Another indemnity costs order for eDisclosure failures

By coincidence, we have a second UK judgment in a few days which ends with indemnity costs being paid by a party for failing to comply with its disclosure obligations.  Mr Justice Akenhead’s judgment in Phaestos Ltd & Anor v Ho [2012] EWHC 668 (TCC) (16 March 2012) begins with this:

This revised case management hearing was fixed on Wednesday for an hour-and-a-half, starting at 8.30 in the morning. It was listed for an hour-and-a-half and the purpose was, as I made clear on Wednesday, that the Court should finally deal with, and dispose of, issues relating to the scope of electronic disclosure on the part of the claimants, primarily. It is clear that substantive agreement on the defendants’ electronic disclosure had been reached.

…and it ends with this:

It is agreed that the costs of, and occasioned by, the claimants’ application earlier today should be borne by the claimants in any event. The only issue is whether it should be on an indemnity basis. I am wholly satisfied that this is an appropriate case for an indemnity basis. The court has made it clear, on at least two previous occasions, and probably more, that the question of electronic disclosure and any issues arising out of it were to be dealt with at the latest by the end of this particular week, preferably earlier. Earlier orders talked about getting it resolved on or by 5th March 2012 ….The claimants and their solicitors, collectively, have had more than enough time to “get their act together” on this…

In between, we have a complicated story of delay featuring words like “desultory”. It includes practical (or perhaps impractical is the better word) things like a change from one very competent firm of solicitors to another the day before the hearing. The correspondence between the lawyers included passages like this:

“We note your continued failure to engage with the detailed requests for disclosure which we sent to you. If your clients truly intend to adopt a constructive approach, there is no reason for them not to respond to the many points identified in the draft statement….


“We are currently undertaking a detailed review of the proposals. It appears you propose an annual review of approximately 100 mailboxes over a 16-year period with 262 search terms, some of which are very broad, then being applied to any remaining mailboxes within the claimants’ organisations. That exercise will take years to complete, so it is not clear to us that this was the proposal you intent to take, please confirm…. Regardless of the above, our analysis of your suggested list of custodians and key words is ongoing. It is no small task, however, and we will revert to you regarding them as soon as is reasonably practicable “….

…to which, as the judge noted drily, the opposing firm “responded reasonably promptly”.

There is an issue about whether a named individual could properly say (that is, was factually and legally correct in saying) that she had no power to require a company to give her access to documents, and there is mention of  “a number of servers based on different parts of Europe, including Cyprus and Frankfurt”

There are reference to the mechanics of search, with mention of key words, connectors, proximity searches, and to “some form of preliminary filtering”. In another dry aside, the judge said of one explanation that “[I]t is not an unhelpful response”. I liked also the (possibly) unconscious irony behind his “I am not going to go into the detail of that, save to refer to several paragraphs”.

Reading the judgment, and reading between the lines of the judgment, one is left with an overriding impression not of incompetence or (necessarily) any desire to conceal documents, but of a task which outstripped the interest and enthusiasm of those taking part. The judge’s patient weariness is perhaps representative of the reaction of most judges faced by this kind of application.

What’s to do about it? If this sort of thing happens in reasonably big (but not enormous) cases run by well-known and competent firms of solicitors in a court (the Technology and Construction Court) which has a better grip than most on both case management generally and electronic disclosure specifically, what will prevent it happening again? Despite the detail in the judgment, we do not know enough about the difficulties faced by the lawyers to allow us to apportion blame between them, the clients and the court. It is equally difficult, from the outside at least, to purport to suggest retrospectively how this messy outcome could have been avoided.

We don’t need to go that far, really. Anyone looking at this, whether client, court or lawyer, would accept that the outcome is unacceptable. The best use for this judgment is to make every lawyer read it just as they embark on an eDisclosure exercise, as an awful warning.


About Chris Dale

I have been an English solicitor since 1980. I run the e-Disclosure Information Project which collects and comments on information about electronic disclosure / eDiscovery and related subjects in the UK, the US, AsiaPac and elsewhere
This entry was posted in CPR, Discovery, eDisclosure, eDiscovery, Electronic disclosure. Bookmark the permalink.

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