West African Gas Pipeline Company Ltd v Willbros Global Holdings Inc

In complex electronic disclosure, wasted-costs orders may be made where a party’s mistake or error has significant consequences in time and cost. Serious failures in de-duplication, gathering electronic data and reviewing documents may justify such an order. Ordinary imperfections in OCR or promptly corrected database defects will not necessarily do so.

A costs order may be varied or revoked under CPR 3.1(7) where it was made on erroneous information or subsequent unforeseen events have destroyed its basis. A liberty to apply provision does not ordinarily permit the court to reconsider the merits of the original costs decision.

Willbros Global Holdings Inc applied for costs against West African Gas Pipeline Company Ltd in proceedings concerning a guarantee for the additional costs of completing a gas pipeline project. The application followed extensive disputes about WAPCo’s electronic disclosure, including missing documents, inadequate review, duplication, redactions, custodians, OCR and database fields.

WGH sought to vary the costs order made at a 6 October 2011 case management hearing, obtain its costs of a 1 December 2011 hearing, and recover wasted costs caused by disclosure deficiencies. The central issues were whether the earlier order could be revisited and which disclosure failures justified costs relief.

1. Variation of the earlier costs order. The costs order of 6 October 2011 was not varied or revoked. Applying the guidance in Roult v North West Strategic Health Authority [2010] 1 WLR 487, the power under CPR 3.1(7) generally arises where the original order was made on erroneous information, or subsequent unforeseen events destroyed the basis on which it was made. The later disclosure failures did not satisfy that test. The order had been made against the background of known incomplete disclosure, and the court would probably have made the same order even if the later details had been known.
2. Liberty to apply. The liberty to apply provision did not give the court power to treat the application as an appeal against the original costs decision. Good grounds, substantially equivalent to those relevant under CPR 3.1(7), were required.
3. Wasted costs. Under CPR 44.3, the court may order one party to pay costs where conduct relating to disclosure justifies that result. The relevant failures were the serious failure to de-duplicate documents, the failure to assemble a complete and consistent electronic document set, and the inadequate review of documents located by searches. These failures caused unnecessary work and disruption.
4. Problems with OCR copies and the corrupted or missing original-filename field did not justify wasted costs. OCR is inherently imperfect, and the database defect was corrected promptly without sufficient evidence of compensable error.
5. Orders. WAPCo was ordered to pay WGH’s costs of specified parts of the 21 November 2011 application in any event; 80 per cent of the costs of dealing with duplicate and redacted documents; and 50 per cent of the costs of dealing with and reviewing specified later disclosure tranches. Detailed assessment was directed, with a payment on account of £135,000.