Jefford: Extraordinary position
An “extraordinary” and “unprecedented” failure of disclosure that has seen thousands of privileged documents released to the other side has been revealed in the High Court.
“Even given the vast number of documents apparently identified for disclosure, running to the millions, it is obvious that something went very wrong with the first review for privilege,” said Mrs Justice Jefford.
The disclosure came from the Gambling Commission, represented by City giant Hogan Lovells, in a procurement challenge over the award of the licence to run the National Lottery brought by The New Lottery Company, part of Northern & Shell, owned by media baron Richard Desmond.
In a ruling from 5 February that has only just been published, the judge was deciding on directions for the hearing of the claimants’ application to make use of the privileged documents. It had been set for 7 March.
“What has variously been described as an unprecedented, certainly an extraordinary, position has arisen,” the judge observed.
A re-review of a pool of documents showed that more than 4,000 documents which were in whole or in part privileged had been “inadvertently disclosed” last November, and Hogan Lovells has since said there were more among those that have not yet been re-reviewed.
What went wrong with the first review for privilege was said to be “at least in part the product of human error”, the judge said, but its nature or how it came to happen had not been explained.
“But it seems to me that it must now be the case that the defendant has some idea, at the very least, of what those errors were and where that process went wrong.
“What Hogan Lovells say they are now doing is taking – and this is my word, not theirs – a ‘cautious’ approach to the review of further documents.
“That is being carried out at a very high level and by a highly experienced team within the firm, and I certainly do not doubt that the matter is being taken very seriously and great efforts, both in terms of time applied and care applied, are being made.”
The court was told that it would take until 10 March to complete this review, “with very little explanation as to why”.
But Jefford J said the error “should not be allowed to drive the case management of this litigation; rather it should be fitted into the time available”.
The defendant had “to cut its cloth accordingly” and that – while she was prepared to tweak various deadlines in advance of the hearing – she would not move the date itself.
She gave Hogan Lovells until 14 February to identify any further claims of inadvertent disclosure, later than the claimant wanted.
“I recognise that that puts considerable pressure on the legal teams but… it seems to me that the approach to this yet further review will have to be tailored accordingly.
“The nature of the error that was made and how to correct it… must be known to the defendant.”
Jefford J ordered the defendant pay the costs of the hearing, but described the costs of £116,000 for approximately a week’s work as “astonishing in its amounts”. Bryan Cave Leighton Paisner is acting for the claimant.
“That is generated by what are clearly extremely high hourly rates; enormous numbers of hours apparently spent by solicitors; multiple solicitors attending this directions hearing; 22 hours of communication with counsel in a short period of time; a substantial period (nine hours) of communication with the client, in respect of a matter that the client would have very little input into; 31 hours apparently spent communicating with the other party and other outside lawyers when no outside lawyers have been identified and the communications with the other parties have been extremely limited.”
Rather than go through the schedule of costs item by item – “indeed it would be impossible to do so because other than high-level descriptions it is difficult to discern what has been done” – she rounded counsel’s fees, “which ought to have formed the bulk of the work in terms of the preparation of the skeleton arguments”, to £45,000 and added £20,000 in respect of the solicitors’ fees.
The judge also ordered the defendant to pay the costs of two interested parties – Allwyn, which won the lottery tender, and the previous incumbent Camelot, which itself has sued the Gambling Commission.
Here was that an “even higher” partner rate but the expenditure of partner time was “much more proportionate”. She summarily assessed the interested parties’ costs at £20,000.
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