Herbies client hit with wasted costs order over e-disclosure failures

The High Court has ordered Herbert Smith client West African Gas Pipeline Company (WAPCo) to pay a £135,000 wasted costs order after an e-disclosure exercise spiralled out of control.

Mr Justice Ramsey granted the order against WAPCo in an ongoing case that the company is bringing against Willbros Global Holdings, which is being represented by Pinsent Masons.

Pinsents had argued that its client was owed £1.8m by its adversary following a series of alleged disclosure failures.

According to the judgment, 39 Essex Street’s Stuart Catchpole QC, instructed by Pinsents for Willbros, told the court: “The whole process of WAPCo’s disclosure has now been shown to have been wholly inadequate. […] The failure properly to gather together the documents from WAPCo’s e-Rooms, the WAPCo shared drive […] the failure of [LPO provider] Mindcrest properly to review the documents; the failure of [legal document service provider] Hobs to de-duplicate the documents; the failure of WAPCo’s local lawyer in Accra properly to provide disclosable documents; […] the failure to provide a properly searchable database; the failure to make consistent and appropriate redactions and the failure to obtain documents from the relevant custodians.”

Atkin Chambers’ Fiona Parkin QC, who was instructed by Herbert Smith partner James Baily for WAPCo, conceded that there had been failures, but contended that they were in accordance with complex and difficult international litigation and were not enough to warrant a wasted costs order against her clients.

Ramsay J said the failure allegations fell into seven categories. Firstly, the failure of Mindcrest properly to review the documents which the court accepted, stating that “a significant number of documents disclosed […]should have been disclosed at an earlier stage”.

Next, the allegations that WAPCo failed to properly assemble its disclosure; failed to de-duplicate documents and deal with redactions in a satisfactory manner;  failed to gather together and deal with custodians;  failed to provide searchable optical character recognition (OCR) copies; and failed to provide appropriate searchable fields within the database.

Ramsay J said the case for wasted costs could only be forwarded on three points. First, the failure to de-duplicate, the judge said, “inevitably led to wasted time and costs in reviewing a number of copies of the same document”.

Second, WAPCo’s failure to gather together or ’harvest’ a consistent and complete set of electronic data for the purpose of electronic disclosure. Ramsay J commented: “I consider these to be serious mistakes and from the evidence it is apparent that the mistakes resulted from an inadequate initial review and gathering together of a complete set of electronic documentation.”

Thirdly, the court said a “significant difficulty arose because of a failure properly to review documents which were located in the searches of the electronic data base”.

The judgment said: “There are inevitably increased costs when the disclosure process becomes disrupted and it becomes necessary to review documents over a prolonged period. In this case, because disclosure of many documents was only given in October, November and December 2011 there has been an element of increased cost.

“People have had to carry out extra reviews and searches of disclosed documents and have had to return on a number of occasions to deal with disclosure of further documents.”

As a result, the court held that WAPCo should hand over £135,000 in wasted costs to the defendant.

The case is being brought against Willbros after it guaranteed a contract between WAPCo and Willbros West Africa Inc (WWAI).

The contract, signed in December 2004,  agreed that WWAI would be the engineering, procurement and construction contractor for the West African Gas Pipeline that was being built across the continent. WAPCo terminated the contract in February 2008 and used other contractors to finish the project. It claims it is owed $274m by Willbros for the additional costs of completing the pipeline following the termination of the contract.

For the claimant WAPCo: Herbert Smith partner James Baily instructed Atkin Chambers’ Fiona Parkin QC and Omar Eljadi of the same set.

For the defendant Willbros Global Holdings Inc: Pinsent Masons partners Adrian Elliot and Mark Roe instructing 39 Essex Street’s Stuart Catchpole.