Cabo Concepts v MGA Entertainment - Intellectual Property Sanctions

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  Cabo Concepts Ltd & Anor  v MGA Entertainment (UK) Ltd & Anor [2026] EWHC 768 (Ch) (31 March 2026)

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| | | Neutral Citation Number: [2026] EWHC 768 (Ch) |
| | | Case No: HP-2020-000016 |
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)

| | | Rolls Building
Fetter Lane
London, EC4A 1NL |
| | | 31 March 2026 |
B e f o r e :

MRS JUSTICE BACON

Between:
| | (1) CABO CONCEPTS LIMITED
(2) LICENCE WORLD LIMITED | Claimants |
| | - and - | |
| | (1) MGA ENTERTAINMENT (UK) LIMITED
(2) MGA ENTERTAINMENT INC | Defendant |

**George McDonald and Iona Branford (instructed by Spector Constant & Williams Limited) for the Claimants
Victoria Wakefield KC and Richard Howell (instructed by Fieldfisher LLP) for the Defendants

Hearing dates: 29?30 January 2026**

HTML VERSION OF APPROVED JUDGMENT ____________________

Crown Copyright ©

3. This judgment was handed down remotely at 2pm on 31 March 2026 by circulation to the parties or their representatives by email and by release to the National Archives.
5. Mrs Justice Bacon:
6. Introduction
8. This hearing follows a trial of a claim brought by the claimants against the defendants (MGA) concerning the sale of rival brands of toys. The claimants alleged that MGA had stifled the launch by the first claimant (Cabo) of its "Worldeez" toy in the UK by conduct that was anticompetitive and which also constituted unjustified threats of patent infringement proceedings. The trial was originally set down for June 2022, but was adjourned by consent very shortly before it was due to start, because of a very significant error in MGA's disclosure process which had led to a large number of documents not being harvested and disclosed. Following a hearing in July 2022 to address the consequences of that adjournment, Joanna Smith J made an order requiring MGA to pay the costs of the adjournment on the indemnity basis (the adjournment costs order), and ordered an interim payment on account of ?578,444.17.
10. The trial eventually took place in October?November 2024 and January 2025. Judgment following the trial was handed down on 16 June 2025, finding that although MGA's conduct amounted to an abuse of a dominant market position, as well as unjustified threats of patent infringement proceedings, Cabo would not have traded profitably in the absence of MGA's conduct. The claimants' claim for damages therefore failed: [2025] EWHC 1451 (Ch). The claimants sought permission to appeal.
12. The present sanctions application was issued by MGA on 22 March 2024, for sanctions arising out of alleged breaches by Cabo of its own disclosure obligations, and inaccurate evidence in that regard given by Cabo's solicitor to the court at the hearing before Joanna Smith J. MGA contended that in light of those breaches by Cabo, and applying CPR r. 3.1(7), the adjournment costs order should now be varied to provide that there should be no order as to the costs of the adjournment of the trial, alternatively that MGA should pay a reduced proportion of those costs, and on the standard basis rather than the indemnity basis. Accordingly, MGA said that the payment on account of the costs ordered by Joanna Smith J should be repaid (wholly or in part) to MGA. It also said that Cabo should in any event pay MGA's costs arising out of Cabo's breaches of the disclosure order and other late disclosure.
14. The hearing of the sanctions application was originally listed for 14?15 January 2026. On 5 January 2026 Cabo applied to adjourn the hearing until after the determination of its appeal to the Court of Appeal. That application was made on the basis that Cabo's litigation funder LCM Funding UK Limited (LCM) was at the time refusing to fund Cabo's costs of the sanctions application, and Cabo itself did not have the resources to pay for representation. On 8 January 2026, however, before any order on the adjournment application was made, the court was informed that LCM had belatedly offered to fund the costs of Cabo's representation at the sanctions application, subject to certain conditions. Following a remote hearing later that day, a short adjournment of the sanctions application was ordered so as to allow Cabo to conclude its funding agreement with LCM and to instruct counsel. The hearing of the sanctions application was accordingly relisted for 29?30 January 2026.
16. MGA was represented at the hearing by Ms Wakefield KC and Mr Howell, both of whom also appeared at the trial. Cabo was represented by Mr McDonald and Ms Branford, neither of whom had been involved in the trial.
18. Evidence
19. MGA's evidence
20. For the purposes of this hearing, MGA relied on three witness statements filed by Stephen May, a partner at MGA's solicitors Fieldfisher LLP, dated 22 March and 17 June 2024, and 24 October 2025. Those statements explained MGA's position at the time of the adjournment of the trial, and set out MGA's criticisms of Cabo's disclosure which formed the basis of this application. These included serious criticisms of not only the conduct of Cabo itself, but also the conduct of Cabo's solicitors Spector Constant and Williams (SCW), and in particular Richard Spector, the partner with conduct of the case at SCW. Mr May referred to the way in which Mr Spector and SCW had supervised Cabo's disclosure exercise both before and after the hearing before Joanna Smith J, the disclosure certificate signed by Mr Spector on behalf of Cabo, correspondence from SCW, and Mr Spector's witness statement dated 14 July 2022 provided for the hearing before Joanna Smith J (Spector 7). Mr May also responded to criticisms that Cabo had, in turn, levelled at MGA's disclosure failings.
22. Mr May's evidence was largely narrative. It was not challenged by Cabo, and there was no application for him to be cross-examined at the hearing.
24. Cabo's evidence
25. Cabo relied on two witness statements filed by Mr Spector, dated 22 September 2025 (Spector 17) and 10 November 2025 (Spector 18). These responded to the criticisms made of him and SCW, and set out Cabo's (and his) position on the way in which Cabo's disclosure exercise had been conducted, and the documents which he had filed in relation to that, including the evidence that he had given in Spector 7 in support of Cabo's application for the costs of the adjournment of the trial. Mr Spector also advanced various criticisms of MGA's own disclosure, which he said were made to illustrate that things went wrong even where a disclosure exercise was being conducted by a far larger firm such as Fieldfisher.
27. MGA sought and obtained (by consent) permission to cross-examine Mr Spector, and his cross-examination occupied the entirety of the first day of the hearing. I regret to say that Mr Spector was not an impressive witness. His written witness statements for the purposes of this hearing contained numerous errors and inconsistencies, indicating careless preparation. That was surprising and disappointing, given the gravity of the allegations made by MGA against Mr Spector's firm SCW, Mr Spector personally, and his clients Cabo, and the fact that the present case was (as Mr Spector said himself) possibly the biggest trial his firm had ever conducted.
29. Mr Spector's oral evidence did not, unfortunately, improve matters. It was hesitant, difficult to follow, often confused, and highly defensive. Mr Spector repeatedly sought to downplay the gravity of the errors that had been made, protesting that while hindsight indicated that things could have been done better, he had genuinely believed at the time that his conduct was reasonable. While Mr Spector was (understandably) unwilling to ascribe any blame to his lay clients for the errors that had occurred, he was equally reluctant to take responsibility himself for the defects in the advice and instructions which he had given to Cabo in respect of its disclosure exercise.
31. For the reasons set out further below, I do not accept MGA's submission that Mr Spector dishonestly sought to mislead the court and MGA, in the evidence given in Spector 7 for the hearing before Joanna Smith J. Nevertheless, the content and manner of his evidence was such that I cannot regard him as a reliable witness.
33. Relevant procedural background
34. The disclosure order
35. The claimants issued their claim against MGA on 15 May 2020. The disclosure order said to have been breached by Cabo was the order of Recorder Douglas Campbell KC made at a case management conference on 27 July 2021. ?5 of that order (the disclosure order) read as follows:
37. "The parties shall:
39. (1) capture data from relevant repositories and custodians (a) from 1 January 2016 to 30 June 2018 for Issues 1 to 13 and 15 and (b) from 1 January 2016 to 1 May 2020 for Issue 14; and
41. (2) when providing disclosure as ordered below, report in writing to the other parties details of the methodology used and the steps taken to (a) capture documents from relevant repositories and custodians (identifying the repositories and custodians in question) and (b) to review documents captured from such repositories and custodians."
42. Cabo's disclosure custodians were the founders of Cabo: Mr and Mrs Michaelson and Mr and Mrs Cohen (the Cabo founders).
44. ?6 of the disclosure order required the parties to serve on each other a disclosure certificate, extended disclosure list of documents and copies of the documents disclosed in searchable PDF form in accordance with PD 51U (as it then was) ??12?13. Pursuant to that order, Cabo and MGA provided disclosure on 22 October 2021. Factual and expert evidence was then exchanged in early 2022.
46. Cabo's disclosure certificate was dated 22 October 2021 and signed by Mr Spector. That set out Cabo's methodology for capturing documents as follows:
48. "1. The Claimant identified 4 persons whom [sic] held documents and they are Marc Michaelson, Hayley Michaelson, Lauren Cohen and Jonathan Cohen.
50. 2. Electronic documents were collected from their computers including email accounts (inclusive of calendar files and contacts) and PCs. It was identified that they used both their personal email addresses and email addresses with the domain 'worldeez.com' so emails were collected from both the person and 'woldeez.com' accounts.
52. 3. It was identified that there were relevant whatsapp conversations and text messages so a search was undertaken of their mobile telephones.
54. 4. The custodians had also used a file sharing system called Asana and all the documents from Asana were also captured.
56. 5. The keywords agreed between the parties were applied [and] a review was undertaken of the responsive documents. Family documents were also included even where keywords did not apply to those documents.
58. 6. The following analytic tools were applied to the documents: (i) email threading, (ii) duplicate identification and (iii) filtering by date range.
60. 7. The documents were searched for relevance by reference to the List of Issues for Disclosure. The only documents that are not being produced to the Defendants are documents that were not relevant or that are privileged."
61. Mr Spector also certified that Cabo had complied with its duties under CPR PD 51U, had taken reasonable steps to preserve documents in its control that may be relevant to any issue in the proceedings, and had undertaken any search for documents in a responsible and conscientious manner in order to fulfil the stated purpose of the search and in accordance with the obligations set out in the disclosure order and PD 51U.
63. The adjournment of the trial and the costs order of Joanna Smith J
64. The case was originally set down for a four-week trial listed to begin on 27 June 2022. On 6 June 2022 MGA informed the court there had been serious flaws in its?disclosure process,?which had been carried out by its in-house IT team, such?that?at least 84,000?potentially relevant emails relating to Mr Laughton (MGA's managing director during the relevant period of time) had not been harvested during the original disclosure exercise. MGA had identified at least 8,700 new documents from those documents for review. It was, however, not yet clear how extensive the problem was and whether it related to other custodians.
66. On 8 June 2022 Cabo applied to vacate the trial. In support of that application, Mr Spector served a witness statement (Spector 6) stating that "the timetable is already packed in the remaining 2.5 weeks of the run-up to trial. My team and the Counsel team do not have the time or capacity in the two week run up to trial to review documents and process new documents." He noted that the missed documents represented a significant share of the documents and that the relevant custodian (Mr Laughton) was at the centre of the allegations in the claim, leading Cabo to conclude that the trial could not proceed fairly. MGA informed the court on the same day that it consented to the adjournment, and an adjournment was then formally ordered on 9 June 2022. On 14 July 2022 the trial was relisted for October?November 2024.
68. A hearing was then held on 20 July 2022 before Joanna Smith J to deal with the consequential matters. By this time, it appeared that approximately 800,000 documents had been missed by MGA at the harvesting stage. MGA had also, by the time of the hearing, accepted that it should pay Cabo's costs occasioned by and thrown away as a result of the adjournment of the trial, but contended that this should be on the standard basis rather than the indemnity basis sought by Cabo. MGA also resisted Cabo's application for a payment on account.
70. At the hearing, the judge considered extensive evidence from two partners at MGA's solicitors, Fieldfisher, as well as evidence from Cabo which included Spector 6 and Spector 7. In particular, Spector 7 set out Cabo's approach to the harvesting of data for disclosure, and addressed Cabo's claim for the costs thrown away by reason of the adjournment of the trial. It is now accepted that some of what was said by Mr Spector about the disclosure procedure followed by Cabo was incorrect. MGA says that it was not only incorrect, but was knowingly or recklessly false and misleading, or at least negligent. I will return to this below.
72. Judgment following the hearing was reserved, and handed down on 29 July 2022. In that judgment, Joanna Smith J found that the disclosure errors had been caused by a "suite of technical failures" in the harvesting exercise which MGA's internal IT team had carried out, without supervision by e-disclosure specialists. The judge found that the technical failures were inadvertent, but she was nevertheless highly critical of MGA. In particular, she considered that MGA's conduct in its disclosure exercise had fallen outside the norm by reason of (i) MGA's failure to ensure sufficient oversight of the e-disclosure process in circumstances where MGA had insisted on the process being conducted in-house; (ii) the extensive and serious technical failures, which should not have occurred if MGA and its advisers had carried out the disclosure exercise with appropriate care and attention; (iii) MGA's failure to investigate and identify "red flags", i.e. indicators that the disclosure exercise was defective; and (iv) MGA's continuing failure to put in place adequate supervision and oversight of the disclosure process, leading to defects in the re-harvesting process conducted by MGA (again in-house) since the disclosure issues had come to light.
74. Joanna Smith J therefore ordered MGA to pay the costs of the adjourned trial on the indemnity basis and to make a payment on account of these costs in the sum of ?578,444.17. She also gave directions for MGA's disclosure exercise to be repeated by an e-disclosure provider.
76. MGA's further disclosure
77. MGA's repeated disclosure exercise identified over 7.5 million documents which had not been harvested in the original disclosure exercise. Once those documents were reviewed, MGA provided substantial additional?disclosure?during January and March 2023. When compared with the original disclosure provided in October 2021, MGA's final disclosure exercise identified over four times as many responsive documents as the original review, and resulted in the production of 47,656 documents that had not previously been produced, corresponding to 80% of the total documents disclosed by MGA in the proceedings.
79. Cabo's further disclosure
80. On 27 April 2023 Fieldfisher wrote to SCW raising queries in relation to Cabo's disclosure of WhatsApp messages, and requesting confirmation of the process by which relevant WhatsApp messages had been identified, collected, searched and reviewed. SCW did not respond until 1 June 2023. When they did so, SCW confirmed that they had initially asked Cabo "to search their phones for any text messages, WhatsApp messages or similar ? which were relevant to the list of issues for disclosure", but that they had now instructed Cabo's e-disclosure provider, Anexsys, to collect messages from the Cabo founders' mobile devices "in order to ensure that no messages have been missed".
82. Cabo then served a supplemental disclosure certificate on 22 August 2023 and produced 3,771 new documents, consisting of 52 WhatsApp chats and the attachments to those. Disclosure of a further 992 documents, consisting of 46 WhatsApp chats plus attachments, followed on 28 November 2023. Cabo filed an amended supplemental disclosure certificate on 13 December 2023.
84. In total, therefore, Cabo's further disclosure consisted of 98 additional WhatsApp chats together with over four thousand images attached to those chats. The additional WhatsApp chats disclosed included one chat entitled "Top Secret", which ran to 583 single-spaced pages, and which was found at ?185 of the trial judgment to have been "the main channel of communication between the Cabo founders during the period of time relevant to the claim". There were also other very lengthy WhatsApp chats which had been in frequent use by the Cabo founders, such as a chat between Mr Michaelson and Mr Cohen (394 pages), a chat between Mr and Mrs Michaelson (144 pages) and a chat between Mrs Cohen and Mrs Michaelson (64 pages).
86. On 8 May 2024 SCW informed MGA that it had discovered errors on the part of Cabo's e-disclosure provider Anexsys, as a result of which Cabo had not fully harvested and reviewed all the relevant documents from its custodians' email accounts. Rectification of that error led to the disclosure of 1,094 further documents on 9 May 2024.
88. A final matter relied upon by MGA was Cabo's belated disclosure of a settlement agreement between it and Singleton Trading Ltd dated 12 July 2019. MGA had first requested this on 11 November 2021, but it was not ultimately disclosed until 11 June 2024, shortly before the pre-trial review on 3 July 2024, and after MGA had threatened to make a disclosure application if the agreement was not provided to it.
90. Further evidence filed for the trial
91. Both parties made consequential amendments to their case in the course of July to September 2023, and there was a further round of?factual evidence between October and December 2023, with supplemental expert reports filed between January and March 2024. The further factual and expert evidence addressed both MGA's and Cabo's further disclosure.
93. The sanctions application
94. MGA informed Cabo's solicitors on 1 February 2024 that it was minded to issue the present sanctions application, which it then filed on 22 March 2024. MGA relied on Cabo's breaches of its disclosure obligations in relation to the disclosure of data on the Cabo founders' mobile phones, SCW's conduct in advising Cabo and supervising that disclosure exercise, Cabo's 2021 disclosure certificate, the evidence given in Spector 7, the further late disclosure provided in May 2024, and the belated disclosure of the 2019 settlement agreement. Relief was sought under three heads:
96. i) That the adjournment costs order should be varied to provide that there should be no order as to the costs of the adjournment of the trial, alternatively that MGA should pay a reduced proportion of the costs of the adjournment, and in any event on the standard basis rather than the indemnity basis.
97. ii) That the payment on account ordered by Joanna Smith J in the amount of ?578,444.17 (or such lesser sum as determined by the court) should be repaid to MGA.
98. iii) That Cabo should pay MGA's costs arising from Cabo's failure to disclose material from its custodians' mobile phones, the late disclosure of further documents in May 2024, and the failure to disclose the settlement agreement.
99. The parties agreed that the application should be heard after the trial of Cabo's claim which began on 8 October 2024.
101. At the pre-trial review on 3 July 2024 the court ordered the claimants to provide an additional ?1.5m in security for costs, to cover (among other things) the potential repayment of MGA's payment on account if the sanctions application was successful. The claimants were refused permission to appeal that order to the Court of Appeal on 29 July 2025. A deed of indemnity executed by Cabo's litigation funder LCM was then provided to MGA on 30 July 2024. It is agreed that the purpose of this deed included covering the repayment of the payment on account, if so ordered by the court as a result of the present application.
103. Although the sanctions application was deferred to after the trial, it was potentially relevant to the issues in the trial, since MGA alleged among other things that Mr Michaelson and Mr Cohen had deliberately failed to disclose WhatsApp chats in order to avoid disclosure of adverse material. Those contentions went to the credibility of those witnesses, and Mr Michaelson and Mr Cohen were therefore both cross-examined on these points at the trial. They both denied that they had deliberately withheld the omitted WhatsApp chats, and said that they had simply forgotten about the existence of the "Top Secret" WhatsApp chats and other relevant WhatsApp chats when they provided their disclosure.
105. The trial judgment found at ?187 that although the failure to disclose these WhatsApp chats was careless and showed a lack of diligence, Mr Michaelson and Mr Cohen had not deliberately sought to avoid disclosure in order to hide adverse material. Mrs Michaelson and Mrs Cohen said that they had not been involved in the disclosure exercise, which had been carried out by Mr Michaelson and Mr Cohen on their behalf. That evidence was not challenged by MGA at the trial.
107. At the consequentials hearing on 1 July 2025 following handing down of the trial judgment, directions were given for the sanctions application. Pursuant to those directions, on 15 July 2025 MGA filed a draft amended continuation sheet for the sanctions application, and Cabo consented to the amendments on 29 July 2025. Contrary to the directions given by the court, Cabo did not file a pleaded response to the application, but instead served Spector 17 on 22 September 2025.
109. MGA applied to cross-examine Mr Spector, and also sought a declaration that legal privilege had been waived in respect of (i) communications between the Cabo founders and SCW between 27 July 2021 and 22 October 2021, concerning the disclosure of relevant documents held on the Cabo founders' mobile telephones; and (ii) the preparation of Spector 7. Cabo consented to the application to cross-examine Mr Spector and to the declaration that privilege had been waived in respect of (i), and indeed agreed to waive privilege from 1 December 2020. Cabo contested that there had been a waiver of privilege in relation to (ii), and the court dismissed that part of MGA's application. Spector 18 was then served on 10 November 2025, addressing some of the points made by MGA in its cross-examination/privilege application, and "clarifying" certain paragraphs of Spector 17.
111. The parties' submissions
112. Shortly before the sanctions hearing, Cabo conceded that MGA was entitled to its costs of investigating Cabo's breaches of the disclosure order, as well as the additional costs of reviewing the late disclosure provided by Cabo, including the late disclosure of the settlement agreement. MGA's third head of relief is therefore no longer disputed. The sole issue in dispute is accordingly whether the adjournment costs order should now be varied, such that all or part of the payment on account should be repaid to MGA. In that regard, by the time of the hearing, MGA relied on the WhatsApp disclosure and the evidence in Spector 7 about Cabo's disclosure. MGA did not say that the adjournment order should be varied on the basis of the other late disclosure by Cabo (including the settlement agreement).
114. MGA's allegations set out on the (amended) continuation sheet attached to the sanctions application included allegations that the conduct of Cabo itself in relation to the disclosure of its WhatsApp messages was careless to a degree that fell outside the norm of litigation conduct. At the hearing, however, Ms Wakefield's submissions focused on the conduct of Mr Spector and his firm SCW. She said that the way in which SCW and Mr Spector had conducted the disclosure of Cabo's WhatsApp material was manifestly negligent, amounting to gross misconduct; and that the evidence given in Spector 7 was dishonest. If Cabo's disclosure failings relating to the Cabo founders' WhatsApp messages had come to light at the same time as MGA's own disclosure failings, they would (she said) inevitably have caused the adjournment of the trial, such that the court would likely have made no order as to the costs of the adjournment, or would have ordered that the costs be in the case.
116. Ms Wakefield submitted that in applying the case-law on the application of CPR r. 3.1(7), the adjournment costs order should be regarded as an interim or procedural order rather than a final order, and could therefore be varied on the grounds of material misstatement of the facts on it was made. Alternatively, Ms Wakefield argued that even if necessary to show exceptional circumstances to justify variation, that test would be satisfied here.
118. Cabo and Mr Spector accepted that mistakes had been made in its disclosure process, but denied any allegation of dishonesty. Mr McDonald submitted that the inaccuracies in Spector 7 were accidental rather than dishonest, and noted that MGA had also permitted its custodians to undertake manual searches of their phones. He contended that the adjournment costs order should be regarded as a final order, such that exceptional circumstances were required for a variation under CPR r. 3.1(7). He said that the present case fell far short of establishing any such exceptionality, since Cabo's errors were limited, inadvertent and of a quite different scale to MGA's disclosure errors.
120. Mr McDonald also submitted that Cabo's disclosure errors were not causative of the decision of Joanna Smith J, since the impugned paragraphs of Spector 7 concerning Cabo's own disclosure processes were not referred to in either her judgment or the submissions at the 20 July 2022 hearing. Moreover, he said, if the only problem at the time of that hearing had been Cabo's own disclosure defects, it was possible that the trial could have proceeded. In addition, Mr McDonald said that it was not open to MGA to advance allegations of dishonesty in support of an application under CPR r. 3.1(7), on the basis that any allegation of fraud should have been made by way of a separate claim, properly pleaded and particularised.
122. On that fraud point, Ms Wakefield submitted that CPR r. 3.1(7) could be applied to a case where the allegation was one of dishonesty, and that it was not necessary for a separate action in fraud to be brought in such a case. She also noted that Cabo had not (prior to filing its skeleton argument) objected that MGA's application could not be brought under CPR r. 3.1(7), but had permitted the application to proceed to the hearing, including consenting to the cross-examination of Mr Spector which had been sought specifically on the basis that MGA's application included allegations of dishonest conduct on his part. She therefore said that Cabo should have been taken to have waived any objection which it might otherwise have had to a case of dishonesty.
124. Prior to the hearing, I asked counsel to consider the relevance of CPR r. 40.8A as an alternative to CPR r. 3.1(7). They did so with no great enthusiasm. The primary submission of both Ms Wakefield and Mr McDonald was that r. 40.8A did not apply in circumstances where Cabo's defective disclosure exercise had taken place prior to the 20 July 2022 hearing, notwithstanding that the defects were not revealed until after that hearing. If, however, they were wrong on that, Ms Wakefield sought to rely on r. 40.8A in the alternative to r. 3.1(7), and in that event sought permission to amend her application. Mr McDonald's position as to the application of r. 40.8A in the alternative was not entirely clear, but seemed to be that if r. 40.8A did apply, the test of exceptionality should apply in the same way, such that the outcome would be no different.
126. The issues
127. The parties' submissions give rise to the following issues for determination:
129. i) The extent to which there was a failure to comply with Cabo's and SCW's disclosure obligations in relation to the disclosure of WhatsApp messages, and whether Spector 7 gave (in that regard) a dishonest account of Cabo's disclosure process.
130. ii) If and in so far as Spector 7 was dishonest, whether that can be advanced in support of the present application, as opposed to being brought as a separate fraud claim.
131. iii) The scope of CPR r. 3.1(7) and r. 40.8A, and the characterisation of costs orders for these purposes.
132. iv) Whether the correct basis for MGA's application is CPR r. 3.1(7) or r. 40.8A, and (if the latter) whether permission should be given for MGA to rely on r. 40.8A.
133. v) Whether, in the circumstances of the present case, the adjournment costs order should be varied on the basis of either CPR r. 3.1(7) or r. 40.8A.
134. I will address these in turn below.
136. The breaches of Cabo's and SCW's disclosure obligations
137. MGA advanced two main criticisms of Cabo's WhatsApp disclosure process and the evidence given by Mr Spector about that. First, MGA said that the way in which Cabo and its solicitors conducted the disclosure of relevant WhatsApp messages on the Cabo founders' mobile phones was manifestly negligent and amounted to gross misconduct. Accordingly, Cabo's disclosure certificate of 22 October 2021 was also false and misleading. Secondly, MGA made serious criticisms of Spector 7, contending that the account in that statement of Cabo's/SCW's disclosure process was knowingly or recklessly false and misleading, amounting to dishonesty.
139. Cabo's initial disclosure of WhatsApp messages
140. Mr Spector's evidence was that in early December 2020, i.e. seven months before the disclosure order of Recorder Douglas Campbell KC, he asked Mr Michaelson if the Cabo founders used their mobile telephones to communicate about their business, whether by text message or by WhatsApp. Mr Michaelson said that their mobile telephones were mainly used for personal use and not work, but mentioned that there was a long group chat called "Worldeez" which they used to discuss everything related to Cabo. On that basis, Mr Spector considered that it was reasonable for the Cabo founders, themselves, to carry out searches of their mobile phones, rather than providing their phones to SCW or an appropriate disclosure provider to be searched.
142. It is not clear what instructions were given by Mr Spector in respect of that manual search. Those instructions were not set out in writing, nor was there any attendance note of Mr Spector's discussion with Mr Michaelson on this point. The only evidence before the court as to what had been sought came, therefore, from Mr Spector. Spector 17 said that Mr Spector asked for the Cabo founders to search for any material relevant to the list of issues for disclosure. That could not have been the case, because that list of issues was not set until July 2021. Spector 18 therefore corrected this to say that Mr Spector was referring to "the issues that I would have expected to be in the list of issues for disclosure".
144. When cross-examined on this point, Mr Spector's explanation was confused, inconsistent and highly defensive. He initially maintained that he had asked for the Cabo founders to provide "everything" they had on their phones "relating to Worldeez Cabo". Later, however, he gave a slightly different account, saying that he told Mr Michaelson that he expected there to be "issues for disclosure" and then asked him to provide anything that was "relevant". Still later he reverted to saying that "the best approach was not to be too granular about it" and that he had asked for the Cabo founders to provide "anything to do with Worldeez/Cabo". Interspersed with that evidence, Mr Spector accepted that he may have mixed up various different conversations that took place five years ago, and said that he did not recall how he explained the issues to Mr Michaelson.
146. Whatever initial instructions were given, Mr Spector's evidence was that Mr Michaelson reported back that the Cabo founders had only identified the "Worldeez" chat as relevant (or, on one of his accounts, "relevant to the issues that I'd said"), and that any other relevant parts of other chats had been provided by way of screenshots in emails. Mr Spector said that he reasonably believed this and did not see a need to go back and ask for further searches to be conducted, either then, or later in 2021 following the disclosure order.
148. At least part of the reason for the informal approach adopted by Mr Spector was that he had known the Cabo founders for around 19 years through longstanding personal connections, and considered them to be trustworthy and honest individuals. Mr Spector explained that these personal connections underpinned his decision to conduct the mobile phone disclosure process informally, and to liaise with the Cabo founders solely through Mr Michaelson.
150. I agree with MGA that Mr Spector's conduct in this regard fell far short of what was required in order to comply with the disclosure order and SCW's duty (as Cabo's solicitor with conduct of this litigation) to the court under CPR PD 51U ?3.2(2) (now CPR PD 57AD ?3.2(2)) "to take reasonable steps to advise and assist the party to comply with its Disclosure Duties".
152. In the first place, it remains entirely unclear what Mr Spector asked the Cabo founders (via Mr Michaelson) to search for in December 2020. Different versions of those instructions were given to the court in Spector 17, Spector 18, and Mr Spector's oral evidence as described above. I am not persuaded as to the accuracy of any of those versions. It was apparent from Mr Spector's evidence that he had no real recollection of what instructions he had given to Mr Michaelson, and he was seeking to reconstruct what he thought that he might have said. Whatever was said, it is clear that Mr Spector did not properly and comprehensively explain the extent of Cabo's duties of disclosure, nor did he put his request in writing so as to make clear what the Cabo founders were expected to search for.
154. I accept that there is no obligation on a solicitor to search their client's mobile phones themselves, or to require that search to be carried out by a third-party disclosure provider. In principle, therefore, a client may therefore undertake their own searches for relevant materials on their mobile phones. The solicitor must, however, take reasonable steps to advise and assist their client in doing so, and cannot simply leave the task to the client. In particular, the solicitor must provide proper and clear instructions to the client, must ensure that the client fully understands the scope of their duties when searching for relevant material, and must exercise careful supervision over the disclosure exercise: Myers v Elman [1940] AC 282, 322; Matthews and Malek, Disclosure (6 th ed, 2024), ??18-03 and 18-09. The precise nature of the explanations given and supervision required will obviously depend on the circumstances.
156. Mr Michaelson, Mrs Michaelson and Mr Cohen were not lawyers and had no experience of litigation of this nature. Mrs Cohen had previously practised as a solicitor, but her evidence was that she was not involved in the disclosure exercise, and Mr Spector did not suggest that he was relying on her experience in that regard. Mr Spector could not, therefore, reasonably have expected the Cabo founders to carry out a search of their phones without detailed instructions as to how to do so, which should have been put in writing so that there was no doubt about what was required.
158. Nor should Mr Spector have expected the Cabo founders to be able to identify what was relevant to the issues in the case. That should have been a matter for him to assess, having asked for all materials related to Cabo or Worldeez to be provided to him. Mr Spector did at some points in his cross-examination contend that he had asked for anything relating to Cabo/Worldeez to be provided, but I am not convinced by that account. It was noticeably not what he said in his two witness statements (Spector 17 and 18), and is not consistent with what was in fact initially provided to him by Mr Michaelson, in the form of the single "Worldeez" chat and miscellaneous other materials sent as screenshots. It is far more likely that (as suggested in Spector 17 and 18) Mr Spector asked Mr Michaelson to search for materials that were relevant to the issues in the case, but without giving any clear instructions as to what that meant.
160. Secondly, it is clear that Mr Spector did not exercise any supervision over the search process. Indeed, while Mr Spector insisted that Mr Michaelson and Mr Cohen did carry out a search of the mobile phones of all four of the Cabo founders, he admitted in cross-examination that he did not ask how the search had been done. He therefore had no evidence that any real search had been carried out, whether compliant with his instructions (whatever they were) or not.
162. Thirdly, Mr Spector accepted without question the limited material that he was given by Mr Michaelson, in the form of one WhatsApp chat (the "Worldeez" chat) and screenshot fragments of other chats. That was unreasonable and indicated a lack of diligence on his part. At the very least, the fact that Mr Spector was told that there were extracts of other chats that were relevant, and which were provided by way of screenshots, should have put him on notice that a further search should have been made of those other chats.
164. Finally, Mr Spector acknowledged that he did not go back to ask for further searches to be done once the issues for disclosure had been finalised and the disclosure order made by Recorder Douglas Campbell QC in July 2021. Indeed, there was no evidence that he even gave any serious thought to the question of whether there might be further material on the Cabo founders' mobile phones that related to the issues for disclosure. That was manifestly non-compliant with his duties following the making of that order, given the limited material previously provided to him, and the absence of any specific information as to how the search had been conducted by the Cabo founders.
166. Mr McDonald submitted that even if the steps taken by Mr Spector did not represent best practice, this was "merely an oversight". I do not accept that submission. The problem was not that there was an "oversight" by Mr Spector, but that the search of the Cabo founders' mobile phones was carried out, from the start, in entirely the wrong way. A large factor in that was that Mr Spector chose to adopt an informal and casual approach to this part of the disclosure exercise because of his close personal relationships with his clients. That would have been inappropriate in any proceedings; but it was particularly inappropriate in proceedings of this scale. It was also apparent that Mr Spector was not experienced in conducting large disclosure exercises, or indeed litigation of this complexity at all. It is difficult to avoid the conclusion that he was out of his depth, and failed to seek the support that he should have done in order to ensure that both he and Cabo complied with their duties to the court.
168. The consequence of these conclusions is that the information given in Cabo's disclosure certificate of 22 October 2021 regarding Cabo's disclosure was materially inaccurate. Cabo's description of its methodology for capturing documents, in that disclosure certificate, is set out at ?15 above. That included the statement that "there were relevant whatsapp conversations and text messages so a search was undertaken of [the Cabo founders'] mobile phones". In addition, Mr Spector certified that he had undertaken any search in a "responsible and conscientious manner" and in accordance with his obligations under PD 51U and the disclosure order.
170. However, it follows from what I have said above that Mr Spector did not carry out his disclosure obligations in a responsible and conscientious manner, and did not comply with his duties under PD 51U and the disclosure order, in so far as the search of the Cabo founders' mobile phones was concerned. Nor did he have a proper basis for certifying that any search of the mobile phones of the four Cabo founders had in fact been carried out: he did not know what had been done, and apparently did not ask.
172. The evidence given in Spector 7
173. Spector 7 was filed for the purposes of the hearing before Joanna Smith J on 20 July 2022. Although that hearing concerned MGA's disclosure, Spector 7 set out in some detail "the method that the Claimant used for harvesting data from its own custodians by way of comparison". The reason for doing so was to support Cabo's submissions that MGA's disclosure methodology had been so seriously deficient as to warrant an order that the process be repeated afresh with an external e-disclosure provider, and that MGA should pay the costs of the adjournment on the indemnity basis.
175. Mr Spector's description in Spector 7 included the following statements:
177. "The Claimant instructed Anexsys, an independent specialist e-disclosure company based in England to harvest the Claimant's documents. We chose Anexsys because we have used them on a number of occasions for large litigation e-disclosure exercises and we have had successful experiences."
179. "We do not allow clients to undertake their own document capture process. Firstly, this is because clients are unlikely to be certified RelativityOne partners and in any event will not have the same experience that an external provider does, who will be capturing data for law firms on a day-to-day basis. Secondly, I would have a residual concern that a client could be tempted not to carry out the process properly whereas an external provider will be independent and will ensure that records are kept of every process that they undertake."
181. "? we gave Anexsys the contact details of the custodians that the Claimant had identified in its Disclosure Review Document. Anexsys then contacted the custodians and arranged a time with them to remotely access their computers and devices.
183. Anexsys then harvested all the files from the computers and devices of the custodians and uploaded them to the RelativityOne platform that they host. Only once the totality of the documents from each custodian had been uploaded to the platform did Anexsys perform keyword searches and apply date ranges."
184. Mr Spector and Mr McDonald both accepted that this description was inaccurate. While Mr Spector had stated that Anexsys had been used "to harvest the Claimant's documents", and that Anexsys had harvested files "from the computers and devices of the custodians", that was not the case for any of the materials on the Cabo founders' mobile phones. Contrary to Mr Spector's assertion that SCW did not allow clients to carry out their own document capture process, that was in fact precisely what he had permitted in the case of the Cabo founders' mobile phones.
186. Mr Spector accepted that the methodology described in Spector 7 gave the incorrect impression that it related to all electronic disclosure, and he also accepted that the use of the word "devices" when describing what Anexsys had searched was a "poor use of language", for which he apologised. His explanation was that when describing the work undertaken by Anexsys and SCW's approach to document capture, he was focusing on the collection of Cabo's emails, because the problem with MGA's disclosure which had led to the adjournment of the trial concerned MGA's collection of emails by its in-house IT team. He said that he was not focusing on the collection of other documents for disclosure, such as materials held on mobile phones, and he genuinely did not recall at the time of drafting Spector 7 that the search of the Cabo founders' mobile phones had been conducted manually by the Cabo founders themselves.
188. Mr Spector vehemently denied that he had deliberately misled the court regarding Cabo's disclosure process. When cross-examined on this point, his response was heated and emotional, repeating that all he had in his mind at the time of his statement was the process for collection of Cabo's emails, and that he had no reason to seek to mislead the court.
190. Ms Wakefield in her closing submissions invited the court to reject Mr Spector's account that he had simply forgotten the collection of Cabo's mobile phone data when drafting Spector 7, submitting that there was an obvious financial incentive (in terms of the costs burden) for Mr Spector to mislead the court as to Cabo's own approach to disclosure. She went on to describe Mr Spector's approach to witness evidence in general as "habitually false", changing at every iteration, and invariably seeking to put forward a position that was to the benefit of himself, his clients or the funder.
192. Those were strong submissions, not lightly made, and reflecting the real grievance felt by MGA in relation to Cabo's conduct. I do not, however, accept that Mr Spector either knowingly sought to mislead the court, or made the statements that he did in Spector 7 without caring if they were true or false, such as to establish recklessness (see e.g. 4VW v Spence [2024] EWHC 2434 (Comm), ?34). It is clear that Mr Spector was, in Spector 7, seeking to paint a virtuous picture of Cabo's disclosure process that would stand in contrast to the way in which MGA had originally undertaken its collection of emails. In doing so, Mr Spector evidently sought to benefit his client in the costs order that was made consequent upon the adjournment of the trial. Nonetheless, it seems very improbable that his motivation to achieve that outcome would have led him to misstate the position either knowingly or recklessly.
194. Rather, I consider the most probable explanation to be that Mr Spector was, as he said, focused on the issue of email disclosure when drafting Spector 7. Mr McDonald candidly acknowledged that Mr Spector had "struggled with the demands of a case of this nature and scale", and had limited experience of dealing with disclosure exercises of this kind. It is apparent from what Mr Spector said that he was (as I have noted above) out of his depth, and did not have sufficient support from other more experienced litigators. It is also quite evident that Mr Spector is not someone who expresses himself with great precision. In those circumstances the likely explanation for the inaccuracies in Spector 7 is that Mr Spector did not reflect sufficiently carefully on the language used, and forgot about the way in which Cabo's mobile phone disclosure had been conducted.
196. My conclusion is therefore that Spector 7 was prepared without the care and diligence that would have been expected of a statement of this nature. I do not, however, consider that Mr Spector either knowingly or recklessly misled the court. In light of that conclusion the question of whether a case of dishonesty can properly be pursued in the present application does not arise.
198. CPR r. 3.1(7) and r. 40.8A: the law
199. CPR provisions
200. CPR Part 3 is entitled "The Court's Case and Costs Management Powers". Within that Part, r. 3.1 appears in a section entitled "Case Management", and the rule bears the heading "The court's general powers of management". Rule 3.1(7) provides, specifically:
202. "A power of the court under these Rules to make an order includes a power to vary or revoke the order".
203. CPR Part 40 deals with "Judgments, Orders, Sale of Land etc". Within that Part, r. 40.8A appears in a section entitled "Judgments and Orders", and the rule bears the heading "Stay of execution and other relief". It provides:
205. "Without prejudice to rule 83.7(1) [concerning writs of control and warrants], a party against whom a judgment has been given or an order made may apply to the court for ?
207. (a) a stay of execution of the judgment or order; or
208. (b) any other relief,
210. on the ground of matters which have occurred since the date of the judgment or order; and the court may be order grant such relief, and on such terms, as it thinks just."
211. The Court of Appeal explained at ??83?4 of its recent judgment in Motorola v Hytera [2025] EWCA Civ 1667 (discussed further below) that CPR r. 40.8A is the modern equivalent of the former Order XLIII (27) of the Rules of the Supreme Court 1883, which provided a replacement for the erstwhile procedure of a writ of audit? querel? defendentis (literally, "the complaint of the defendant having been heard") in the following terms:
213. "No proceeding of audit? querel? shall hereafter be used; but any party against whom a judgment has been given may apply to the Court or a judge for a stay of execution or other relief against such judgment, upon the grounds of facts which have arisen too late to be pleaded; and the Court or judge may give such relief and upon such terms as may be just."
214. The scope of CPR r. 3.1(7) and r. 40.8A
215. The parties identified only one authority which addresses the question of whether an application to revoke an order of the court should be made under CPR r. 3.1(7) or r. 40.8A, namely the Court of Appeal's judgment in Motorola. In that case the court considered two appeals, the second of which was an appeal against a decision to revoke a judgment in the Commercial Court, enforcing a US court judgment which had itself subsequently been overturned on appeal. Although the deputy judge at first instance had revoked the domestic judgment relying on CPR r. 3.1(7), on appeal it was eventually common ground that the more appropriate power to do so was contained in CPR r. 40.8A. The court therefore allowed the appeal and remade the decision, concluding that the appropriate order was to stay the domestic judgment and give the parties liberty to apply to revoke it once Motorola's entitlements under the US judgments were clear.
217. In reaching that conclusion, the court surveyed the authorities on CPR r. 3.1(7), and considered in particular Roult v NW Strategic Health Authority [2009] EWCA Civ 444, [2010] 1 WLR 487; Tibbles v SIG [2012] EWCA Civ 518, [2012] 1 WLR 2591; Terry v BCS [2018] EWCA Civ 2422; and Vodafone v IPCOM [2023] EWCA Civ 113, [2023] RPC 10. It also referred to AIC v Federal Airports Authority of Nigeria [2022] UKSC 16, [2022] 1 WLR 3223, concerning the circumstances in which an order may be reconsidered before it is sealed. The court noted the rather limited previous consideration of CPR r. 40.8A.
219. In the present case, the parties cited most of the same authorities, as well as West African Gas Pipeline v Willbros Global Holdings [2012] EWHC 396 (TCC), (2012) 141 ConLR 151; Madison CF (t/a 118118 Money) v Various [2018] EWHC 2786 (Ch); and Sangha v Amicus Finance (in administration) [2020] EWHC 1074 (Ch).
221. For the purposes of the present case, and specifically the question of the application of CPR r. 3.1(7) and r. 40.8A, I derive the following propositions from the authorities set out above:
223. i) CPR r. 3.1(7) is a case management power, although it is not on its terms confined to procedural orders. It may therefore, in principle, apply to a non-procedural order, including a final order "disposing of the case, whether in whole or in part": Roult?15. The circumstances in which it will be appropriate to vary or revoke a final order under r. 3.1(7) will, however, be very rare. The fact that the provision has been the subject of "very limited" extensions beyond the case management situations for which it was intended does not mean that it can or should be taken to be of general application to final orders: Vodafone??35 and 54; Motorola??111, 115, 117.
224. ii) Leaving aside case management directions, which may need variation to reflect the development of the proceedings, and for which a more liberal approach may be appropriate (Roult?15; West African Gas Pipeline?72), the circumstances in which CPR r. 3.1(7) can be relied on to vary or revoke a procedural order or other interim order normally require either a change of circumstances since the order was made, or a misstatement of the facts on which the original decision was made: Roult?15; Tibbles?39(ii); Terry?75. The factors to take into account will be a matter for the discretion of the judge in the circumstances of the individual case, but something out of the ordinary is generally required: Tibbles?39(vii).
225. iii) The interests of justice in the finality of a court's orders means that the circumstances in which it will be appropriate to vary or set aside a final order under CPR r. 3.1(7) will be even more rare, and confined to exceptional cases: Terry?78; Madison?46; Sangha?35; Motorola?111.
226. iv) CPR r. 3.1(7) should, in particular, only be applied to final orders where no other power exists to allow the court to achieve the overriding objective of dealing with the case justly: Motorola?115. It should therefore not be used to circumvent the application of an alternative specific procedure for the matter in question, such as an application to set aside or vary a default judgment under CPR Part 13, or an application to reopen an appeal under CPR r. 52.30: Terry?80; Vodafone?45.
227. v) Likewise, CPR r. 3.1(7) should not normally be used to revoke a final order where CPR r. 40.8A is applicable, since r. 40.8A is specifically intended to be used where matters have occurred since the date of a judgment or order. Where that provision is applicable, that is the power under which any application to revoke should be made: Motorola, ??113?114.
228. vi) The principle of "finality" is not binary. Rather, the weight to be given to the principle will vary, depending on the nature of the order already made, the type of hearing at the end of which it was made, and the type of proceedings in which it was made. The importance of finality is likely to be at its highest in relation to orders made at the end of a full trial, or other orders which end the proceedings. Case management and interim orders lie towards the other end of the scale: AIC?35.
229. I will return below to the question of the scope of application of r. 40.8A, and what is meant by "matters which have occurred since the date of the judgment or order".
231. Final costs orders
232. The parties' submissions in the present case raise the question of whether for the purposes of CPR r. 3.1(7) (and/or r. 40.8A) a costs order is to be regarded as a final order, where it is made in respect of an interlocutory decision such as a case management decision, rather than in respect of a decision that finally disposes of all or part of the underlying case.
234. Ms Wakefield submitted that the classification of a costs order as interim or final depends on the issue to which it relates. An application under CPR r. 3.1(7) to revoke or vary a costs order made in respect of an interim or procedural decision should therefore (she said) not be regarded as a final order, but should be treated in the same way as an application to revoke or vary the underlying decision of the court.
236. Mr McDonald disagreed, and submitted that costs orders are in principle final orders, since they finally determine the costs liability between the parties as regards the issue to which they relate. That is the case (he said) whether the issue is an interim or procedural issue, or a final substantive issue such as the final determination of the proceedings.
238. In Tibbles (at ?44) and West African Gas Pipeline (at ?72) it appears to have been assumed that costs orders relating to interim or procedural issues could in principle be revoked or varied under CPR r. 3.1(7), on the basis of material misstatement or a change of circumstances. In Latimer v Ellingham [2006] EWHC 3663 (Ch), [2007] 1 WLR 2569, ?30, the court also applied that test to a costs order made at the end of the proceedings.
240. None of those cases, however, addressed the particular considerations which have been discussed in the more recent line of case-law from Terry and Vodafone onwards, concerning the exceptionality of the application of CPR r. 3.1(7) to final orders. Nor (a fortiori) was the court in any of the earlier cases asked to grapple with the question of whether costs orders should be characterised as interim/procedural as opposed to final for the purposes of r. 3.1(7).
242. That specific question was, however, raised in Wright v McCormack [2022] EWHC 3343 (KB), which addressed (among other things) an application under CPR r. 3.1(7) to set aside earlier costs orders made in the proceedings. Chamberlain J held at ??62 and 63 that costs orders made in respect of interlocutory matters are final orders for these purposes:
244. "? orders containing case management directions often also contain final provisions as to the costs of particular applications. The Knowles Order is an example. The liberty to apply is at paragraph 23, but paragraphs 16?23 all appear under the heading 'Directions to trial'. It makes sense that these directions should have been subject to a liberty to apply. The costs orders appear under a separate heading 'Costs'. They are in the nature of final orders, which could have been appealed at the time and could still be appealed now (though an extension of time would be required).
246. The caution urged by the Supreme Court in AIC therefore applies to this case. The Dagnall and Knowles Orders carry the 'deadweight' of the finality principle. To justify overturning them, a very compelling case would have to be shown. The courts have generally been unwilling to interfere with final costs orders on interlocutory issues on the basis that the facts established at trial are different from understood when the orders were made."
247. More recently still, in K v E [2023] EWHC 1244 (Fam), [2024] 1 WLR 1819, the court considered an application to revoke or vary a costs order made under FPR r. 4.1(6), which is in exactly the same terms as CPR r. 3.1(7). Cobb J drew on the case-law considering r. 3.1(7), and the approach adopted by Mostyn J in In re F (A Child) (Return Order: Power to Revoke) [2014] EWHC 1780 (Fam), [2014] 1 WLR 4375 (which in turn cited Roult) to reach the conclusion that FPR r. 4.1(6) did give the court the power to vary or revoke a final order, albeit that he noted that this point had not been addressed in great detail by the counsel at the hearing.
249. As to the applicable test, Cobb J considered that the court's discretion under FPR r. 4.1(6) was only likely to be exercised where there had been fraud, a material change of circumstances since the order was made, a misstatement of the facts on which the original decision was based, or a manifest mistake on the part of the judge in formulating the order. He also observed that the discretion was likely to be "more sparingly exercised" in relation to a final order as opposed to a procedural, interlocutory, injunctive or case management order (?39). At ?48 he took the view that a costs order was a final order for these purposes. His conclusion was that there was not a sufficient change in circumstances to warrant the variation or revocation of the costs order in that case.
251. Ms Wakefield relied on K v E in support of her position on the analysis of a costs order. It is, however, difficult to see how that authority assists her case. Although the line of cases from Terry and Vodafone onwards and Wright v McCormack do not appear to have been cited to the court in K v E, the approach adopted by the judge to the application of FPR r. 4.1(6) was consistent with both the authorities on the application of CPR r. 3.1(7) to final orders, summarised above, and Chamberlain J's conclusion that a costs order should be characterised as a final order for these purposes.
253. Ultimately, Mr McDonald submitted that Chamberlain J was right to draw a distinction between a final costs order and a case management decision, and to treat a costs order as in the nature of a final order for the purposes of CPR 3.1(7), while Ms Wakefield contended that Chamberlain J's approach was wrong and that I should not follow it.
255. I consider that the analysis of Chamberlain J was correct. An order providing for costs in the case or costs reserved is obviously not a final costs order. But a costs order which provides for one party to pay another party costs in relation to a specific issue, whether or not the specific amount of the costs is then assessed, is not either interim or procedural. Rather, it embodies a final decision on the liability to pay costs, which may be a very substantial liability ? in this case leading to a payment on account of ?578,444.17. That is the case whether the order arises from a case management or other interim or procedural decision, or a final substantive decision. In either case the costs liability is finally determined, and that finality is not diminished by the fact that the decision which gave rise to that liability may have been, in the context of the case, an interim or procedural decision.
257. Whether CPR r. 3.1(7) or r. 40.8A is applicable in the present case
258. It follows from the discussion above that the adjournment costs order is to be treated as a final order. Motorola makes clear that CPR r. 3.1(7) should not be used as the basis for an application to revoke or vary a final order where r. 40.8A is applicable. CPR r. 40.8A applies to applications for relief on the ground of "matters which have occurred since the date of the judgment or order". As noted above, this is effectively the successor to a provision permitting a stay of execution or other relief on grounds of facts "which have arisen too late to be pleaded".
260. In the present case, MGA's application was brought on the basis of Cabo's own disclosure failings, and the inaccurate account of Cabo's disclosure given to the court at the 20 July 2022 hearing, in Spector 7. Had the true picture been discovered before the July 2022 hearing, MGA said that would inevitably have changed both the arguments before Joanna Smith J and the outcome of that hearing, because it would then have been evident that the trial would have needed to be adjourned on the basis of Cabo's disclosure breaches as well as those of MGA.
262. Ms Wakefield initially contended that CPR r. 40.8A was inapplicable because Cabo's disclosure breaches occurred in the course of 2020 and 2021, and therefore before the July 2022 hearing, albeit that they were not discovered until after the hearing. I am unpersuaded by that analysis. CPR r. 40.8A refers to "matters which have occurred" since the disputed judgment or order. The "matter which occurred" since the date of the adjournment costs order was the discovery that Cabo had failed to disclose extensive materials that were highly relevant to the issues in the proceedings. The fact that the disclosure exercise had taken place in 2020 and 2021 does not change the fact that the real basis of MGA's application is the discovery of defects in that exercise, which were not revealed until almost a year after the July 2022 hearing. That was quite clearly a matter which (in the words of the precursor to CPR r. 40.8) arose too late to be pleaded, and thus too late to be taken into account at the July 2022 hearing.
264. CPR r. 40.8A does not indicate any exclusion for matters which have "occurred" following a course of events which commenced prior to the judgment or order. Nor would there be any logical basis for such an exclusion. Taking the Motorola example of the domestic enforcement of a foreign judgment that has subsequently been set aside on appeal, it would be very odd if an application for revocation or variation of the domestic judgment could be made under r. 40.8A (as the Court of Appeal found) where the appellate foreign judgment was delivered after the domestic enforcing judgment had been handed down, but could not be brought under that provision if the appellate judgment had been handed down one day before the domestic application for enforcement, but was for whatever reason unknown to the parties at that time and thus only discovered later.
266. A similar analogy might be an order for delivery up of a Picasso painting following a dispute as to its ownership. If the painting was then stolen the day after the order was made, such that compliance with the order became impossible, that would evidently fall within CPR r. 40.8A. There is no coherent basis for a different result if the theft occurred the day before the order but was not discovered until afterwards. In both situations, the relevant matter only became known after the order was made.
268. When I put these examples to Ms Wakefield in the course of her argument, she accepted that the distinction she sought to draw was rather arbitrary, and that it was at least arguable that CPR r. 40.8A should apply to a matter that was discovered after the relevant order, but was the result of a chain of events triggered before the order was made. If that was the correct analysis, she accepted that CPR r. 40.8A should apply in the present case. Mr McDonald did not address this point in his submissions.
270. In my judgment, in so far as MGA relies on the inaccuracy of the evidence in Spector 7 as a separate and distinct basis for variation of the adjournment costs order, that was not a matter that "occurred" since the date of the order. CPR r. 3.1(7) is therefore a proper basis for that aspect of MGA's application. The central basis of MGA's application is not, however, Spector 7 as such, but the discovery after the July 2022 hearing of the omissions from Cabo's disclosure of extensive materials relevant to the proceedings. That was a matter that occurred after the order, and MGA's application in that regard should therefore in principle have referred to CPR r. 40.8A rather than CPR r. 3.1(7). No doubt the application was not made on that basis because the Motorola judgment of the Court of Appeal, which clarified the interaction between CPR rr. 3.1(7) and 40.8A, was not handed down until December 2025, only a month before the hearing of this application.
272. In any event, however, I do not consider that the basis of the application makes a material difference to the assessment of the substance of the application, for the reasons set out below. Furthermore, for the same reasons, it is not necessary to address the question of whether permission should be granted to MGA to amend its application to rely on CPR r. 40.8A.
274. Substantive application of CPR r. 3.1(7) and/or r. 40.8A
275. For an application under CPR r. 3.1(7), as set out above, any variation of a final order will only be granted in exceptional circumstances. If, instead, CPR r. 40.8A is the basis for the application, the Motorola judgment suggests that relief might be granted for reasons that are not necessarily exceptional (given that the court noted in terms, at ?115, that there was nothing rare, unusual or exceptional about foreign judgments being reversed on appeal). Nevertheless, the exercise of the court's discretion under that provision will still need to have regard to the importance of finality.
277. While finality is not a binary concept (see ?78(vi) above) the adjournment costs order in the present case provided for a very substantial costs liability, following a reserved judgment delivered after a day of submissions. In that context, the question is whether the factors favouring re-opening of the order are in combination sufficient to overcome the "deadweight" of the finality principle (AIC??37 and 39).
279. MGA's application (as noted above) relies both on the fact of Cabo's own disclosure failings, and on the inaccuracy of the evidence given in Spector 7. Dealing first with the evidence given in Spector 7, there is no dispute that this was materially inaccurate in that it misstated Cabo's disclosure process, albeit that I have found that it was not dishonest. There is also no dispute that the evidence in Spector 7 was before the court at the July 2022 hearing, and was considered by the judge for the purposes of that hearing. In a broad sense, therefore, Spector 7 can be described as part of the factual basis on which the decision of Joanna Smith J was made. But that evidence was not the specific basis of the judgment of Joanna Smith J. Her judgment focused entirely on the conduct of MGA and made no reference to Mr Spector's evidence as to Cabo's disclosure process.
281. In those circumstances the errors in Spector 7 do not, in my judgment, warrant the variation of the adjournment costs order. The order was made on the basis that MGA's disclosure breach required the trial to be adjourned. Mr Spector's misstatement of Cabo's own disclosure process did not change the fact that MGA's conduct was such as to necessitate an adjournment. This was not, therefore, a case where the misstatement undermined the basis on which the order was made. In those circumstances the situation cannot, in my view, be described as one that it is sufficiently exceptional to justify the variation of a final order under CPR r. 3.1(7) (which, as discussed above, is the applicable provision in so far as MGA relies separately on Spector 7).
283. That leaves the general question of Cabo's disclosure failings which are, as I have noted, the central basis on which MGA's application is brought. In that regard, there is little doubt that if at the time of the 20 July 2022 hearing the court had known what is now known about the volume and relevance of the WhatsApp messages not disclosed by Cabo, the adjournment costs order would likely have been different. The situation then would have been that both parties were in material default of their disclosure obligations, with the default of each being sufficient reason to adjourn the trial.
285. I do not accept Mr Spector's claims, and Mr McDonald's submissions, that Cabo's disclosure failings would not themselves have necessitated an adjournment, had the extent and relevance of those failings then been known. It is entirely unrealistic to think that the trial could have proceeded if it had been known, just three weeks before the trial, that Cabo had failed to disclose highly relevant materials of the volume eventually provided by way of further disclosure in August and November 2023. The timetable in the weeks leading to trial was already intensively occupied, as Mr Spector had himself observed in Spector 6, in support of Cabo's application to vacate the trial. It is, moreover, in any event inconceivable that in the short period remaining before the trial there would have been not only the time for Cabo to disclose the relevant material, but also sufficient time thereafter for MGA to review the materials disclosed and consider the impact of those materials on the factual and expert evidence.
287. That does not, however, mean that the adjournment costs order should now be varied, under either CPR r. 3.1(7) or r. 40.8A. There are many situations in which deficiencies in a party's disclosure or evidence will require remedial steps during the course of proceedings. Many of those situations will involve a representation made that the disclosure or evidence is complete, when in fact it is not. The court will inevitably address such issues as and when they arise, and will consider their prospective impact on the future management of the case. The case management decisions taken in such cases may also result in orders for one or other party to pay costs, depending on the situation.
289. What the court cannot sensibly do, however, is to revisit and unpick earlier final costs orders simply on the basis that, with hindsight, different orders would or might have been made. Such an exercise would be highly speculative: it will often be impossible to determine with any confidence what decision might have been taken had the factual position then been known to be different. More importantly, however, such an approach would be unworkable, because it would open the door to repeated and piecemeal revisions of earlier final costs orders in the light of subsequent developments in the case.
291. The present case illustrates that difficulty. What initially emerged in June 2023 was that Cabo had failed to carry out its WhatsApp disclosure exercise properly, and it was therefore being redone by Anexsys. That alone would not have provided grounds to vary the adjournment costs order, since the extent of the missing material might have been minimal. MGA's argument therefore depends on the court's knowledge of the scale and significance of Cabo's further disclosure, as revealed when Cabo eventually (in August and November 2023) disclosed all of the omitted WhatsApp chats. Indeed, MGA goes further, and relies on the use of that material at the trial, as well as the assessment of that material in the trial judgment. It would, however, be a recipe for chaos if costs orders consequent upon case management decisions could routinely be revisited at different stages of the proceedings, or following the trial judgment, on the basis that subsequent events painted a different picture than was available to the court when the original decisions were made.
293. There is therefore an important difference between a turn of events which destroys the entire basis on which an order is made (as in Motorola) or which renders it impossible to comply with that order (the stolen Picasso), and a case such as the present where the disputed order remains, on its own terms, soundly justified and properly enforceable, but where the court would or might have adopted a different course if it had had the benefit of information that came to light later in the proceedings. I would hesitate to say that the latter situation should never justify variation of a final order, under either CPR r. 3.1(7) or r. 40.8A. But I consider that it is likely to be only a very compelling case that would warrant disturbing a final order on that basis.
295. The present case is not, in my judgment, sufficiently compelling. As I have observed above, in complex litigation it is commonplace, during the preparation for trial, for deficiencies in disclosure to emerge on both sides at different times. Those deficiencies will frequently lead to consequential costs orders. Likewise, although the adjournment of a trial for case-management reasons is neither routine nor desirable, it is far from extraordinary. The particular features of this case, while perhaps unusual in certain respects, therefore fall squarely within the range of case-management issues that typically arise in complex proceedings of this kind. The mere fact that a different order would or might have been made if the sequence of events had been different does not, therefore, provide a basis for revising the costs order made by Joanna Smith J, which was amply justified on the material before her.
297. Conclusions
298. For the reasons set out above, I have reached the following conclusions:
300. i) The manner in which Mr Spector conducted and supervised the disclosure of material from the mobile phones of the Cabo custodians was seriously deficient, and the description of Cabo's disclosure process in Spector 7 was inaccurate and misleading. I have not, however, found that Spector 7 was in that regard dishonest, since the facts do not, in my judgment, establish that Mr Spector either knowingly or recklessly misled the court.
301. ii) I therefore reject MGA's allegation that the adjournment costs order should be set aside on the basis of fraud. Accordingly, it is not necessary to determine whether that allegation can, as a matter of procedure, be advanced in the present application.
302. iii) CPR r. 3.1(7) should not normally be used to revoke a final order where CPR r. 40.8A is applicable; and a costs order which provides for one party to pay another party costs is to be regarded as final order for these purposes.
303. iv) In so far as MGA relies on the inaccuracy of Spector 7 as a separate basis for its application, CPR r. 3.1(7) is the proper basis for that application. The central basis for MGA's application is, however, the discovery of Cabo's own disclosure failings after the July 2022 hearing, and in that regard its application should have been made under CPR r. 40.8A.
304. v) Ultimately, however, whichever of those provisions is applicable, I do not consider that the circumstances of the present case justify variation of the adjournment costs order.
305. MGA's application for a variation of the adjournment costs order and repayment of the payment on account is therefore dismissed. It is, however, common ground that Cabo should pay MGA's costs arising out of Cabo's breaches of the disclosure order and other late disclosure.

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