Wyche v Careforce Group Plc

I have heard two applications in this case today. An important part of the background to those applications is that the defendant, which I shall refer to as Careforce, admits that it failed in January this year to comply in all respects with an “unless” order made on 26^th November 2012 by Burton J.

In that regard, key elements in the court’s approach are common ground. They are these:

While dealing with the case of Fred Perry (Holdings) Limited, I should also note what was said by Lewison LJ at paragraph 24 of his judgment. The appeal concerned a decision of Mann J following breach of an “unless” order made by Henderson J. The contention that Lewison LJ was dealing with appears to have been a contention that Mann J, when considering the interests of the administration of justice under CPR 3.9 as it then stood, paid no or insufficient regard to the fact that a strike-out was “a particularly draconian sanction”. What Lewison LJ said at paragraph 24 included the following:

I turn to the two applications in the present case. The first was issued by Careforce on 7^th May this year. It seeks relief from sanctions in relation to Careforce’s non-compliance with the “unless” order.

The second application was issued by the claimant, whom I shall refer to as Mr Wyche. It seeks a declaration that Careforce’s defence has been struck out for failure to comply with the “unless” order. It also seeks ancillary relief.

The background facts are set out in a draft case memorandum prepared by the legal team for Mr Wyche. The draft has not been agreed. For the purposes of today I assume it to be correct. It is as follows:

The last paragraph of that draft case memorandum needs updating. A case management conference took place on 9^th March 2012 before His Honour Judge Mackie QC. Directions were made with a view to trial estimated to last four days. Pursuant to those directions a trial was fixed for 21^st to 24^th January this year.

However, there were problems with electronic disclosure on the part of Careforce. These problems included what have been called “timeline gaps” for which Careforce could offer no explanation. That, among other things, led to the hearing before Burton J on 26^th November 2012. By his order of that date Burton J vacated the January fixture.

Mr David Casement QC, who appears for Mr Wyche today, says that this was as a result of Careforce’s failure to comply with its disclosure obligations. I shall work on that basis. The order made by Burton J on 26^th November 2012 included a number of directions which sought to ensure that the trial could take place later this year. It is presently listed for Monday, 14^th to Thursday, 17^th October. The “unless” provision applied to paragraph 2 and only to paragraph 2 of the order. That paragraph, setting out requirements as to e-disclosure, stated:

Paragraph 2 refers to an attached “keyword search.” This is a lengthy document. I will not attempt to set it out. Mr Casement rightly notes that the requirement to conduct a keyword search formed part of paragraph 2, so that if Careforce failed to comply with that requirement then under Burton J’s order it would be debarred from defending.

Paragraph 3 of the order required Careforce to produce witness statements dealing with various aspects of Careforce’s disclosure. This was to be done contemporaneously with the specific disclosure exercise required by paragraph 2. The deadline for both paragraphs was the same, 31^st January this year.

Other paragraphs in the order gave revised directions to take the case to trial. Those directions included the exchange of witness statements, which was to be by 15^th March 2012; and expert accountant reports, which were to be provided by 26^th April 2013. The trial bundles were to be ready by 31^st May 2013.

Careforce was ordered to pay the costs of the application before the Court on 26^th November 2012. In accordance with the order Careforce has made an interim payment of £10,000 in that regard.

A further order was sought on behalf of Mr Wyche at the hearing before Burton J. Mr Casement has explained that as there had been several attempts at getting e-disclosure right, none of them successful, there was a proposal on behalf of Mr Wyche that the substantial costs he had incurred should be paid by Careforce. This proposal was advanced on the footing that the consequence of Burton J’s order would be that e-disclosure would start afresh. The proposal was contested on behalf of Careforce and was not adopted by Burton J. As I understand it from what Mr Casement has told me, Burton J felt unable to deal with the actual history at that stage, but in Mr Casement’s words: “Overall that there had been fault on the part of Careforce was not in doubt.” The solution adopted by Burton J is set out in paragraph 16 of the order. This provides:

In January this year Careforce purported to comply with both paragraph 2 and paragraph 3 of Burton’s J order. As I mentioned at the outset of this judgment, Careforce now admits that there was a failure to comply in all respects with paragraph 2 of the order.

In that regard Mr Thomas Braithwaite, who appears for Careforce today, has lodged a skeleton argument in which he accepts that there were errors which prevented full compliance with paragraph 2 of the order. His skeleton argument summarised the errors and their consequences in this way at paragraphs 10 to 16:

In the light of what was said by Mr Braithwaite in his skeleton argument, it appeared to me that the most efficient use of court time would be for me to ask Mr Casement, in oral submissions on behalf of Mr Wyche, to take Mr Braithwaite’s skeleton argument as read and to explain why the Court should make the order sought by Mr Wyche. Mr Casement readily responded to that request. He has made oral submissions, which echo his skeleton argument and have built upon it. I am grateful to him for the clarity with which his submissions have been expressed and the care that he has taken, both in his oral submissions and in his written skeleton argument.

Mr Casement began by referring to the background. The initial order by His Honour Judge Mackie QC had provided for disclosure in April 2012. E-disclosure, however, was not provided within the timeline laid down by His Honour Judge Mackie QC. Batches of e-disclosure had been provided in the period June to August. The experts instructed on behalf of Mr Wyche had visited Careforce and an analysis had been made in which inconsistencies were identified. Work on timeline problems was still needed in November 2012, when the matter came before Burton J. As to the deadline for getting that work done, the proposal for Mr Wyche had been for a shorter deadline than that imposed by Burton J. He allowed until the end of January at the request of Careforce, which said that a period to the end of January would be needed in order to overcome problems, including the timeline problems. As I mentioned earlier, Mr Casement submitted that even though questions about the cost of the e-disclosure exercise had been reserved to the trial judge under paragraph 16 of the order, there could be no doubt that Burton J was making a finding of overall fault in relation to e-disclosure on the part of Careforce.

At this stage of his oral submissions Mr Casement stressed that e-disclosure was vital. In that regard I have at the forefront of my mind a point which was made by Mr Casement in his skeleton argument. At paragraph 15 he said this:

I should add in this regard that Careforce is part of a very substantial enterprise, the Mears group of companies. Orally Mr Casement stressed that Mr Wyche is no longer involved in the business and that the actual running of the business during the period in question is crucial to the issues in the case.

Returning to the timeline, Mr Casement noted that the terms of the keyword search were agreed in November, and the agreed terms were set out in the attachment to Burton’s J order. That keyword search was, he submitted, a vital filter to reduce the number of E documents to be considered. A failure to apply the keyword search would be a breach of paragraph 2 of the order and it would inevitably, submitted Mr Casement, be a material breach. In my view that puts it a little too high. There might be completely trivial matters which would not amount to a material breach. I shall turn to the question of materiality later in this judgment.

Mr Casement submitted that compliance by 31^st January was a material term. That was especially so, as the case was to be listed for trial with a relatively tight timetable. Indeed, when he imposed the “unless” order Burton J had had in mind that the case might be listed for hearing in July. In the event that did not prove possible. Mr Casement’s submission was that any significant delay was bound to affect the timetable. In that context he referred me to the passage from Lewison LJ’s judgment in the Fred Perry case at paragraph 24. Mr Casement submitted, and I accept for the purposes of the present case, that the decision on sanction is a matter primarily for the judge making the order.

The next stage of Mr Casement’s oral submissions concerned the breaches of the order. He relied on four breaches. The first breach was as described in Mr Braithwaite’s skeleton argument, the breach admitted by Ms Bains of Kroll. Instead of using the conjunctive “AND” search operator, she had used the disjunctive “OR” search operator. Ms Bains said that she had revised and corrected the searches. Mr Casement commented that that, however, was in April, whereas the time for compliance had been January 2013. Mr Casement noted that Ms Bains said her mistake had been inadvertent. Mr Casement did not contest that. He said, however, that it was irrelevant. Whatever the cause of the failure to comply with the order it had the same effect. Moreover, no significance should be attached to the fact that Ms Bains worked for Kroll, who were consultants employed by Careforce. They were, submitted Mr Casement, Careforce for the purposes of compliance with the order. For good measure, Mr Casement added that the error could have been prevented if checks had been made by Careforce or their solicitors.

I cannot accept that whether a mistake was inadvertent or deliberate is irrelevant. True, the effect may be the same, but I am concerned with the question of whether there should be relief. The mere fact that a mistake was inadvertent cannot in any sense be a trump card. Nonetheless, it will, in most cases at least, be a relevant consideration. Certainly, and Mr Casement accepted this, where a particular failure is deliberate, then that will weigh strongly against the party in default, absent something exceptional.

The effect of this particular mistake was not that Mr Wyche received fewer documents than he should have received: it was that he received many more. Over 112,000 more documents than needed were disclosed, the equivalent of 300 lever arch files. To set that in context, the work which Ms Bains did to remedy the matter resulted in a conclusion that 65,000 odd documents ought to have been disclosed. There could be no doubt, submitted Mr Casement, that this was a material breach of the order. He added that steps taken later, and in this particular case three months later, do not impact on the question of materiality.

I am not persuaded that the steps taken when the mistake was identified are irrelevant to materiality. I consider that the materiality of the breach is a matter which I should look at in the round. In this case it is not suggested that Careforce were actually aware of the breach any earlier than April this year, when the matter was raised with Careforce by those acting for Mr Wyche. The response on the part of Careforce was immediate and prompt. That cannot, in my view, be completely irrelevant to the questions which arise.

At this stage of his submissions Mr Casement went on to identify the second failure that he relied upon. This was that the keyword search provided that documents would be disclosed that contained the words “CHESHIRE” and “TENDER.” One of the main allegations was that Careforce had failed to tender properly for Cheshire County Council work. It was accepted by Careforce that when preparing the disclosure provided in January this year Kroll had not applied that search to the entire data set. It had searched within a data set obtained by a particular combination identified within paragraph 2 of the keyword search list. The search for documents, including the word “CHESHIRE” and the word “TENDER” had in fact been the last item in paragraph 2 of that list. The error had been to conduct that search in relation to the data set identified for other searches in the immediately preceding part of paragraph 2. This had been dealt with in the second witness statement of Mr Justin Wells, a senior computer forensic consultant for Kroll. He had added, in paragraph 7 of that witness statement that Kroll believed that the keyword list was ambiguous in this regard. If one reads the keyword list with care it is, to my mind, not ambiguous. I did not hear submissions on the point from Mr Braithwaite.

I asked Mr Casement to proceed on the footing that it was not ambiguous, but that numbered sub-paragraphs would have helped to make the position clear. Mr Casement in his submissions went on to note that while Mr Wells dealt with the matter, there was no explanation from Ms Bains. Mr Wells said that Ms Bains no longer worked for Kroll. That, commented Mr Casement, would not prevent attempts being made to seek an explanation from Ms Bains. At the hearing today Mr Casement drew my attention to some annotations which he told me Ms Bains had made to a document sent to her by Careforce in January this year. A search had been identified by Careforce’s IT team, which would have involved looking for either word. It is not clear to me precisely what context that arose in, but it appears to have been in the context of the second to last of the searches set out at paragraph 2 of the keyword list. In red on that document the word “TENDER” has been added underneath “CHESHIRE” and to the right of it a comment has been inserted: “Should this be added as a standalone search time on its own, modified as: Chesire AND Tender.” This, Mr Casement told me, was a comment from Ms Bains. She had, he submitted, spotted the important point that there needed to be a standalone search with regard to “Cheshire” AND “Tender” although she misspelt “Cheshire.”

The third failure identified by Mr Casement was the use of the word “Chesire” rather than “Cheshire.” The effect of that breach was to create a false search. Mr Wells at paragraph 6 said that although he understood there was such a mistake, nonetheless a search was also made using the proper spelling. Mr Casement criticises Mr Wells’s second witness statement for failing to set out the basis of that information. In particular he did not say that he had spoken to Ms Bains.

The fourth failure identified by Mr Casement concerned claims for legal privilege. In March Mr Wyche’s solicitors had drawn attention to the need to identify the date from which it was said that legal privilege was being claimed for documents, and to distinguish between litigation privilege and legal advice privilege. On 4^th July this year Careforce’s solicitors had sent 65 documents to the solicitors for Mr Wyche, stating that they had been “mis-categorised” as privileged. In that regard, however, Mr Casement rightly acknowledged that it was appropriate to have in mind what was said by Careforce’s solicitors in the last paragraph of their second letter of 4 July 2013, explaining that the sift caught documents subject to litigation privilege (in respect of other cases) and also without prejudice privilege with respect to third party dealings.

Mr Casement did not contest the accuracy of what was said in that last paragraph. Indeed, he did not say that taken on its own the mis-categorisation of the 65 documents amounted to a material failure to comply with Burton’s J order. His submission was that cumulatively it was an example of Careforce failing to give proper consideration to disclosure.

In his oral submissions Mr Casement then turned to the question of relief. This case, he submitted, is exactly the type of case that the new CPR 3.9(1) was designed to deal with. It was designed to ensure that there would be justice for the parties involved in the particular case and justice on what Mr Casement described as “the macro level.” By that I understood him to refer to the importance, recognised in the overriding objective, of having regard to the interests of justice for all court users. Mr Casement made a comment that if human error were an answer then the new CPR 3.9(1) might as well be put on one side.

In my view this comment, if it is intended to say that human error can never be a ground for relief, takes matters to an unacceptable extreme. I have no hesitation in accepting what is said by Jackson LJ in the Fred Perry case. He was concerned there to make it absolutely clear, and he did make it absolutely clear, that a culture of delay and non-compliance is unacceptable. He did not say that the Court will never make any allowance for human error.

I would add this. The court is not a martinet. It does not blindly insist that every ‘i’ be dotted and every ‘t’ be crossed. Thus it is that the court will not ordinarily punish immaterial breaches. Moreover, even where there is a material breach, the court’s role is not automatic. It does not apply the rules unthinkingly, nor does it expect that human beings, who must carry its orders into effect, will act as automatons.

As regards the first failure, Ms Bains had explained that she was not aware of it until April. Mr Casement complained that there had been no attempt to remedy the matter until mid-April. The relevant delay, he submitted, was a period of two and a half months after the end of January. Anticipating the obvious point that it was only on 13^th April that the error became apparent to those acting for Careforce, Mr Casement said that it was not for Mr Wyche to have to highlight matters. What was clear was that when Mr Wyche’s team received the search results field from Careforce, a check of it showed that there had been the use of the disjunctive rather than the conjunctive. It was, submitted Mr Casement, for Careforce to double check and triple check compliance with the order.

It does seem to me that this is putting matters too high. Careforce had engaged competent contractors. There is no reason to doubt that those contractors had employed a competent person in the form of Ms Bains to put the keyword search into effect. Most importantly, by mid-April the position in this regard had substantially been remedied. Mr Casement submitted that nonetheless, by mid-April the timetable was already in great difficulty.

He went on to deal with the other failures. In relation to the next admitted failure, namely searching only a sub-set of documents for the words “Cheshire” AND “Tender”, Mr Casement submitted that there was a continuing breach. He recognised that at paragraph 8 of his witness statement Mr Wells said that following additional queries raised by the solicitors for Mr Wyche, Kroll had indeed performed the stand alone search and that this had resulted in 24 “additional documents not previously produced.”

Mr Casement referred me to a report which had been prepared in May this year on behalf of Mr Wyche by Mr Terence Harrison. He had stated that in the “non-responsive documents” 200 documents had been identified which would comply with the terms of such a standalone search. I should explain that the non-responsive documents were those which were wrongly included in the original disclosure in January. However, it seems to me that that misses the point, for what was said by Mr Wells was that the 24 documents, which Mr Casement contrasts with the 200, are 24 documents which were “not previously produced.” Mr Casement seeks to answer that by referring to a witness statement of Mr Harrison served at midday yesterday. This said in paragraph 7:

“Further analysis ... shows that there are 483 documents ... which contained the words “Cheshire” AND “Tender,” but are marked as “non-responsive.”

No explanation is given as to how that arises. It is a point which is taken only in oral argument today on the basis of a statement served yesterday. I am not prepared to accept that this would justify my making a finding of continuing breach in that regard.

The third point concerns the misspelling. There is, submits Mr Casement, no proper explanation as to why “Cheshire” was not properly spelt. As to that, however, Mr Wells has said in his second witness statement that there was not just a search using the wrong spelling, there was additionally a search using the correct spelling. In any event there is no reason to doubt that in the latest search - the search which produced the 24 additional documents - “Cheshire” was correctly spelt.

The fourth point advanced by Mr Casement is the late disclosure of the mis-categorised documents, which in the event were non-privileged. I have dealt with that earlier in this judgment.

The fifth point taken by Mr Casement was that the position was that there were material breaches of the order and the consequence was that the defendant was debarred from defending since 31^st January 2013. Under the rules that is right, but it is subject to any application under CPR 3.9. Looking at the matter from the point of view of those who were getting this case ready for trial, there was no reason for them to stop preparing for trial on 31^st January 2013. I am sure they did not do so. Indeed, those on Mr Wyche’s side were going through the material that had been provided to them at the end of January and they were no doubt also keeping under review the preparation of witness statements and the making of arrangements for expert reports.

The sixth point taken by Mr Casement is that Careforce has not remedied its failures. For the reasons I have given earlier I cannot accept that that is a matter which is established for the purposes of today’s hearing.

The seventh point is that if the Court were to grant the relief sought by Careforce the trial date would have to be vacated and when it was refixed, in order to deal with all the problems about disclosure, an extra day would be needed at the trial.

It seems to me that the shape of this case was such that preparations for trial could and should have continued after the receipt of Ms Bains’s witness statement. That made it clear that the error was unintentional. It was plain that the error that she had made had not involved any failure at all to provide Mr Wyche’s team with a document they should have been provided with. True, they had had to look at many more documents than might otherwise have been the case, but what is clear is that they were able to assimilate the new material.

I am not prepared to proceed upon the basis that the trial date would have had to be vacated as a result of what happened. It seems to me that the decision taken to seek to seize upon the fact that an “unless” order had been made may be a decision which has made it more difficult to get the case ready for trial. I will examine readiness for trial with counsel later today.

The eighth point taken by Mr Casement is that if relief is granted this will be the fifth attempt at providing disclosure. That may be. It is also important in my view to recognise that electronic disclosure is notoriously difficult. There are many cases where more than five attempts are needed in order to get it right.

The ninth point taken by Mr Casement is an elaboration of the macro point that I mentioned earlier. That is that there will be interruption to the court lists and other litigants are inconvenienced. By contrast, however, if Careforce is debarred, only one day’s hearing will be needed and that can be dealt with relatively speedily without inconveniencing other litigants.

Mr Casement concluded his submissions by observing that Mr Wyche does not have the vast resources of the Mears Group. As I indicated earlier, this is a point which I have at the forefront of my mind.

Mr Casement went on to say that the decision of whether the “unless” order was an appropriate sanction was a decision for Burton J, from which there has been no appeal. That I undoubtedly recognise. That is not to say, however, that Burton J could foresee all eventualities.

Mr Casement urges that I should consider the need for cases to be conducted efficiently and at a proportionate cost. I must and do consider this, along with the need to enforce compliance with orders, because I am required by CPR 3.9(1) to do so when, in accordance with that paragraph, I “consider all the circumstances of the case”. Those matters have been singled out in the new rule, but the words I have quoted make it clear that they are not the only circumstances which call for consideration.

Mr Casement’s submissions ended by stressing points he made earlier - the suggested irrelevance in his view of inadvertence, the suggested irrelevance in his submission of the size of the task, and his urging that if relief were granted in the present case it would be difficult to see where that left the new Rule 3.9(1). I have dealt with all those matters earlier.

In these circumstances I am satisfied that there were two material breaches of the order. The first is that described by Ms Bains. The use of OR rather AND did not deprive Mr Wyche of any document he was entitled to see. It meant that his legal team had to review 170,000 odd documents rather than 70,000. They had the documents on 30^th January. By early April they had spotted that there was an error. That led to a speedy response and a speedy remedy, an overlay which identified 70,000 documents. I am satisfied that the breach was unintentional. While it caused problems to Mr Wyche’s side, they were temporary only.

The second breach of the order is that described by Mr Wells. The keyword document comprised seven numbered paragraphs. There were no numbered sub-paragraphs. On a careful reading I do not think it was ambiguous, it required a general search for documents with the word “Cheshire” and the word “tender.” In the absence of numbered sub-paragraphs, however, the error was an easy one to make when dealing with such a complex task. I am satisfied that the error was unintentional.

As to what happened after the error was identified I am not in a position to say that the criticisms advanced by Mr Harrison are justified. Accordingly, I hold that once it was identified the error was easily remedied. It deprived Mr Wyche’s side of sight of 24 documents. Insofar as this caused problems to Mr Wyche’s side they were temporary only. I reject the suggestion that Ms Bains failed to search for “Cheshire” rather than “Chesire.” Mr Wells says she did both. It does not seem to me necessary for him to have spoken to Ms Bains in order to be able to say that. He is a senior consultant at Kroll and he has had all the relevant material available to him.

The oral submissions of Mr Casement made no mention of what in this case was a very significant feature of the evidence lodged for the purposes of the applications. That concerned complaints about the Careforce witness statements produced this year. As Mr Casement’s skeleton argument recognised, those matters were all matters which could only be dealt with on an occasion when the relevant witnesses were cross-examined. It was said nonetheless that the approach by Careforce to e-disclosure remained a continuing concern. In my view many of the matters which were set out at great length in evidence on behalf of Mr Wyche, and have been responded to at great length in the evidence on behalf of Careforce, are matters which should never have been raised in relation to the present application.

As regards submissions complaining about Careforce’s conduct prior to November 2012, I would have more sympathy with those submissions if the complaints concerned matters after that date. Evidence lodged on behalf of Mr Wyche asserted that Careforce had had to be pushed into doing things and that its e-disclosure prior to November 2012 was a shambles. It is relevant in this regard, however, that Burton J was not prepared in November to resolve disputes about the extent to which the e-disclosure provided was “a shambles.” I have seen a good deal of the material and while there are things that Careforce plainly got wrong and plainly appear to have involved significant lateness, I do not think it would be right for me to proceed on the basis that there was “a shambles” prior to November 2012. It seems to me that my focus should be on the approach taken by the team for Careforce since November 2012. As regards the period since November 2012 no grounds for criticism of the honesty and integrity of those involved have been shown. Nor is it shown that the failures since November 2012 which have been identified are failures which would of themselves make a trial in October this year impossible.

I fully recognise the major change which has come about with the new CPR 3.9(1). As Jackson LJ said, it means that those who substantially disregard court orders will receive significantly less indulgence than hitherto. I accept that the two breaches which I have mentioned earlier are material. They are material in the sense that they are not trivial. I pay no regard to the alleged breach in relation to misspelling, for the reasons I have given earlier, nor do I pay regard to the question of mis-categorisation. On any view it seems to me that that was trivial.

I must take account of all these factors and make a judgment in the nature of a balancing exercise. In the circumstances of the present case I give very great weight to the two sets of criteria, identified at sub-paragraphs (a) and (b) of CPR 3.9(1), in considering whether it is right that I should grant to Careforce the relief that it seeks.

I am satisfied that Careforce’s breaches do not fall into a category where the granting of relief would have a consequence inconsistent with the important principles identified in the Fred Perry case. The mistakes were unintentional. They caused problems. However the mistakes initially identified and dealt with by Ms Bains in her witness statement caused problems which were no more than temporary. There ought, in my view, to have been a recognition of this when Ms Bains’s witness statement was served. Preparations for trial ought to have continued, although they might reasonably have been interrupted for a period of about a week or so while an explanation was provided and the answer, in the form of the overlay, supplied. The application made by Mr Wyche in relation to that matter should never have been brought.

Similarly it seems to me that the failure to understand the correct meaning of the keyword search and to apply the “Cheshire” and “Tender” search to the entire data set was not a failure which warranted a cessation of preparations for trial. Indeed, in May Mr Harrison had identified 200 documents, already made available by Careforce, which fell within that category. There was no reason to think that there was any deliberate failure by Careforce in that regard.

In my view, while these two failures were material in the sense that they were more than trivial, they were unintentional and minor failings in the course of diligently seeking to comply with paragraph 2 of Burton J’s order. Taking account of all the factors noted above, the circumstances merit relief from the sanction envisaged by that order. Recognition of this does not in any way countenance a culture of delay or non-compliance. The culture which the court seeks to foster is a culture in which both sides take a common sense and practical approach, minimising interlocutory disputes and working in an orderly and mutually efficient manner towards the date fixed for trial. It would be the antithesis of that culture if substantial amounts of time and money are wasted on preparation for and conduct of satellite litigation about the consequences of truly minor failings when diligently seeking to comply with an “unless” order.

For all these reasons I grant Careforce’s application for relief and I refuse Mr Wyche’s application.