-applicable rule' of the Rome Convention. 50
So, what reasons can justify applying the law of the forum rather than the law of the place where the witness or expert is resident?
In the absence of any relevant case law, the general proposition made in legal commentaries is that there must be a connection with another legal system that is clearly much stronger than the one that is based on the place of residence of the party making the characteristic performance. 51Therefore, a foreign place of performance is not sufficient. However, if particular activities have to be performed abroad, such as construction, maintenance or inspection, the law of the place of performance should apply. 52Within this purview, it is interesting to consider the proposition that the law of the forum should govern the relationship between a big law firm based in the forum and small law firms abroad employed for class actions taking place in the forum. 53This makes sense, but only on the equally reasonable assumption that the law of the forum is applicable whenever a client residing in the forum, or in a jurisdiction very much akin to it, 54employs a foreign lawyer to defend him. It would make little sense to quantify the work [Page789:]
proportionally and point out that the work of a lawyer in connection with making submissions to a foreign court is primarily done at home. The mere fact that the 'service' to be performed is to a large extent disconnected from the interests of the litigant and is performed in the interests of justice is sufficient reason for the exception to apply.
Therefore, it is also reasonable to hold that the presumption in Article 5(2) of the Rome Convention does not apply to the agreement between a litigant residing in the jurisdiction of the forum or in a jurisdiction very akin to it and an expert or witness who has agreed to give his testimony to the foreign court.
If, however, the litigant seeks the testimony of a witness or the opinion and subsequent examination of an expert who is resident in the same country as him, the mere fact that the performance of the witness or expert is directed to a foreign court cannot constitute a sufficiently strong connection to eliminate the presumption of Article 5(2). In such a context, the witness or expert cannot reasonably be expected to enter into a contractual relationship governed by a foreign law.
In either case, we have to consider whether liability should exceed the limit provided in the 'other' law.
If the law of the place where the expert/witness is resident governs the relationship, under that law he may be fully liable to both parties or to the litigant appointing him. Can the law of the forum nevertheless limit his liability?
The answer depends on whether or not Article 7 of the Rome Convention applies. It provides:
1. When applying under this Convention the law of a country, effect may be given to the mandatory rules of the law of another country with which the situation has a close connection, if and in so far as, under the law of the latter country, those rules must be applied whatever the law applicable to the contract. In considering whether to give effect to these mandatory rules, regard shall be had to their nature and purpose and to the consequences of their application or non-application. [Page790:]
2. Nothing in this Convention shall restrict the application of the rules of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the contract. 55
As far as I know, the question of whether or not immunity from damages or any comparable limitation in other legal jurisdictions can be waived has not been considered anywhere in the world. Yet the reasons given for defending such a limitation on liability indicate that for legislators (including the makers of case law) public policy considerations were to the fore. For the common law world, it may suffice to repeat the words of the US Supreme Court which literally adopted the words of another court:
The claims of the individual must yield to the dictates of public policy,
which requires that the paths which lead to the ascertainment of truth should
be left as free and unobstructed as possible. 56
For the civil law world, a quotation may be given from the seminal judgment of the German Federal Court:
Würde man bereits die [fahrlässige] Verletzung der Zeugen- oder Sachverständigenpflichten für einen Schadenersatzanspruch als ausreichend erachten, so könnte dies . . . zu einer goßen Zahl von Prozessen führen, mit denen versucht würde, den gerichtlichen Spruch auf andere Weise unwirksam zu machen. Daß das Gesetz dies gewollt hat, kann nicht unterstellt werden. 57
This policy reason is also valid for the new § 839a BGB, which establishes liability for gross negligence while still restricting it accordingly.
Whilst the policy reasons given by the two courts are quite different, neither approach is compatible with any agreement of the parties providing for stricter liability. Hence, the requirements of Article 7 of the Rome Convention are satisfied.
Conversely, however, there is no basis for limiting the liability of the expert or witness pursuant to the law of his place of residence. Such a limitation is aimed at protecting the integrity of the domestic courts and not at providing greater assistance for foreign than for domestic proceedings. [Page791:]
I cannot conclude this analysis undertaken and written in honour of Robert Briner without making the corresponding point for arbitration. Which law governs the relationship between arbitrating parties and witnesses and experts?
The arbitration in question may be clearly a domestic one: no foreign element may be involved other than the fact that the expert or witness resides abroad. In such a case the rules proposed for court proceedings should apply.
If, however, the arbitration is an international one, the law of the tribunal's seat carries less weight than the national law would in court proceedings. The arbitration is subject only to a few mandatory rules of the law in force at the place where it is held. However, the impact of the seat is decisive for the loi d'arbitrage, 58which will normally be determined by the tribunal's seat. In the rare case of an internationally 'floating' arbitration things may be viewed differently. The law of the tribunal's seat will prevail whenever the arbitrators, rather than either of the litigating parties, have appointed an expert (by virtue of their being invested with authority to act for the parties).
4. Summary
1. The relationship between arbitrating parties and witnesses - whether witnesses of fact or expert witnesses - is contractual in nature. The same holds true regarding witnesses or experts engaged by a party litigating in a court that does not have jurisdiction over them.
2. In terms of payments to the expert or witness, there are some rules that are capable of international generalization.
2.1 & 2.2. The litigating or arbitrating party may agree with the witness on a reasonable payment, not only for expenses but also for the work to be done.
2.3. Agreements on payments are invalid, however, if the amount agreed does not reflect the work done and the risk incurred. [Page792:]
3. Where it is not possible to identify any rules capable of international generalization, conflict of law principles developed for contractual relationships must be applied.
3.1. This is the case in particular with regard to any liability for damages. The solutions adopted in this respect by national legislations are very diverse.
3.2. The presumption in Article 5(2) of the Rome Convention is not always applicable:
3.2.1. It applies only where neither the party nor 'his' witness or expert are resident within the jurisdiction to which the court belongs or within which the arbitral tribunal has its seat, as the case may be.
3.2.2. In other circumstances, it is normal for the law of the forum to have a significantly closer connection with the relationship.
3.2.3. The law of the tribunal's seat may provide an additional limitation on liability should the contractual relationship be governed primarily by the law of the place of residence of the expert or witness. [Page793:]
1 NJW 1965, 298.
2 P. Schlosser, 'Der Privatvertrag mit Zeugen und Forumsexperten' RIW 2005, 81.
3 e.g. pursuant to Art. 5 of the IBA Rules on the Taking of Evidence: '1. A Party may rely on a Party-Appointed Expert as a means of evidence on specific issues.'
4 As in Swiss law; see A. Weiss & K. Bürgi Locatelli, 'Der vom Schiedsgericht bestellte Experte - Ein Überblick aus der Sicht eines internationalen Schiedsrichters mit Sitz in der Schweiz, (2004) 22 ASA Bulletin 479 at 496.
5 A.K. Schnyder in Basler Kommentar, Art. 143 OR/CO/CO, No. 6.
6 Art. 403(1) OR/CO: 'Haben mehrere Personen gemeinsam einen Auftrag gegeben, so haften sie dem Beauftragten solidarisch.'/ 'Lorsque le mandataire a été constitué par plusieurs personnes conjointement, elles sont tenues solidairement envers lui.'
7 Art. 394(1) OR/CO: 'Durch die Annahme eines Auftrages verpflichtet sich der Beauftragte, die ihm übertragenen Geschäfte oder Dienste vertragsgemäss zu besorgen.'/ 'Le mandat est un contrat par lequel le mandataire s'oblige, dans les termes de la convention, à gérer l'affaire dont il s'est chargé ou à rendre les services qu'il a promis.'
8 Art. 407(1) providing for joint and several liability; Art. 400 defining mandat.
9 See e.g. Art. 27, UNCITRAL Model Law on International Commercial Arbitration; Art. 184, Swiss Loi fédérale sur le droit international privé (LDIP)/Bundesgesetz über das Internationale Privatrecht (IPRG) of 18 December 1987 (PILA); § 1050, German Zivilprozessordnung (ZPO); Art. 1041(2), Dutch Wetboek van Burgerlijke Rechtsvordering. Regarding the silence of French law in this respect, see E. Gaillard & J. Savage, eds., Fouchard, Gaillard, Goldmann On International Commercial Arbitration (Kluwer Law International, 1999) at 728, para. 1338.
10 Only section 43 of the English Arbitration Act 1996 makes witnesses compellable to the same extent in an arbitration as in litigation.
11 'Macht der Beauftragte zum Zwecke der Ausführung des Auftrags Aufwendungen, die er den Umständen nach für erforderlich halten darf, so ist der Auftraggeber zum Ersatze verpflichtet.'
12 Like all civil law jurisdictions, German law has not adopted any doctrine of consideration.
13 '1. Der Auftraggeber ist schuldig, dem Beauftragten die Auslagen und Verwendungen . . . zu ersetzen und ihn von den eingegangenen Verbindlichkeiten zu befreien. 2. Er haftet dem Beauftragtem für den aus dem Auftrage erwachsenen Schaden . . .'/'1. Le mandant doit rembourser au mandataire . . . les avances et frais . . . et le libérer des obligations par lui contractées. 2. Il doit aussi l'indemniser du dommage causé par l'exécution du mandat . . .'
14 USA v. Torres, 809 F.2d 429 at 439-40 (7th Cir. 1987).
15 As per S. Timmerbeil, Witness Coaching und Adversary System (Tübingen: Mohr Siebeck, 2004) at 127f. [in German].
16 The only example I have found is Dr Briner's home jurisdiction: Us et Coutume du barreau de Genève Art. 13: 'L'avocat doit s'interdire de discuter avec un témoin de sa déposition future et de l'influencer de quelque manière que ce soit.'
17 M. Bühler & C. Drogan, 'Witness Testimony Pursuant to the 1999 IBA Rules of Evidence in International Commercial Arbitration: Novel or Tested Standards?' (2000) 17:1 J. Int. Arb. 3 at 20, even recommend witness preparation in arbitration.
18 See 2.4 below.
19 § 138, German BGB; Art. 20, Swiss OR/CO/CO; Art. 248(2), Dutch BWB; Art. 1133, French Code civil; Art. 1343 Italian Codice civile.
20 For details see A. von Mehren in International Encyclopaedia of Comparative Law, VII, c. 9-72 at 93.
21 Fourth edition of 1999.
22 Golden Door Jewelry Creations Inc. v. Lloyds Underwriters Non-Marine Ass'n, 865 F.Supp. 1516 (S.D. Fla. 1994).
23 e.g. in re Anschütz, 754 F.2d 611 (5th Cir. 1985); Coca Cola Foods v. Empresa Comercial Iinternacional de Frutas S.A., 1997 W.L. 370121.
24 e.g. Bundesgerichtshof, NJW 1980, 1848.
25 This study, however, does not deal with the liability of the litigants' lawyers.
26 M. (a minor) v. Newham London Borough Counci, [1995] 2 A.C. 633 at 661, [1995] 3 W.L.R. 152,[1995] 3 All E.R. 353; Briscoe et al. v. Lahue et al 460 U.S. 325 (1983).
27 LLMD of Michigan Inc. v. Jackson-Cross Co., 559 Pa. 297, 740 A.2d 186 (Pa. 26 Oct. 1999) LEXIS 3206.
28 Mattco Forge, Inc. et al. v. Arthur Young & Co., 5 Cal. App. 4th 392, 6 Cal. Rptr. 2d 789, Cal. App. LEXIS 480; Ferguson v. Lieff, Cabraser, Heimann & Bernstein, LLP, 95 Cal. App. 4th 154, 115 Cal. Rptr. 2d 342, 2002 Cal. App. LEXIS 180; Boyes-Bogie v. Horvitz et al. 14 Mass. L. Rep. 208, Mass. Super. LEXIS 582 (2001); LLMD of Michigan Inc. v. Jackson-Cross Co., supra note 26.
29 Murphy v. A.A. Mathews, A Division of CRS Group Engineers, Inc. 841 S.W.2d 671 at 672 (Mo. 1992) (en banc).
30 Ferguson v. Lieff, Cabraser, Heimann & Bernstein, LLP, supra note 27.
31 Aizenhawar (Aizen) J. Marrogi v. Ray Howard et al., E.D. La. 15 June 2000, 2000 U.S. District LEXIS 8525; LLMD of Michigan Inc. v. Jackson-Cross Co., supra note 27; Rogers v. Janzen 711 F.Supp. 306 at 309 (E.D. La. 1989), aff'd 891 F. 2d 95; Panitz v. Behrend 632 A.2d 562 (Pa. Super 1993); Bruce v. Byrne-Stevens & Associates Engineers, Inc., 113 Wn. 2d 123, 76 P.2d 666 at 667 (Wash. 1989).
32 In LLMD of Michigan Inc. v. Jackson-Cross Co., supra note 26, quoting from Panitz v. Behrend, supra note 30.
33 Palmer v. Durnford Ford (a firm), [1992] Q.B. 483 at 488, 2 All E.R. 122 at 127.
34 England: Palmer v. Durnford Ford, supra note 32; USA: Murphy v. A.A. Mathews, A Division of CRS Group Engineers, Inc., supra note 28; Mattco Forge, Inc. et al. v. Arthur Young & Co., supra note 27.
35 LLMD of Michigan Inc. v. Jackson-Cross Co., supra note 26. At trial, the defence found an error in the calculations on which the expert's test was based, but the expert could not correct the error because he had not done the calculations himself. His opinion was therefore struck out and the party presenting him was compelled to accept an unfavourable settlement.
36 Bundesgerichtshof, Official Reports, 64, 62, 64; NJW 1974, 312.
37 Bundesverfassungsgericht, Official Reports, 49, 304; NJW 1979, 305.
38 NJW 1967, 719.
39 See supra note 2.
40 Bundesgerichtshof, Official Reports, 59, 310 ; NJW 1973, 554, 556.
41 Cour d'appel de Versailles, 29 November 1988, Gaz. Pal. 1989.2.422.
42 For details see R. Genin-Méric, Jurisclasseur procédure civile, fasc. 660, No. 134ff.
43 Redand v. Assurances Générale de France, Bull. civ. 1986.II.No. 146.
44 R. Genin-Méric, supra note 41.
45 Celle Oberlandesgericht, FamRZ 1992, 556; Frankfurt Oberlandesgericht, MDR 1978, 315.Regarding § 156, Strafgesetzbuch (SGB): Bundesgerichtshof, MDR 1959, 118. Regarding § 163 SGB: Bundesgerichtshof, Official Reports, 42, 313, 318; Bundesgerichtshof, Official Reports, 62, 54, 57 (obiter).
46 Aizenhawar (Aizen) J. Marrogi v. Ray Howard et al, supra note 30. In the other US cases referred to in this essay, it is not mentioned in the report of the factual background whether the defendant's expert witness resided within the jurisdiction.
47 Art. 4(1) Rome Convention; Art. 117(1) PILA.
48 Art. 4(2) Rome Convention; Art. 117 PILA.
49 Art. 4(5) Rome Convention.
50 See, with minimal variants, Züricher Kommentar zum IPRG, Art. 117, No. 39; Basler Kommentar zum schweizerischen Privatrecht, Art. 117 No. 14f.
51 See Staudinger/Magnus, Kommentar zum Bürgerlichen Gesetzbuch mit Einführungsgesetz und Nebengesetzen, EGBGB/IPR, 13th ed., 2002, Art. 28 EGBGB No. 127, with further references; D. Martiny in Münchner Kommentar zum Bürgerlichen Gesetzbuch X, 3d ed. (1998), Art. 28, No. 92; according to Cheshire & North's Private International Law, 13th ed. (1999) at 573, English courts tend not to apply the presumption whenever it would be inappropriate in the circumstances of a given case.
52 Staudinger/Magnus, supra note 51, No. 132; S. Rammeloo, 'Die Auslegung von Art. 4 Abs. 2 und Abs. 5 EVÜ: Eine niederländische Perspektive' (1994) IPRax 243 at 247f; similar: Hoge Raad, Nederlandse Juresprudentie 1992, No. 750.
53 B. Heß, 'Inländische Rechtsbesorgung gegen Erfolgshonorar?', NJW 1999, 2485.
54 e.g. in another US state; in Austria rather than Germany.
55 The United Kingdom, Germany, Ireland, Portugal and Luxemburg entered reservations.
56 Briscoe et al. v. Lahue et al, supra note 25.
57 NJW 1965, 298. [English translation: Should the [negligent] disregard of the duties of witnesses andexperts be sufficient ground for founding a claim in damages, such a rule would . . . lead to a high number of subsequent litigations attempting to invalidate the judgment by other means. It cannot be supposed that the law has this objective.]
58 Very clearly emphasized, in contrast to the many confusing statements in other texts, in J.-F. Poudret & S. Besson, Droit comparé de l'arbitrage international (Schulthess, 2002), §§ 113, 114.