Civil Law and Criminal Law (Miscellaneous Provisions) Act 2020 – Admissibility of Commercial Documents in Civil Proceedings
The recently enacted Civil and Criminal Law (Miscellaneous Provisions) Act 2020 (the “Act”) has introduced welcome assistance for financial institutions seeking to prove their debts in court.
While the overriding objective of the law was to introduce civil and criminal court reform in response to the difficulties caused by the COVID-19 pandemic, certain provisions of the law deal with pre-existing non-Covid related issues that also required a reform. One such issue addressed by the law is the law of evidence in civil proceedings, in particular the “hearsay rule” regarding the admissibility of commercial documents.
To date, when a document is produced in court, oral evidence is required to authenticate the origin and content of that document, failing which the document would be ruled inadmissible as hearsay evidence (the “Rule hearsay”).
The inadmissibility of commercial documents in civil proceedings has been discussed in a previous article where the Court of Appeal ruled in Promontoria (Aran) Limited v Burns  IECA87 that the affidavit evidence given by a person who was not involved in the original loan transaction was inadmissible hearsay. In this case, the Court of Appeal held that the affidavit evidence only confirmed what the plaintiff had told the original lender about the amount owed by the borrower at the time of acquiring the loan and the amount that s had accumulated since. , which amounted to “classic hearsay”.
In its decision, the Court of Appeal requested that an exception to the rule against hearsay in business documents be introduced in civil matters. The Law Reform Commission had previously recommended such an exception in its 2016 report Consolidating and Reforming Aspects of the Law of Evidence.
Exception to the hearsay rule
Chapter 3 of the Act, which came into force on August 21, 2020, introduced a significant change in the law of evidence in civil proceedings by creating a statutory exception to the hearsay rule with respect to admissibility of commercial documents.
Article 13 of the law provides that “any recording in the form of a document established within the framework of cases is presumed to be admissible as proof of the veracity of the facts alleged in this document” (the “Statutory exception”).
This statutory exception creates a presumption that information contained in “business records” is evidence of fact without the person concerned being required to testify or be cross-examined. Although the presumption may be challenged, the burden of proof is on the disputing party to prove that the evidence contained in the business documents is inaccurate or incorrect.
Under section 14 of the Act, to benefit from the statutory exception, the document must be a “commercial document” and must have been:
- compiled in the ordinary course of business;
- provided by a person (whether or not compiled and identifiable) who had, or can reasonably be expected to have had, personal knowledge of the matters discussed; and
- in the case of information in illegible form which has been reproduced in a permanently readable form, has been reproduced within the normal operation of the reproduction system concerned.
The statutory exception does not apply in certain circumstances to include where:
- the information is protected from disclosure in civil proceedings;
- the information is provided by a person who would not be compellable to testify at the request of the party wishing to produce the information in evidence; Where
- information compiled for the purpose of or in anticipation of any criminal investigation, inquiry or investigation under law or disciplinary proceedings. Under Section 14(7) of the Act, records of a business that has ceased to exist are admissible.
In order to benefit from the legal exception, the party requesting admission is required to provide the other party with a notice of intention to submit the relevant document in evidence, together with a copy of the document, no later than 21 days before the start of the civil trial. Any objection to the admissibility of the document must be served no later than 7 days before the start of the trial.
In determining the weight to be given to the information admitted under the statutory exception, the Court must take into account all the circumstances from which an inference can reasonably be drawn as to its accuracy or otherwise. The Court must also determine whether the admission or exclusion of said records would likely result in injustice to any other party to the proceedings. In addition, the Court may hear evidence as to the credibility of the provider of information contained in business documents.
Although the above criteria must be met, the Court retains overriding discretion as to the admissibility of evidence under the statutory exception. The Court will not admit a document under the new provisions when it is of the opinion that its admission would not be in the interests of justice.
The introduction of the statutory exception will be of great help for financial institutions in respecting the thresholds of proof required to prove their debts in court. However, third-party funds that have acquired loan books from financial institutions may still face challenges in overcoming evidentiary thresholds unless full account statements for each account are obtained when purchasing loan books from financial institutions that can be produced as evidence in court. See previous article: The Supreme Court specifies the information required before the judgment is rendered in summary proceedings.