Costs allocation following complex disclosure guidance hearing in Voltaire Capital Holdings v Watson

The High Court's recent decision in Voltaire Capital Holdings Limited & Ors v Eric Watson & Ors [2025] EWHC 1948 (Comm) demonstrates the judiciary's willingness to depart from standard costs principles when disclosure guidance hearings exceed their intended scope and complexity.

Deputy Judge Nigel Cooper KC addressed costs arising from what began as a routine disclosure guidance application under paragraph 11 of Practice Direction 57AD. The Second Defendant's request for guidance transformed into a substantially more complex proceeding than typically anticipated for such applications, which are designed to facilitate cooperative resolution rather than adversarial contest.

The hearing's complexity became evident through several factors. The court examined a hearing bundle comprising approximately 900 pages of documentation, whilst extensive advocacy from leading and junior counsel represented the competing positions. This formality contrasted sharply with the streamlined, cooperative approach envisaged for disclosure guidance procedures.

The Claimants maintained they had succeeded on the majority of disputed points, arguing that the Second Defendant's approach to questioning disclosure scope generated unnecessary costs. They contended their resistance to the Second Defendant's expansive search requirements was both warranted and necessary throughout the proceedings. The Claimants' position emphasised that departure from standard disclosure parameters should bear appropriate cost consequences.

Conversely, the Second Defendant argued that costs should remain within the general litigation framework, characterising disclosure disagreements as fundamental case management issues requiring collaborative resolution. They highlighted the absence of a formal costs statement from the Claimants prior to the hearing, suggesting this should influence any costs determination.

The court's analysis focused on whether the proceedings had transcended the typical parameters of disclosure guidance hearings. Deputy Judge Cooper KC observed that numerous issues arose extending beyond basic guidance expectations, noting the "significantly loaded" nature of the hearing with "complexity and controversy" that justified more formalised examination.

This assessment proved crucial to the costs determination. Rather than applying the default principle that costs lie where they fall in guidance hearings, the court concluded that the exceptional nature of the proceedings warranted departure from standard rules.

The resulting costs order required the Second Defendant to pay £63,267 to the Claimants, reflecting careful assessment of both time expenditure and legal work complexity. This figure represents the court's evaluation of proportionate costs arising from what became a substantially contested proceeding.

The judgement establishes important precedents regarding costs allocation in multi-party litigation disclosure disputes. It demonstrates judicial readiness to impose costs consequences when parties transform ostensibly cooperative guidance procedures into adversarial contests requiring extensive court time and resources.

The decision reinforces that whilst disclosure guidance aims to promote efficiency through collaboration, parties cannot exploit this framework to avoid costs consequences when their approach generates disproportionate complexity. The court's approach balances the cooperative principles underlying Practice Direction 57AD with accountability for procedural choices that increase litigation costs.

The ruling's broader implications extend to disclosure strategy in complex commercial litigation. It suggests that parties seeking extensive disclosure modifications through guidance procedures must carefully consider whether their approach risks transforming cooperative processes into contested applications attracting adverse costs consequences.

This case ultimately illustrates the courts' commitment to maintaining procedural efficiency whilst ensuring fair cost allocation reflects the reality of proceedings rather than their theoretical framework. By ordering substantial costs against the Second Defendant, the court reinforced that disclosure guidance procedures cannot be used to circumvent normal costs principles when their substance mirrors contested applications.