VARDY V ROONEY [2022] EWHC 2017 (QB)

CABO CONCEPTS LTD V MGA ENTERTAINMENT (UK) LTD AND ANOTHER [2022] EWHC 2024 (PAT)

HEADLINE SUMMARY

In Vardy, the court held that Ms Vardy deliberately deleted WhatsApp chats with her assistant and her assistant deliberately dropped her phone in the sea resulting in the loss of both "ends" of the end-to-end encrypted chat. Relying on established case law the judge drew inferences in the absence of "potentially significant evidence", Mrs Vardy lost her case and was ordered to pay significant costs.

In Cabo, a case with coverage limited to the legal press, the court adjourned the trial and ordered indemnity costs when, 3 weeks before trial, the defendant's solicitors informed the court that disclosable documents had been missed during the harvesting stage of disclosure, and the disclosure exercise was ordered to be re-done. The judgment makes sobering reading for litigants and legal practitioners alike.

We look at some of the lessons and ways of avoiding these pitfalls in circumstances where the potential sources of data continue to grow.

KEY LEGAL POINTS

Cabo concerned the failure by the defendant to harvest 800,000 documents for review. The failure was particularly significant given the nature of the claim and the fact that the defendant was in control of the majority of the relevant documents evidencing its conduct.

The court considered the account of the disclosure process and held that the following failings by the defendant and its lawyers amounted to unreasonable conduct, justifying the award of indemnity costs:

• 1. Insufficient oversight of the e-disclosure process by the defendant's solicitors when the court had been assured that such oversight would be provided (resulting in the court rejecting the claimant's earlier application for an order for independent supervision).
• 2. The defendant's insistence that the disclosure process be carried out in-house despite opposition from the claimants that an independent e-disclosure provider be appointed with experience in English legal proceedings.
• 3. The defendant's solicitors' failure to take steps following the identification of "red flags" as follows:
  • a. A key email referred to in the pleadings was not in disclosure and had not been harvested despite a custodian (and witness) being a party to the email concerned (a red flag that the court held should have prompted, at least, a re-harvesting of that custodian's data).
  • b. A group of emails sent to the defendant's solicitors at the time the defence was pleaded were not checked to determine whether the documents had been harvested or disclosed until very late in proceedings (just before the pre-trial review).
  • c. Documents which were intentionally excluded from batches of documents for review were never revisited and reviewed resulting in the failure to disclose relevant documents.
• 4. Re-harvesting was carried out but this was again done in-house without proper oversight from an experienced e-disclosure provider. Problems persisted despite assurances from the defendant's solicitors that the process was robust.

COMMENTARY

These cases are a stark reminder of the pitfalls of disclosure and the need to ensure that documents are preserved, and disclosure obligations are complied with, by parties to proceedings and their lawyers.

Documents should be preserved and harvested with care.

Whilst there is no requirement for external providers to harvest data, consideration needs to be given to whether the method of harvest is both appropriate and defensible were it to be challenged.

It is always advisable to avoid trying to filter what is collected (filtering using Outlook has particular pitfalls which lie at the heart of the issue in the Cabo case). Uploading whole mailboxes and other sources to a review platform means that filtering and searching can be performed on one review tool, under the supervision of solicitors and experts, with a proper audit trail (and flexibility to revisit and change filter criteria to deal with changes in scope or amended pleadings). Analytics and searches can be used to undertake gap analysis to ensure the data harvested is complete and includes the documents expected.

Mistakes do happen and "red flags" such as unexpectedly missing documents and gaps should be followed up – both to quickly identify wider issues in time to deal with them, and to ensure that points that will almost inevitably be picked up by the other side are anticipated and resolved before they are raised or can be dealt with quickly and confidently.

It is good practice to ensure that documents referred to in pleadings are uploaded to any review platform at the earliest opportunity, not least because they are useful "seed" documents with which to begin training any AI based Technology Assisted Review software.

Click here for our summary of one of the disclosure applications in the Vardy claim earlier this year.

Key Contacts

RESHMA KHANABIBI