Litigants are increasingly using legal process
outsourcing as a way of reducing legal costs, but unless proper
checks and balances are put in place, these services could end up
costing you more, warn Victor Lau and Vanja Bulut.
Litigants are increasingly prepared to consider utilising legal
process outsourcing as a way of reducing legal costs. A recent UK
case of West African Gas Pipeline Company Ltd v Willbros Global
Holdings Inc  EWHC 396 (TCC) provides a timely reminder that
unless proper checks and balances are put in place, the use of
these services could end up costing more.
Lessons from England
In the West African Gas Pipeline case, the England and Wales
High Court found that West African Gas Pipeline Company Ltd (the
claimant) had failed to undertake proper discovery and ordered it
to pay the defendant's wasted costs of Ł135,000
In this case, the claimant engaged two external litigation
support providers, one of which was based in India, to fulfil its
discovery obligations. Over 70,000 documents were discovered
initially, with over 72,000 more being discovered over a number of
During the review of the initial 70,000 discovered documents,
Willbros Global Holdings Inc. (the defendant) noticed that an email
from a chain had not been discovered. This then led to an extensive
enquiry which brought to light the inadequacy of the review of the
documents carried out by the external litigation support providers,
problems with the de-duplication procedures used by the
external litigation support providers, leading to a large number of
duplicated documents which had not been properly identified and
failure to deal with redactions consistently; and
failure to gather together all the documents required to be
discovered, and then carry out a proper review process.
The High Court noted that while there must be "some give
and take" between parties in relation to difficulties which
arise out of discovery, the court may properly exercise its
discretion to make costs orders where there had been "a
mistake or error which has had significant consequences in terms of
time and cost".
As a result, Justice Ramsey found that the defendant was
entitled to have the costs wasted as it resulted in the defendant
consider, a number of times, duplicated copies of the same
analyse inconsistent redactions; and
review documents over a prolonged period which inevitably
increased costs for the defendant as the discovery process became
Managing your litigation support providers
If external litigation support providers are utilised, care must
be taken to retain control of the process in order for the party to
avoid incurring additional costs due to inadequate discovery.
Parties who engage an external litigation support provider
should consider implementing a process that ensures effective
management of document review. Steps that could be implemented
undertaking a sufficient and thorough briefing process to
ensure that the team fully understands the issues and the
providing supervision of the process, where reviewers can raise
questions in respect of particular documents;
introducing a quality assurance process such as conducting a
sample of reviewed documents to ensure the review is undertaken
correctly and is consistent; and
providing regular briefings and feedback sessions.
Effective management of the document review would aim to
minimise the need to carry out unnecessary additional work.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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