The High Court has sent a strong signal to law firms ‘sub-contracting’ disclosure work to third parties.
In Van Oord UK Ltd and SICIM Roadbridge Ltd v Allseas UK Ltd, Mr Justice Coulson (pictured) said the £1.3m costs attributable to construction claims consultancy Knowles Ltd were ‘astonishing’ and should be subject to detailed assessment.
The company had been instructed to advise in a dispute arising from the laying of a gas export pipeline in the Shetland Islands.
The successful defendant party, AUK, claimed £3.48m in costs – more than a third of which were attributed to Knowles.
Coulson said his order for indemnity costs to AUK should not include the money paid by the litigant to Knowles after he questioned its role in the process.
The stance is the latest example of courts clamping down on what they perceive as unnecessary or wasteful costs, as parties are urged to consider what is reasonable and proportionate to claim.
The judge said he agreed with Finola O’Farrell QC, representing the claimant OSR, that Knowles ‘added very little, and took up little time at the hearing’, particularly given that AUK had its own expert for the purposes of the trial.
Coulson said: ‘Knowles Ltd have never acted for AUK in any set of formal proceedings. Their involvement in the disclosure exercise therefore appears, on the face of it, to be somewhat surprising.
‘I can see that there may be issues as to the recoverability of some or all of those costs.’
He said the parties should argue at detailed assessment about the proportionality and reasonableness of the fees, and whether it was appropriate for the disclosure exercise to be ‘sub-contracted’.
Coulson also said the bundles submitted were ‘far too voluminous’ and the majority of their contents were ‘irrelevant’. He added that ‘sadly, that is all too common in cases of this sort’.
However, he opted not to assign blame for that situation and said it would not be appropriate to ‘carve out’ these costs from the order.