UT (Tax & Chancery) UT-2023-000064 - [2024] UKUT 00394 (TCC)

I accept, as Mr Smith submitted, that there is no procedural bar to this application. Rule 15 (1) (e) of the Rules gives the Tribunal the power to direct the manner in which any evidence is to be provided, which may include a direction for it to be given orally or by witness statement.

However, in over 20 years of financial services cases being heard in this Tribunal and its predecessor, there has been no case in which evidence in chief has been given other than by witness statement. It is also now the case that evidence in chief is rarely given orally in civil litigation, although the Civil Procedure Rules do, like the Upper Tribunal’s Rules, make provision for evidence in chief to be given orally if the Court so directs. In particular, the Civil Procedure Rules envisage that evidence in chief may be given orally in order to amplify evidence that has already been given.

This is therefore a unique application, as Mr Smith accepted.Mr Smith says, however, this is a unique case in that the Tribunal is not concerned with financial misconduct, but the core issue of Mr Staley’s state of mind on 6 October 2019 when he approved a draft of the Letter. Mr Smith submits that on these facts, Mr Staley needs to be able to tell the Tribunal in his own words what was his state of mind when he told Mr Hoyt that he approved the Letter.

The application only related to part of Mr Staley’s evidence in chief, in particular that part of his evidence which related purely to Mr Staley’s state of mind and his belief as to the purpose and status of the letter which he approved. Although the application covered other matters which related to the conventional relationship between a banker and his client, Mr Smith did not press that issue, and made no submissions on that point.

Mr Smith submits that Mr Staley’s credibility is an important aspect of the factual history in issue in these proceedings and resolution of those proceedings one way or the other is dependent on his credibility. If Mr Staley can persuade by his evidence that at the time when he approved the draft of the Letter, he was not aware of any risk that the Authority might be misled by the terms of the Letter, then the Authority’s case falls away. Mr Smith submits that is a matter upon which oral evidence can assist the Tribunal. The alternative is simply to put him in the witness box and ask him to confirm simply the truth and accuracy of his witness statement. That does not give him the opportunity at all of telling the Tribunal in his own words, uninterrupted and unhurried, what his state of mind was at the material time. This would also give the Tribunal the advantage of setting Mr Staley’s credibility in the light of his demeanour in the witness box. Mr Smith submits that it is a question of fairness; if a party to proceedings wishes to give evidence orally on a specific aspect of the case, upon which the determination of the issue terms, then serious consideration should be given to permitting that course.

Mr Smith submits that there will be no significant disruption to the efficient management of the case or prejudice to the opposing party. He agreed that the questions to be put to Mr Staley would be disclosed in advance to the Authority so there would be no question of ambush. It was anticipated that the examination in chief orally would take no more than 2 hours. There would be no question of Mr Staley seeking to say anything which expanded upon the evidence in his witness statement or which contradicted it.

Mr Smith submits that cross-examination alone does not give Mr Staley sufficient opportunity to explain to the Tribunal his thinking at the time he approved the draft of the Letter. He says what is going to happen, inevitably, is that the Authority is going to present Mr Staley with what it believes to be questions which he cannot answer, which will place him in a difficult position. He submits that the general rule in cases where integrity and credibility is very much an issue and to be judged by a Tribunal, the general rule is that the person who is under investigation should be given the opportunity of explaining their position.

I am not persuaded by these submissions for the following reasons.

This is not a unique case, although it is a unique application. The Tribunal has in many cases had to consider the credibility of an applicant who is accused of lacking integrity either through acting dishonestly or recklessly. The Tribunal is well used to assessing the subject’s state of mind when considering particular documents and their implications. The most recent example was the case of Seiler and others, referred to above, where the Tribunal had to assess the state of knowledge of the subjects as to the many risks of financial crime that were alleged to be apparent to them through their dealings with a situation over an extended period. That case also reflected modern judicial thinking that it is important for the Tribunal to have regard to the contemporary documents and the overall probabilities and consider the witnesses’ oral evidence in that context.

As was said at [62] of Seiler and others, the contemporaneous documents are usually more reliable than witness evidence. There are many documents in this case which, for example, relate to the question of the closeness of the relationship between Mr Staley and Mr Epstein. As the Tribunal said in Seiler and others, quoting from Simetra Global Assets Ltd and another v Ikon and others [2019] EWCA Civ 1413 at [48] and [49], contemporary documents are generally regarded as far more reliable than the oral evidence of witnesses, still less their demeanour while giving evidence.

When it comes to oral evidence, in my view, the process of cross-examination can and does test to the full the evidence given in a witness statement without any suggestion of unfairness. The Tribunal is alert to the need to allow the subject of cross-examination to give full explanations as to their state of mind in answering the relevant questions.

Accordingly, as Ms Mulcahy submitted, the reasons why it is said by Mr Smith that oral evidence in chief is necessary are all met by the process of cross-examination. The purpose of cross-examination is to test the accuracy of the evidence put forward, which in this case is clearly explained Mr Staley’s witness statement, and to test credibility. I am not persuaded that any evidence given orally covering the same ground as the evidence in the witness statement without amplification will assist the Tribunal in any material respect.

As Ms Mulcahy also submitted, there needs to be a proper justification for the highly unusual course of permitting oral evidence in chief. I can think of circumstances where oral evidence may be necessary in the interests of fairness. That may be so, for example, where the applicant is in person and does not have the necessary skills to prepare a proper witness statement. This case is far removed from that situation; Mr Staley has held senior positions in the financial services industry and is well represented. His witness statement reflects that situation.

Accordingly, the Evidence in Chief Application is dismissed.

In her skeleton argument Ms Mulcahy helpfully explained the background which led to the Authority filing the ASOC on 2 August 2024 as follows.