A costly business

The pressing need for tighter case management by the judiciary has again been thrown into focus this week in a wasted costs dispute between West African Gas Pipeline Company (WAPCo) and Willbros Global Holdings.

The $274m dispute is scheduled to be heard at the High Court over six to eight weeks in June. Yet the complexity of the international case has caused a major headache for the claimant and its lawyers at Herbert Smith. Serious issues with the company’s e-disclosure exercise has resulted in a £135,000 costs order against WAPCo, although the defendant’s lawyers at Pinsent Masons would argue that is nowhere near enough.

Willbros had argued that it was owed approximately £1.8m by its opponent after it consistently and seriously wasted time and money by failing to take control of the e-disclosure process. This was a sum that had been built up since 6 October, when a case management conference was held to discuss the extent of disclosure.

With tens of thousands of documents to be trawled through, the order, which covered six main points, was concise. Herbert Smith was ordered to provide disclosure in two tranches on 24 October and 4 November. In addition, it had to review redacted documents already handed over and provide, by 4 November, un-redacted documents insofar as the redactions were not correctly applied.

The firm appointed external litigation support provider Hobs Legal Docs to help with the trawl. It became clear that the firm would miss the 24 October deadline for the first tranche of disclosure. The firm told Pinsents the same day, “there had been a problem with the de-duplication procedures used by Hobs in that they had not properly identified a large number of duplicate documents”, the judgment said.

A further review of the documentation, it added, showed a significant proportion of duplicates had not been removed.

Concerning a missing email from the project director of the dispute project, Mr Nance, Herbert Smith said it had engaged Mindcrest, a litigation support company based in India, to find the document under lawyer supervision.

The firm said the process had involved a rereview of all the documents previously disclosed by WAPCo and that, as a result, about 10 per cent of the documents previously identified as not being disclosable were redesignated as being disclosable.

Pinsents also complained about another failure to disclose documents on WAPCo’s internal Livelink system.

Herbert Smith retorted that it had sent a senior associate to Accra in Ghana to investigate why the required information had not been provided. It turned out that the firm had “mistakenly” not been given the relevant information. Copies of these folders had been taken and de-duplicated and then reviewed by the firm rather than Mindcrest. The firm stated that, because of problems with de-duplication, further de-duplication would be needed before the documents could be disclosed.

In total, Pinsents forwarded seven areas of alleged non-compliance that, it argued, would be worthy of awarding a wasted costs order.

Ruling, Mr Justice Ramsey accepted three points: a failure to de-duplicate the documentation; a failure to gather together or ’harvest’ a consistent and complete set of electronic data for the purpose of electronic disclosure; and, the judge said, a “significant difficulty arose because of a failure properly to review documents which were located in the searches of the electronic data base”.

That the judge allowed the order on three points at a time when the judiciary is meant to be taking more stringent controls of matters raises some questions. Should he set an example by cracking down on erroneous behaviour by any of the parties involved?

As part of his sweeping reforms of the litigation system, Lord Justice Jackson, who has the support of the Lord Chief Justice Lord Judge and the Ministry of Justice, wants the judiciary to be more proactive when it comes to case management.

Speaking in November, Jackson observed that a “phone call or email from the court to the parties enquiring about progress can have a dramatic effect”.

In this particular case it might have had the effect of avoiding the court order application, saving all parties resources and cash.

Equally, if the judiciary had a proven track record of punishing those who flout court orders parties may be more inclined to set realistic deadlines.

There will be judicial training to support “a tougher and more pro-active approach”, Jackson LJ said. This cannot come quickly enough.

If the Government is keen to continue to attract international litigants there must be a level of control to stop these mammoth cases from spiralling out of control. The recent debacle concerning Addleshaw Goddard client Mukhtar Ablyazov, who has apparently fled the country despite a committal order, only serves to underline this (1 March 2011).

The only way the judiciary can do this if it is given the powers with which to do so.