Moduleco v Carillion

On an application for pre-action disclosure, the respondent normally receives its costs under CPR Part 48.1. The court may depart from that rule where it was clearly unreasonable to oppose the application, or where the manner of opposition was so unreasonable that a different costs order is justified. The court must assess when any initially reasonable opposition became unreasonable. Contractual obligations to provide information may materially affect the costs decision, particularly where the documents sought should already have been supplied under the parties’ agreement. A proportionate order may require the respondent to recover only part of its costs, with compliance costs treated separately.

Moduleco applied under Part 31 of the Civil Procedure Rules for pre-action disclosure from Carillion concerning a cancelled Department of Health project. The parties had previously agreed that Carillion would provide information about Moduleco’s claim and any resulting settlement, subject to confidentiality. Before the hearing, they agreed substantially the form of the disclosure order, including appropriate redactions and time limits. The application therefore proceeded only on costs.

1. Substantive disclosure. The parties had agreed the order in substance. Carillion thereby accepted that Moduleco was entitled to the relevant classes of documents.
2. Applicable costs rule. CPR Part 48.1(2) makes the respondent’s recovery of the application costs the general rule. Under Part 48.1(3), the court may make a different order having regard to all the circumstances, including whether it was reasonable for the respondent to oppose the application. The approach in SES Contracting v UK Coal plc [2007] EWCA (Civ) 791 was applied.
3. Contractual context. The December 2007 agreement required Carillion to provide as much information as possible about the progress and resolution of Moduleco’s claim, subject to confidentiality. Substantial parts of the documents sought, including the settlement agreement, correspondence, minutes and the consultant’s report, probably fell within that contractual obligation. This materially distinguished the case from an ordinary application where the respondent is entitled to await the application and assess its position.
4. Unreasonable opposition. Carillion was initially entitled to review the application and decide how to respond. After service of its witness statement on 2 February 2009, however, its continued objections and qualifications were unjustified or readily resolvable, especially by redaction. Carillion should therefore have accepted the application in broad terms by the end of January.
5. Order. Carillion was awarded half its assessed costs of the application and hearing, together with all reasonable costs of complying with the agreed disclosure order. Summary assessment was deferred, the parties had permission to apply, and £5,000 was ordered on account within 14 days. The court also regarded Carillion’s bill as disproportionate.