Why undertaking inhouse disclosure could be costly

How cautious should you be in attempting a disclosure exercise on behalf of your organisation? Any untoward conduct by parties will be scrutinised throughout the duration of court proceedings, especially when the courts come to consider whether to make adverse costs orders at the end of a case.

Trying and failing to get disclosure done properly could leave your organisation in trouble in terms of cost and time.The recent High Court case of Cabo Concepts Ltd v MGA Entertainment (UK) Ltd and another [2022] EWHC 2024 (Pat) provides some useful practical points to bear in mind when undertaking a disclosure exercise.


The defendant was insistent on carrying out the disclosure exercise itself, using its in-house IT team.  Three weeks before the trial was due to start, it emerged the defendant had missed around 84,000 documents during the data collection stage of the disclosure exercise.  This led to an adjournment of the trial.The court ordered the defendant to serve evidence explaining what had gone wrong, and to repeat the disclosure exercise in conjunction with an independent e-disclosure provider.By the time of the hearing, it was clear approximately 40% of documents had been missed by the defendant at the harvesting stage, and nearly half of all potentially relevant documents were never reviewed.


The court concluded the defendant had acted unreasonably during the disclosure process and ordered them to pay the claimant's indemnity costs and costs thrown away because of the consequent adjournment.  These costs totalled over £0.5m.The court considered whether in all the circumstances the defendant's conduct in the disclosure exercise was out of the norm in that it was outside the "ordinary and reasonable conduct of proceedings".  It looked at five themes:

  1. The defendant's insistence on e-disclosure being conducted in-house and without adequate supervision of the process by their solicitors or e-disclosure specialists
  2. The lack of expertise and training on the part of the defendant's IT team to carry out the e-disclosure exercise
  3. Failure by the defendant's solicitors to identify "red flags" indicating that the disclosure exercise was defective
  4. A continuing failure to adequately grapple with the need for proper supervision and oversight of the disclosure process after the harvesting process failed the first time.

Takeaway points

The decision in this case highlights two key points:

  1. If a party does not have the necessary experience of litigation (and particularly the disclosure process), solicitors and/or e-disclosure specialists should supervise the disclosure exercise
  2. Where clients are conducting the document harvesting process in-house, it is vital they have the appropriate IT expertise.

Given the serious - and very expensive - consequences of failing to get disclosure right, a pragmatic approach should be taken when completing a disclosure exercise.  At Freeths, we frequently engage external e-disclosure providers to assist with the review process, which can result in a more efficient and cost-effective outcome.  Our aim - in line with the guidance in this case - is to work with clients to encourage engagement at an early stage to ensure the best outcome.

For immediate support on court disclosure, please contact James Hartley or Louise Wilson.


The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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