In the matter of BDW Trading Ltd v Lantoom Ltd, Mr Justice Kerr considered whether a substantial increase of disclosures documents should be considered a significant development and if the knock-on effect to other phases should also be considered
The Claimant was seeking damages for allegedly substandard stone that was supplied by the Defendant. The claim was quantified for damages and indemnities comprising remedial works and expenditure totalling £5.354 million.
When the Claimant’s costs budget was drawn, it was assumed that no more than 50,000 documents would need to be collated for disclosure purposes, with 15,000 requiring individual review. Upon collating the documents, it transpired that more than 250,000 documents were identified, with 70,000 likely requiring individual review. The Claimant asserted that an increase by this amount met the requirements of a significant development.
The Parties’ positions
Despite initial resistance from the Defendant, a Consent Order was agreed between the parties allowing an increase to both the disclosure phase of the Claimant’s budget by £90,000 (to a total of £177,264.16) and the disclosure phase of the Defendant’s budget by £70,000 (to a total of £134,202.50).
Following disclosure, the Claimant sought additional funds in the sum of £70,000 (to a total of £138,000) for the Witness Statement phase and the sum of £106,000 (to a total of £239,600) for the Expert Report phase as a result of the substantial increase of documents. The additional documents required the Claimant to produce almost triple the amount of anticipated witness statements and it increased the number of documents that the Claimant’s expert would have had to consider.
The Defendant took the view that an increase to the Witness Statement and Expert phase would be wholly disproportionate, and the substantial increase of disclosure documents was already accounted for in the agreed increase to the disclosure phase. They contested that an increase of disclosure documents was not a significant development as the Claimant had merely underestimated the number of documents that would be obtained.
Justice Kerr accepted the Claimant’s position and stated that the Defendant had implicitly accepted that the substantial increase of disclosure documents was a significant development when they agreed the consent order. This uplifted the Defendant’s cost budget using the same logic.
When considering the impact to other phases in addition to disclosure, Justice Kerr found that the knock-on effects of the avalanche of documents, that was not anticipated by either side, was likely to impact the adequacy of the budget for subsequent phases.
Justice Kerr agreed to increase the Witness Statement and Expert Report phases of both budgets to allow for the additional work required. He did not allow for any increase that was not a direct consequence of the additional documents.
The ruling in this case not only strengthens the argument that an unexpected and substantial increase to the level of disclosure documents is considered a significant development, but it also highlights that the Court are willing to consider implications outside of the directly impacted phase.