In respect of interlocutory applications, the position is normally that costs fall to be reserved and decided at the conclusion of the litigation, unless there is some special feature. The case of Sportcal Global Communication Limited and another v Laflin certainly had special features.
The order for costs of obtaining an unless order granted in this case is of note not because the order was granted at all, but because costs were determined at an interlocutory stage. Indeed, Mr Laflin, who was on the receiving end of the order, behaved so poorly that he was lucky not to have been on the receiving end of summary assessment of the costs. It was their sheer magnitude that allowed for detailed assessment. However, he did have to make an interim payment.
So, what led to this sorry state of affairs and what practical points can we draw from it?
Mr Laflin was the former director of the claimant company, with whom he had parted ways. The claimant sought from Mr Laflin certain documents and passcodes to enable the claimant to search out material belonging to it which Mr Laflin ought not to have retained. Orders were made to that effect but not complied with. Not only were they not complied with, it seems no straight answers were provided to the claimant as to whether the email access codes were accessible. Excuses were various, from email addresses actually relating to other businesses, to simple technical issues. In respect of hard copy documents, an affidavit was required confirming that all material had been disclosed and delivered up. The affidavit provided did not reference any of the material. The end of Mr Laflin’s directorship was subject to Employment Tribunal proceedings. He attempted to argue that this added an extra layer of complexity and meant that he should not be subject to an unless order. Indeed, Mr Laflin seemed to attempt every trick in the book to avoid compliance with the orders.
The court decided that costs in favour of the claimant should be ordered at the interlocutory stage. The court took into account:
- The stance of Mr Laflin’s correspondence leading up to the application.
- Mr Laflin’s repeated refusal to engage in any meaningful way with attempts to avoid the application.
- Mr Laflin’s refusal to enter into undertakings.
- The fact that it was obvious that, when the claimants made the application, orders would be made or Mr Laflin would have to give undertakings.
- The failure of Mr Laflin to comply with the original orders made.
For want of stating the obvious, poor behaviour in failing to comply with court orders where the application for an unless order is bound to succeed is likely to result in adverse costs being awarded at an interlocutory stage. The lesson for those on the receiving end of requests for disclosure (and interlocutory orders) is to:
- Be upfront and honest as to what is available.
- Engage with the other party.
- Provide undertakings if requested and if you are able to comply with them.
- Consider the request for documents carefully. If the order is likely to be made by the court, costs are likely to follow.
- Comply with earlier orders promptly. Subsequent applications do not curry favour with the court.
Of course, it is also paramount that the potential consequences of non-compliance are explained to the client, and that there is a paper trail of the advice given, so that not only the client is advised, but also so that, as lawyers, we do not land ourselves in hot water if an adverse costs order is made.