EMW Law LLP v Halborg

The court may order specific disclosure by reference to the issues raised on the pleadings, before those issues have been determined. Documents may remain relevant even where a party disputes the legal basis of the claim or denies that a settlement occurred. Without prejudice material may be disclosed where it is relevant to whether a settlement was reached, or to issues distinct from the negotiations, provided appropriate safeguards protect the parties to the negotiations. A preliminary issue should generally be ordered only where it is decisive or potentially decisive, can be tried without substantial factual investigation or delay, and is likely to save costs and resources. The potential to dispose of a claim is not, by itself, a weighty consideration.

EMW Law LLP, a solicitors’ firm, claimed payment from Scott Halborg under an agency conditional fee agreement. The agreement concerned work carried out by EMW in litigation conducted by Mr Halborg under a separate conditional fee agreement. EMW alleged that Mr Halborg had failed to recover and allocate its costs and had breached various implied terms.

EMW sought specific disclosure of documents concerning the costs recovery negotiations, payments, the work performed and communications with the costs draftsman. Mr Halborg opposed disclosure, relying principally on relevance and without prejudice privilege. He also sought a preliminary trial of whether the alleged implied terms existed. The court therefore had to determine the scope of disclosure and privilege, and whether separating the implication issue would promote efficient case management.

1. Specific disclosure. The relevant question was whether documents related to the issues in the claim at the stage when those issues remained undecided. The defendant’s assertion that the implied terms were disputed did not make documents concerning their alleged breach irrelevant. The correspondence with Berrymans was relevant both to the alleged conduct before and after the asserted settlement and to the issue whether any settlement had occurred (paras 22–33).
2. Without prejudice privilege. The privilege belonged jointly to the Halborg claimants and the architects, rather than to the defendant personally. The documents were nevertheless disclosable. Correspondence relevant to whether a settlement had been reached fell within an established exception to the without prejudice rule. Further, applying the reasoning in Muller v Linsley & Mortimer [1996] 1 PNLR 74, relevant material could be disclosed where it was sought for issues distinct from the negotiations and not as admissions against interest. The criticism of that reasoning in Ofulue v Bossert was directed to the scope of privilege and did not undermine the relevant public-policy analysis. Safeguards under Civil Procedure Rules 1998, r 31.22, could prevent prejudicial public use (paras 34–58).
3. Other documents. Documents evidencing payments, the work performed by EMW, and communications with the costs draftsman were relevant to breach, loss, and the extent and value of EMW’s work. Relevant privilege had been waived in respect of documents concerning work carried out on behalf of the clients (paras 60–64).
4. Preliminary issue. The court refused to order a separate trial on the implication of terms. The governing considerations included whether the issue was decisive or potentially decisive, whether it could be tried on agreed or assumed facts, and whether it could be determined without significant delay, expense or a likely appeal. Here, several terms were alleged, factual investigation and oral evidence were likely, the parties could not realistically agree the relevant facts, and a preliminary trial was likely to produce two proceedings rather than save resources (paras 66–79).
5. The court ordered disclosure of all requested categories except the signed bill of costs, which had already been dealt with, and communications with the SCCO, for which no documents were said to exist and that category was not pursued (paras 25–26, 59, 65).

The judgment records earlier proceedings concerning related implied terms:

• Senior Courts Costs Office: Master Campbell dismissed the defendant’s summary judgment and strike-out application on 24 October 2014.
• Appeal: Permission was granted by Nugee J, but the appeal was dismissed by HHJ Charles Purle QC.
• Court of Appeal: Vos LJ refused permission for a second appeal on most points. Briggs LJ granted permission on one unrelated costs issue.

Those proceedings concerned related litigation and were not decisions under appeal in this judgment.