Disclosure: Party penalised for opponent’s wasted costs of inspecting documents

The English courts’ continued interest in managing the disclosure process in litigation was reflected in Lord Justice Jackson’s final report and the recent judgment by Senior Master Whitaker in Goodale and Others, which included the publication of the draft e-disclosure questionnaire. A decision of the TCC has further highlighted that, as part of the management of the process, the courts will be prepared to make adverse costs orders in appropriate cases.

The parties had settled the substantive dispute and the main consideration for the court was the determination of costs. The court reduced the successful party’s costs recovery by £20,000 to reflect the wasted costs incurred in the inspection of documents due to the inclusion of irrelevant and duplicated documents which were disclosed in no logical order.

The judge was critical of the following:

• It is essential for the parties to discuss the scope and extent of disclosure; it was regrettable that this did not happen in this case
• If issues arise between the parties during inspection of documents these should be resolved by the court (rather than via lengthy correspondence between the parties).
• There were unsatisfactory aspects of the disclosure in terms of irrelevant and duplicated documents and the way in which they were organised.
• The disclosure of whole files which contained duplicate and unnecessary documents led to unnecessary costs on inspection. The fact that the trial bundle contained 70 bundles, compared to the successful party’s disclosure of 800 bundles, indicated that irrelevant documents had been included in the disclosure given

Whilst the successful party obtained an overall costs order in its favour, it suffered a reduction in those costs because of the way it had conducted the disclosure process. Given the current judicial interest in disclosure, parties should be aware of the risk of adverse cost consequences if they fail to fulfil their duties under the procedural rules.

Further reading: Vector Investments v J D Williams [2009] EWHC 3601 (TCC)