Brown v BCA Trading Ltd & Ors

In large-scale electronic disclosure, predictive coding may be ordered where it offers a reasonable and proportionate means of identifying documents for standard disclosure. Cost is relevant, but only if the proposed method will be effective. Parties should first identify the real issues and likely document categories, then cooperate to narrow searches. The court may decline to approve excessive or inadequately supported costs-budget items while inviting reformulation or later variation.

The petitioner brought a section 994 petition under the Companies Act 2006 concerning Tradeouts Limited. At a contested case-management hearing, the respondents sought permission to use predictive coding for electronic disclosure instead of a traditional keyword-search approach. The court considered proportionality, likely costs, the breadth of the pleaded issues and the parties’ duties to the court.

The court also considered disputed costs-budget items under CPR 3.15. The central issues were whether predictive coding should be ordered and whether particular budgeted costs were reasonable and proportionate.

1. Predictive coding was ordered for the respondents’ standard disclosure. The expected cost saving was persuasive, provided that the method would effectively identify documents required for trial disclosure.
2. The parties were directed first to identify the true issues, anticipated document categories, sources and locations, and to discuss narrowing the search parameters. This promoted proportionality and a manageable trial.
3. The factors identified in Pyrrho Investments Ltd [2016] EWHC 256 (Ch) applied to the case to some degree. The court gave weight to the scale and cost of manual review, the absence of evidence of inferior accuracy, and the ability of experienced solicitors to supervise the process.
4. Under CPR 3.15, the court applied the reasonable and proportionate test to disputed costs. It declined to approve the petitioner’s proposed trial counsel fees of £445,000, required reconsideration of the £124,000 disclosure estimate, and reduced proposed pre-trial paralegal work from 250 to 180 hours.
5. The parties could return for further directions or seek permission to vary the budget if justified by further details.

First-instance case-management and costs-management decision. No appellate history is stated in the judgment.