Lloyds Developments Limited v Accor Hotel Services UK Limited

The court may depart from the usual costs order where a successful application has been necessitated by the applicant’s unreasonable conduct. In disclosure exercises, the court may require an independent solicitor to review documents where previous review and redaction give rise to a real risk of confirmation bias. A direction permitting further disclosure orders, including a witness statement explaining disclosure, is inclusionary rather than exhaustive. Documents mentioned in witness statements should be ordered only where production is reasonable and proportionate, including consideration of their likely probative value.

This was a first-instance judgment concerning costs and disclosure applications arising during ongoing litigation. The claimant had applied for an extension of time to comply with an unless order and had filed the application shortly before expiry without initially giving reasons or notifying the defendant. The judgment also addressed the review and further disclosure of WhatsApp messages, a witness statement explaining the creation of an inadequate disclosure document, documents mentioned in administrators’ witness statements, and costs relating to Particulars of Non Compliance.

The central issues were whether the claimant should pay the defendant’s costs despite succeeding on the extension application, whether independent review and further disclosure should be ordered, and whether the requested documents and costs were reasonable and proportionate.

1. Costs of the extension application. Although the claimant succeeded in obtaining an extension of time, the court ordered it to pay both parties’ costs of that application. The application was made at the last moment, in an unsatisfactory manner, and after a deliberate decision not to comply with the unless order. That conduct caused unnecessary costs and justified the unusual order.
2. Costs of the judgment application. The defendant was not awarded the costs of its necessarily unsuccessful application for judgment. The claimant’s conduct supported the costs order on the extension application but did not justify a further order in respect of the separate application.
3. WhatsApp disclosure. The WhatsApp messages had been disclosed in a muddled form with extensive redactions. An independent firm of solicitors, jointly instructed at the claimant’s cost, was ordered to review the messages for relevance, confidentiality and privilege. The court accepted that repeating the exercise through the same solicitors created an obvious danger of confirmation bias, referring to Recovery Partners GP Limited v Rukhadze & Others [2021] EWHC 1621.
4. Witness statement explaining disclosure. Paragraph 17.1 of Practice Direction 57AD was an inclusionary direction. It permitted, rather than excluded, an order requiring a witness statement explaining matters relating to disclosure. Such an order was relevant, useful and proportionate because the defendant was entitled to know how the inadequate disclosure document had been created.
5. Documents mentioned in witness statements. The request for documents concerning litigation funding was refused. Although paragraph 21 of Practice Direction 57AD permits requests for documents mentioned in witness statements, paragraph 6.4(3) required attention to their likely probative value. Funding documents had no probative value on the substantive claim or defence, and the suggested relevance to possible future evidence was speculative.
6. Particulars of Non Compliance costs. No payment order was made. The costs had been dealt with by the earlier order requiring the Particulars of Non Compliance, and did not fall within costs of and occasioned by the amendments. In any event, such costs would not ordinarily be ordered for immediate payment during the proceedings.