Appendix 42: expert witness report and notes for guidance of advocate
The Valuation Office Agency's (VOA) technical manual used to assess Capital Gains and other taxes.
Typically at a very early stage following referral to the Tribunal, the Registrar will direct that both parties file and serve their expert valuer’s report within (usually) 2 months. The report includes facts relating to comparable transactions on which the valuer intends to rely, any plans, documents, photographs or other documentation relevant to the report. These exhibits that accompany the written report are considered in Appendix 41.
Normal EDRM guidance should be followed so that all documentation is held electronically and once there is no longer a need for hardcopy papers these should be destroyed.
2. The expert witness report
The expert’s report will provide for the advocate in advance of the hearing a statement of what the witness intends to say. It should contain the whole of the substance of the intended evidence in a logical sequence. The draft report must not be prepared until consideration has been given to the schedule of comparable properties and other exhibits (see Appendix 41).
The report will normally be typed in double spacing on size A4 paper, (or as otherwise indicated by the advocate) and a margin left for the legal adviser to make notes. The paragraphs should be numbered and suitable marginal headings should be given to facilitate reference. Where the text of an exhibit is quoted in the report it must be suitably indicated e.g. by indentation and typed in single spacing.
The report must be headed by the Tribunal’s reference number, details of the parties, the address or short description of the property and the subject of the reference.
The Lands Chamber Rules state, and the LT Scotland will expect, that expert evidence is to be given in a written report unless the Tribunal directs otherwise. A written report of an expert must:
a. contain a statement that the expert understands their overriding duty to the Tribunal and has complied with it,
b. contain the words “I believe that the facts stated in this report are true and that the opinions expressed are correct”,
c. comply with the requirements of any practice direction as regards its form and contents, and
d. be signed by the expert.
The form and content of the expert’s report is subject to UTLC Practice direction 8.2, (which should be followed for any LT Scotland case, unless instructed otherwise):
An expert’s report should be addressed to the Tribunal and not to the party from whom the expert has received instructions. It must:
a. give details of the expert’s qualifications;
b. give details of any literature or other material on which the expert has relied in making the report;
c. say who carried out any inspection or investigations which the expert has used for the report and whether or not the investigations have been carried out under the expert’s supervision;
d. give the qualifications of the person who carried out any such inspection or investigations; and
e. where there is a range of opinion on the matters dealt with in the report—
i. summarise the range of opinion, and
ii. give reasons for his or her own opinion;
f. contain a summary of the conclusions reached;
g. contain a statement setting out the substance of all material instructions (whether written or oral). The statement should summarise the facts and instructions given to the expert which are material to the opinions expressed in the report or upon which those opinions are based.
The expert should comply with the RICS Practice Statement and Guidance note ‘Surveyors acting as expert witnesses (3rd Edition)’ as supplemented by the 2009 addendum and the 2011 2nd addendum (or any new versions) available from the RICS website.
3. Content of an expert witnesses’ report
The following is an outline of the material to be ideally incorporated, (but not necessarily in the same order) as appropriate to the particular case:
Appointment and Qualifications - The qualification of the witness. Here the witness should state not only professional qualifications and position, but details of practical experience in matters which are relevant to the dispute, including professional experience in a particular locality.
Introduction – a brief overview of facts, negotiations and set out the substance of all material instructions received by the expert from HMRC (HMRC’s formal letter of instruction to act as expert witness should be included as an exhibit).
History of the Case - The background event(s) and that giving rise to the tax assessment and determining the valuation date.
Purpose of Valuation - The purpose of valuation i.e. the particular task involved.
Basis of Valuation - The appropriate statutory definition of market value.
Interest to be valued - Details of the taxpayer’s interest, e.g.:
a) Freehold - with vacant possession or subject to tenancies fully described.
b) Leasehold - with full particulars of term, rent, covenants and restrictions and whether with vacant possession or subject to tenancies fully described.
Inspections - A statement regarding inspections, with dates. It is desirable for witnesses to be able to state that they have viewed all properties (at least externally) recently as well as closer to the valuation date.
The Property - Full statement of the situation, description, construction, accommodation, condition and area of the property, access and public services, plans, maps, photographs, line drawings etc should be prepared, (see Appendix 41), and the reference numbers typed in margin. This information may best be provided in two separate sections – Situation and Description.
Encumbrances - Full details of all incidents or encumbrances to which the property is subject e.g. easements, restrictions, covenants, conditions, fixed charges or other burdens eg road charges. Where the restrictions are statutory the provisions which apply to the restrictions. If the witness knows of no encumbrances it should be so stated.
Planning History - Planning provisions affecting the property at the valuation date - copies of relevant documents. If planning matters are in dispute and evidence thereon is to be given by another expert witness, the valuer should state the conclusions and assumptions he has made in the light of that evidence.
Evidence of Value - Reference to and analysis of comparables with all relevant comments, explanation of conclusions shown from each one etc.
Valuation - Full explanation of valuation as already exchanged, with reasons for particular values per square metre or yields adopted etc, leading to a valuation conclusion.
Comments on the Taxpayer’s Valuation - Detailed comments and criticism of taxpayer’s valuation, including the relevance or otherwise of comparables submitted by the taxpayer.
Summary - Summary of case in support of the valuation contended for.
Declarations – Statements to comply with the latest edition of the Royal Institution of Chartered Surveyors Practice Statement “Surveyors acting as expert witnesses” should ensure compliance with the Tribunal Rules and, in England & Wales, Civil Procedure Rules. This comprises several statements including those of truth and duty to tribunal.
Signature – The final report should be signed and dated.
4. Notes for guidance of advocate
The purpose of “Notes for Guidance of Advocate” is to enable the Solicitor representing HMRC or advocate to have a complete understanding of the evidence proposed to be given by the VOA caseworker and to assist in the preparation by the advocate of the reply to the case expected to be made by the taxpayer. The notes should include all relevant background information, including negotiations in the case, which are not readily apparent from the expert’s report and other exhibits. Matters which the VOA believes but cannot prove in evidence should be included.
Where necessary the notes should highlight those matters which are favourable to the case for HMRC but it is important that nothing which may be prejudicial should be omitted. The case law touching upon the dispute should be mentioned and if the VOA is aware or expects that the case for the claimant will make reference to a particular decision, this should be stated.
The VOA should give an indication of replies to questions which it is expected will be asked by the other side in cross-examination. The VOA should also indicate the points which may need to be covered by the advocate in cross-examination of the witness for the taxpayer e.g., where the VOA expects that the evidence for the taxpayer will conflict with that which the VOA intends to give.
It is essential that these notes be supplied prior to conference with the advocate and the VOA should include a list of the points which they may wish to discuss at a conference.