Digicel: A cautionary tale
While litigation is by its nature adversarial, the recent Digicel v Cable & Wireless litigation shows how important it is that both sides stay reasonable and follow the correct procedures before and during the case. Failure to do so can prove expensive.
Digicel brought a claim against Cable & Wireless in 2007 on the grounds that Cable & Wireless had unlawfully delayed Digicel's entry as a competitor in the Caribbean telecoms market. In the event, the court ruled against Digicel and forced it to pay costs, but it was their 'unreasonable' approach to the litigation that attracted criticism from the judge.
In his judgment on costs in April 2010, the judge found that Digicel spread negative publicity about their opposition, put forward unwarranted allegations and made claims about Cable & Wireless’ methods and practices that were damaging to the company’s reputation. This led to him awarding costs of up to £15.5 million against Digicel on the rarely awarded and higher indemnity basis.
But there is another twist to the costs award. The Digicel case was previously notable for the 2008 judgment in which the judge ordered Cable & Wireless to extend its electronic discovery, which had already cost some £2 million, because there had been insufficient contact between the parties and the search terms for the electronic discovery exercise had not been agreed.
“This was a renowned decision, which is hailed as showing that judges are prepared to get to grips with e-discovery procedures,” Andrew Maclay, director of forensic services at BDO says. “It’s something we would always advise on doing, where possible. Whatever the specifics of the case, making sure that both sides agree on a common set of objectives and parameters when collecting electronic evidence is crucial to keeping costs down.”
However, whilst it would have rejoiced at its interim victory, this swiftly became Digicel's problem when they lost the case. Rather than simply paying the costs they would have incurred had they acted reasonably before the trial, they now have to pay Cable & Wireless’s costs on the indemnity basis including its costs of extending the electronic discovery exercise.
As Maclay says, whatever case is being contested, correct preparation is crucial – not just with an eye to achieving a win, but also to minimise the costs if you lose.
