NMC Health PLC v Ernst & Young LLP

Where disclosure from third parties is required, the court may allocate the associated review costs between the parties by assessing which party could reasonably have pursued a third-party disclosure application. It is not necessary to assume that one party alone was expected to make that application where either party could have done so. The court may use its case-management powers to reach a fair allocation of costs. That jurisdiction is now reflected in CPR 3.1(m).

This was a further case-management hearing in proceedings between NMC Health PLC (in administration) and Ernst & Young LLP. The ruling addressed costs associated with reviewing LCIA documents held by third parties represented by Eversheds. Those third parties had no objection to disclosure but required the parties to fund review costs estimated at about $70,000.

The court also referred to an earlier case-management conference before Bright J and to an unresolved confidentiality issue concerning a separate settlement agreement. The central issue was whether the claimant or defendant, or both, should bear the third-party disclosure costs.

1. Disclosure costs. The court declined to determine whether either party had delayed or was at fault after the earlier hearing. The decisive question was whether the claimant alone should have been expected to make a putative third-party disclosure application.
2. Both parties could plausibly submit that the other should have made the application. The defendant sought the documents from the claimant, but it was equally open to the defendant to pursue third-party disclosure. The court therefore declined to proceed on the assumption that either party alone should have made the application.
3. The fair course was to require the claimant and defendant to split the review costs of the third parties represented by Eversheds. The costs of this aspect of the application were ordered to be costs in the case.
4. The claimant’s jurisdictional objection was rejected. The court was not inhibited by the cited paragraphs 18 and 17 of the relevant Practice Direction. Its case-management jurisdiction, now reflected in CPR 3.1(m), justified the order.