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Potential for adverse costs orders even in ADR

10 September 2014

In the case of Ensign Highways Ltd v Portsmouth City Council, Ramsey J made an order for pre-action disclosure in a dispute that was to be subject of adjudication.

Ensign and the council were party to a contract, pursuant to which any dispute was to be settled by way of adjudication. A dispute arose between the parties and, ahead of the adjudication hearing, Ensign requested the council to disclose all documents identified through a search against specified search terms. As a result of the search 150 documents where identified but the council refused to disclose these documents to Ensign.

Ensign applied to the court for a pre-action disclosure order.

On hearing the application the court granted the order on the grounds that:

  • these documents would form part of standard disclosure (if the matter were the subject of proceedings); and
  • they would enable the adjudicator to dispose of the matter more fairly.

It is likely that the council will also have been ordered to meet the costs of the application.

This case provides a warning that ADR does not provide parties total immunity from the court process and the potential for adverse costs orders.

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