The Civil Law and Criminal Law (Miscellaneous Provisions) Act 2020 – Admissibility of Business Records in Civil Proceedings
11 September 2020
The recently commenced Civil Law and Criminal Law (Miscellaneous Provisions) Act 2020 (the “Act”) has introduced welcome assistance for financial institutions seeking to prove their debts before the Courts.
While the overriding objective of the Act was to introduce reform to both the Civil and Criminal Courts in response to the difficulties caused by the COVID-19 pandemic, certain provisions of the Act address pre-existing non-Covid related issues which also required reform. One such issue which the Act has addressed is the law of evidence in civil proceedings, in particular, the “Hearsay Rule” concerning the admissibility of business records.
To date, when a document is produced in Court, oral evidence has been required to authenticate the origin and content of that document, otherwise the document would be deemed inadmissible as hearsay evidence (the “Hearsay Rule”).
The inadmissibility of business documents in civil proceedings was discussed in a previous article where the Court of Appeal held in Promontoria (Aran) Limited v Burns  IECA87 that affidavit evidence sworn by a person who was not involved in the original loan transaction, was inadmissible hearsay. In that case the Court of Appeal held that the affidavit evidence did no more than confirm what the Plaintiff had been told by the original lender of what amount was due by the borrower at the time the loan was acquired and the amount that had accrued since then, which amounted to “classic hearsay”.
In its’ judgment, the Court of Appeal called for an exception to the rule against hearsay in respect of business records to be introduced in civil matters. The Law Reform Commission previously recommended such an exception in its 2016 report Consolidation and Reform of Aspects of the Law of Evidence.
Exception to Hearsay Rule
Chapter 3 of the Act, which came into effect on 21 August 2020, has introduced a significant change to the law of evidence in civil proceedings by creating a statutory exception to the Hearsay Rule in relation to the admissibility of business records.
Section 13 of the Act provides that “any record in the form of a document compiled in the course of business shall be presumed to be admissible as evidence of the truth of the facts asserted in that document” (the “Statutory Exception”).
This Statutory Exception creates a presumption that information contained in “business records” are proof of fact without the relevant individual being required to give evidence or be cross-examined. While the presumption may be challenged, the onus of proof is on the challenging party to prove that the evidence contained in the business records is inaccurate or incorrect.
Under section 14 of the Act, in order to benefit from the Statutory Exception, the document must be a “business record” and must have been:
- compiled in the ordinary course of business;
- supplied by a person (whether or not they compiled it and are identifiable) who had, or may reasonably be supposed to have had, personal knowledge of the matters dealt with; and
- in the case of information in non-legible form that has been reproduced in permanent legible form, was reproduced in the course of the normal operation of the reproduction system concerned.
The Statutory Exception does not apply in certain circumstances to include where:
- the information is privileged from disclosure in civil proceedings;
- the information is supplied by a person who would not be compellable to give evidence at the instance of the party wishing to introduce the information into evidence; or
- information compiled for the purpose, or in contemplation, of any criminal investigation, investigation or inquiry carried out under Statute or disciplinary proceedings. Under section 14 (7) of the Act the records of a business that has ceased to exist are admissible.
In order to benefit from the Statutory Exception, the party seeking admittance is obliged to provide the other party with a notice of intention to submit the relevant document into evidence, together with a copy of the document, no later than 21 days before the commencement of the civil trial. Any objections to the admissibility of the document must be served no later than 7 days before the commencement of the trial.
In determining the weight to be given to the information admitted under the Statutory Exception, the Court shall give regard to all the circumstances from which any inference can reasonably be drawn as to its accuracy or otherwise. The Court must also consider whether the admission or exclusion of said records would likely result in unfairness to any other party to the proceedings. Further, the Court can hear evidence as to the credibility of the supplier of information contained in the business records.
While the above criteria must be met, the Court retains an overriding discretion as to the admissibility of evidence under the Statutory Exception. The Court shall not admit a document under the new provisions where 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 assistance to financial institutions in meeting the evidential thresholds required to prove their debts in Court. However, third party funds who have acquired loan books from financial institutions may still face difficulties overcoming the evidential thresholds, unless complete statements of account for each account are obtained when purchasing loan books from financial institutions which can be produced as evidence before the Courts. See previous article: Supreme Court Clarifies the information required before judgment is given in summary claims..