Saudi Arabian Airlines Corporation v Sprite Aviation No.6 DAC [2025] EWHC 1663 (Comm)

[2025] EWHC 1663 (Comm)

Claim No. CL-2022-000384

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

COMMERCIAL COURT (KBD)

Venue The Rolls Building, 7 Rolls Buildings, Fetter Lane

Date Friday, 27th June 2025

London EC4A 1NL

Before

HIS HONOUR JUDGE MARK PELLING KC

(sitting as a Judge of the High Court)

Between

SAUDI ARABIAN AIRLINES CORPORATIONClaimant

SPRITE AVIATION NO.6 DACDefendant

MR. TOM STEWART COATS (instructed by Norton Rose Fulbright LLP) appeared for Claimant.

MS. ERIN HITCHENS (instructed by Stephenson Harwood LLP) appeared for Defendant.

Approved Judgment

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[1]This is the determination of an informal application, made by the defendant, for various ancillary orders to be made as part and parcel of the extension of time for the parties to exchange disclosure certificates and exchange extended disclosure lists. Earlier today I extended the time for such exchanges to 8th August 2025, remarking, when granting the application, that there was, as a result of knock-on extensions of time for subsequent steps, a gap between about 20th February and the date of the start of the trial, in which no activity, as yet, is expected.

[2]The defendant expresses grave concerns about the failure of the claimant to inform the court or the defendant about the difficulties posed by the Kingdom of Saudi Arabia’s data protection laws at the time the original directions were given even though they had been in force for some months at that stage, by its failure to inform the defendant of the difficulties that were being faced at the time they were being faced, and the apparently late stage in the proceedings at which the claimant, in fact, took the requisite steps to institute the disclosure process, which will result in the exchange of the documents to which I referred a moment ago on 8th August 2025.

[3]The points which were originally taken by or on behalf of the defendant were, essentially, the following: firstly, there was a complaint, based upon the contents of the fourth witness statement of Mr. Springthorpe, the solicitor who acts for the claimant, as to the role which the claimant's solicitors would play in the disclosure exercise, with the concern being expressed that as that witness statement was drawn, it suggested that the disclosure process would be managed by the claimant without realistic intervention on the part of the solicitors. The other concern that was articulated by the defendant was that there had been a series of delays in complying with the disclosure obligation, which, taken together, ought to lead me to have real concerns about the ability or willingness of the claimant to give disclosure in accordance with the directions as extended. These concerns were exacerbated by the claimant providing information extremely late in the day in Springthorpe 4, and then, most recently, Springthorpe 5.

[4]The second of these two substantive points needs to be put into context. The original direction was for disclosure in March of this year, later extended by consent to 18th April, but not as a final or definitive extension but as an interim extension while negotiations continued for a longer extension, which, in the result, did not result in an agreed extended date. It was that which led to the issue of the present application.

[5]So far as the later provision of information is concerned, the defendant draws attention to the fact that within part C of the application notice for the restoration of this CMC, there is no mention of the difficulties which are, in fact, the cause of the problem, which is difficulty in complying with Saudi data protection law, in order to obtain disclosure. The complaint in relation to the fourth witness statement of Mr. Springthorpe focuses on paragraph 18, which says:

"Saudia has a legitimate interest in undertaking the disclosure exercise to comply with English law obligations and court proceedings. However, as part of the Balancing Test, Saudia must only process personal data that is necessary to meet this legitimate interest and take measures to avoid harm to the relevant individuals concerned. In practice, this emphasises the Data Minimisation principle and, in practice, requires Saudia to undertake the initial filter/cull of the dataset prior to making any disclosure."

It was this paragraph which gave rise to the complaint by the defendants that the solicitors acting for the claimant were not going to be appropriately involved in the disclosure exercise and led to an application being made, informally in the course of the written submissions on behalf of the defendant in answer to this application, for an order that the claimant's solicitors must conduct all reviews of the claimant's data for disclosure purposes, including its proposed initial filter, by either the claimant sending to its solicitor all of the necessary data, or, two, the claimant's solicitor visiting the claimant to review the data and taking the data into possession.

[6]The defendant’s concern about this issue appears to have been the result of a misreading or misunderstanding, albeit an understandable misunderstanding, given the way in which paragraph 18 of Springthorpe 4 is formulated, as to precisely how the disclosure exercise was going to be conducted. In fact, as the fifth statement of Mr. Springthorpe makes clear, the exercise is going to be carried out in an entirely conventional way. In essence, per paragraph 11 of the fifth witness statement: "The third party e-disclosure representative's flights and hotel accommodation have now been confirmed. The representative is due to travel to Saudi Arabia from 28th June to 5th July 2025. "12. A call took place on 26th June between representatives of the claimant's solicitors, Saudia and the e-disclosure representative to confirm the logistics of data collection as follows: "(a) A meeting has been scheduled for this Sunday, 29th June, at Saudia's office in Saudi Arabia to start the data collection. Saudia's cybersecurity team will provide the e-disclosure representative access to all of the custodian's data and Saudia will have no further involvement in the process. Saudia has specifically confirmed they will not supervise the e-disclosure representative, they are only present to hand over the custodian data to the e-disclosure representative ... "(d) The e-disclosure representative will apply the search terms that have been agreed between the parties and will update the claimant's solicitors as to(i) the volume of total data, and

(ii) the volume of data after running the search terms. NRF will decide in the usual way whether the number of responsive documents is proportionate for the purposes of the review. "(e) Once the search terms have been applied, the documents will be exported to the e-disclosure representative's hard drive. The e-disclosure representative advised that this will involve several hours of machine time. The hard drive will be encrypted and then transported back to the UK on Saturday, 5th July. "13. Once the e-disclosure representative has returned the data to the UK, they will transfer it to NRF's eDiscovery platform. The e-disclosure representative anticipates that will take a day or two ... As soon as the volume of data is known, the claimant's solicitors will be able to assess how many first-level reviewers will be required and will use this week to brief the first-level reviewers and set them up on the review platform." (Quote unchecked; document not provided to shorthand writers) The effect of this evidence, as was accepted entirely correctly on behalf of the defendant, eliminates any legitimate concerns there are that this disclosure process is going to be conducted in anything other than an entirely conventional way. In those circumstances, I am satisfied that it would be entirely wrong to include the proposed paragraph 4, and I think that was accepted at an early stage on behalf of the defendant.

[7]The other concerns that arise relate very largely to a concern on the part of the defendant that at the CMC, before Henshaw J, it was anticipated that there would be specific disclosure applications, and the result of the extension of time in which to exchange disclosure certificates and extended disclosure lists of documents, has been that the window of opportunity for making such applications, without having a knock-on effect on other steps that have to be taken in the litigation, has become a relatively small one, with witness statements due on 17th October, and the experts' initial reports due on 12th December.

[8]In those circumstances, it is suggested on behalf of the defendant that I should do two things: first of all, I should grant the extension, but on unless terms, that is that in the event that the claimant fails to comply, then the claim will be struck out with no further order. The second thing which has been sought is a rather Draconian set of directions, novel in my experience outside extreme non-compliance situations, requiring the claimant's solicitors to report on a repeated basis to the defendant's solicitors what steps are being taken in relation to the furtherance of the disclosure process.

[9]In my judgment, this was, in part, premised on the assertion that there had been a number of missed deadlines. In fact, the only missed deadline was the one at the end of March, and the 18th April extension was interim only, with the result that one, or perhaps two, deadlines (one of which was never intended to be a final deadline) had been missed, and the application for an extension by restoring the CMC was made in time.

[10]In those circumstances, in my judgment, it would be wrong to impose upon the claimant's solicitors the very Draconian obligations contemplated by the defendant's draft proposals. That said, I accept there are reasonable grounds for concern about the shrinking window in to make any specific disclosure applications. With that in mind, I invited counsel for the claimant to offer me an undertaking, on behalf of his solicitors, to inform the defendant's solicitors, in writing, within one working day, of them becoming aware either that the deadline would not or may not be met, by which I mean the deadline of 8th August 2025.

[11]This is an undertaking which will ensure that if there is to be any further erosion in the window of opportunity for making specific disclosure applications, it will be drawn to the attention of the defendant's solicitors as soon as reasonably can be expected. With that in place, a lot of the legitimate grounds for concern are eradicated. It would be entirely inappropriate to impose an unless order, and certainly an unless order of the sort identified by the defendant at this stage. The principles that apply to the imposition of such orders are well established, with the leading authority still, I think, being Michael Wilson & Partners v Emmott, a decision of field J (as he then was), in which it was emphasised that default orders are orders of last resort that should be resorted to only if other case management techniques have been tried and failed. In my judgment, structuring the extension in the way I have, and embodying within it a recital referring to the fact that the order has been made on the basis of the evidence contained in the fifth witness statement of Mr. Springthorpe, and recording the undertaking to which I have referred, strikes the right balance at this stage in dealing with the delay that has occurred in relation to the disclosure exercise.

[12]In those circumstances, subject to the giving of the undertaking, which I understand is offered, and the inclusion of the recital along the lines I have just indicated, the further relief sought by the defendant in relation to disclosure is refused. [Further Argument]

[13]The issue I now have to determine, unsurprisingly, is the costs of and occasioned by the claimant's application for extensions of time to the case management timetable, so as to accommodate for its purposes an extension of the time for providing disclosure documentation. In the result, the application succeeded, but subject to the giving of an undertaking to report future compliance with the order.

[14]In those circumstances, the defendant submits it should have the costs of and occasioned by the application, because the application was necessary because of a failure by the claimant, because the evidence in support of the application did not fully and frankly explain what the problem was, and because the evidence filed in support only sought to answer the points made in correspondence concerning disclosure made on behalf of the defendant at a very late stage, with the filing of Mr. Springthorpe's fifth statement coming only some time earlier today. In those circumstances, it is said that there should be an order that the costs of today should be paid in any event by the claimant, and those costs should be assessed on the indemnity basis.

[15]The claimant's position in relation to this is that the costs should be costs in the case, that the application was a relatively straightforward one and whilst it is accepted that there needed to be a hearing, because the progress monitoring date was effected by the extensions being sought, it was entirely in excess of what was proportionate for the defendant to resist the application in the way it has been resisted, because there was plenty of time in the timetable to accommodate the extension, and because it is by no means unusual for disclosure difficulties to arise which require extensions.

[16]The test for whether or not costs should be ordered to be paid on the indemnity basis is the well-known Excelsior test that neither counsel referred to, but which requires, if indemnity costs are to be ordered, that the party seeking costs on the indemnity basis identify the way or ways in which it is alleged that the paying party acted outside the norm to be expected in relation to commercial litigation. In fact, the points relied upon as apparently justifying an order for costs to be assessed on the indemnity basis are those factors I have identified; that is to say, the failure to comply with the original order, the failure to identify the real problem in the evidence filed originally in support, the failure to address problems concerning the way in which the disclosure exercise was to be carried out, other than in the ambiguous way it was described in Springthorpe 4, and the failure until the filing of Springthorpe 5 to file evidence which addressed that issue and also set out reasons why the extension sought by the claimant would be sufficient to enable things to be done.

[17]In my judgment, none of these factors either individually or collectively justify imposing a costs order that costs be assessed on the indemnity basis. If every case in which an in-time application for an extension of time had to be made attracted an indemnity costs order, then it would be virtually unknown for standard orders in costs to be made on such applications. Furthermore, the absence of information, whilst no doubt aggravating, and whilst no doubt making it marginally more difficult for the defendant to answer the application, is nonetheless not something that justifies imposing the entirely exceptional remedy of ordering costs to be assessed on the indemnity basis.

[18]The next point is whether or not there should be a costs order at all. So far as that is concerned, the points which are made are that this was an application for an extension of time, which had to be made by the claimant because if it did not then it would fall into breach of the directions which had previously been given, and the application costs had been rather higher than would otherwise have been the case, in the sense that work has been undertaken that would have been avoided had the explanations given, latterly only in Springthorpe 5, been provided at a much earlier stage, with the claimant being frank as to the difficulty created, for example, by Saudi data protection laws.

[19]This is a finely balanced question, because this is a debate about disclosure in circumstances where its impact on the costs of the proceedings generally will be very limited. However, all of that said, I am satisfied that this is an application which could have been avoided by the claimant, by either complying with the order as previously made or seeking an extension on a full and frank basis from the outset as to why such an extension was necessary.

[20]In those circumstances, I consider that there should be an order for costs in favour of the defendant, but those costs are to be assessed on the standard not the indemnity basis. [Further Argument]

[21]This is the summary assessment of the defendant's costs of and occasioned by the application that I determined on its merits a few moments ago.

[22]I have directed that the defendant recover the costs of and occasioned by the application to be assessed on the standard basis. The grand total claimed for this hearing is over £75,000. The tests that I have to apply in relation to this exercise are well established. The receiving party is entitled to receive costs only in respect of work that it was reasonable and proportionate to carry out, and in relation to such work it is only entitled to recover only such sum as is reasonable and proportionate in amount.

[23]So far as the latter issue is concerned, there are two points to be borne in mind throughout in an application of this sort. The first is the well-established dictum of Leggatt J (as he then was) in Kazakhstan Kagazy Plc v Zhunus

[2015] EWHC 404 (Comm)

, that in the context of commercial litigation what is proportionate is the minimum sum required in order for a proper job to be done in relation to the application in issue, or the trial. Further, and insofar as hourly rates are concerned, being the rates which are used to calculate the sums recovered by solicitors for time expended, the starting point are the guideline rates published on the direction of the Master of the Rolls annually. Following Samsung Electronics Co. Ltd v. LG Display Co. Ltd

[2022] EWCA Civ 466

, whilst the guideline rates are a starting point, nonetheless, if costs in excess of the guideline rate are to be recovered, then their recoverability must be justified very clearly on reasonableness and proportionality grounds.

[24]The rates which have been claimed in this case are for two grade A fee earners in the range of between £744 and £760 an hour, for grade C fee earner £432 an hour and for the grade D fee earner £252 an hour. This compares and contrasts with the grade A rates for London 1, currently £566, and for London 2, £413. For grade C, £299 or £269 an hour and for grade D either £205 or £153 per hour. There is no coherent reason why the guideline rate should be departed from that has been identified, much less one which is justified on reasonableness and proportionality grounds. It is said this is an aviation case and merits the attention of aviation lawyers. With great respect, that is not the test which has to be applied when considering the costs of a particular application of this sort, which is a straightforward application for an extension of time in which to provide disclosure documents.

[25]In those circumstances, the real issue is whether it should be London 1 or London 2 rates that should apply in relation to this application. With the greatest of hesitation, I am prepared to adopt the London 1 rather than the London 2 rate, but I do so, as I say, with a great deal of hesitation, because the issues that arose on this application are common to pretty well any application for an extension of time in a disclosure process, and bears precious little relation to the specifically aviation nature of the case. In the end, I am persuaded that London 1 is appropriate, essentially because of the size of the claim.

[26]The next issue which arises concerns hours expended. I am prepared to accept the submission made on behalf of the defendant that attendances on the defendant were, at least in part, generated by changes of position in relation to the application by the claimant, or at any rate a failure by the claimant to indicate the whole of its case in its initial evidence. That said, the notion that there should be five hours recovered by the grade C fee earner in addition to the 1.7 hours of the grade A fee earner strikes me as in excess of what is reasonable and proportionate, and I reduce that to three hours. I leave the telephone attendances unaffected.

[27]As far as attendances on opponents are concerned, they are what they are, and I believe those to be reasonable and proportionate, having regard to the difficulties surrounding the development of the issues that arose.

[28]As far as attendances on counsel are concerned, in my judgment those are in excess of what is reasonable and proportionate. I allow the grade A fee earner's attendance as asked. I grant the B fee earner, who is also an A grade fee earner as well. I am prepared to allow the D fee earners, because they will have carried out a supporting role for the grade A fee earners, but I disallow 3.7 hours claimed for the grade C fee earner.

[29]As far as the telephone attendances are concerned, I allow in the same way as I have allowed for letters out and e-mails, that is to say to disallow the C fee earner but allow all the others as asked.

[30]As far as the attendance at the hearing is concerned, there is absolutely no justification, particularly on an application of this sort, for three solicitors to have attended this hearing. I allow the grade A fee earner, having regard for the potential importance of the application. I disallow the attendance of the D and C fee earners.

[31]As far as travel and weighting is concerned, 50 minutes are claimed for that, which I anticipate will be the cost of the solicitors' travelling to counsel's chambers while this hearing was taking place. In my judgment, that is neither reasonable nor proportionate. Where hearings are taking place remotely, then solicitors should be joining remotely, and if instructions have to be given to counsel in the course of the hearing, then the entirely conventional route of dealing by WhatsApp communication should and can reasonably and proportionately be adopted, particularly in a case of this sort. The travelling and weighting costs are disallowed.

[32]The next issue that arises concerns the involvement of counsel. The first point that arises is that there is a sum of some £12,245 included as being fees paid for advice, conference and documents to Mr. Edward Cumming KC. So far as that is concerned, of course if the defendants require the Rolls-Royce service of being represented by leading counsel on an application for an extension of time, that is a matter for them. However, it is neither reasonable nor proportionate that leading counsel should be involved in that exercise and I disallow those costs in their entirety.

[33]So far as the remaining fees for counsel are concerned, I allow the claim of £1,600 for advice, conference and documents made by junior counsel. I have significant difficulty with £8,000 as being both reasonable and proportionate in relation to an application of this sort, but I did not understand that to be seriously challenged and it is fair to say that there would have been rather more work to be done by counsel in relation to this application, by reason, in particular, of the late delivery of material information by the claimant, which would justify a rather higher fee than might otherwise be justified.

[34]So far as a costs lawyer fee is concerned, that is £1625. It is entirely unclear to me what that could be attributable to, other than the costs schedule that I am now considering. £1625 for the cost of preparing a relatively simple costs schedule in relation to an application which, apart from the issues I have had to determine concerning costs, lasted about an hour and a half, is, in my judgment, in excess of what is reasonable and proportionate. I allow that at the rate of £1200.

[35]So far as work on documents is concerned, item 1, I am prepared to accept is reasonable and proportionate in terms of hours expended. Considering the application notice and order made by the claimant involves a total of nearly nine hours. So far as that is concerned, that is in excess of what is reasonable and proportionate. I accept that one of the grade A fee earners should have carried out that exercise. I allow the grade A fee-earner rate that is claimed for that. I allow a similar period of time, so far as the grade C fee earner is concerned, and otherwise disallow what is being claimed. I allow item 3 on the basis that it is modest, reasonable and proportionate and had to be dealt with.

[36]So far as item 4 is concerned, I have significantly more difficulty in relation to it than with any of the others. This involves 13.5 hours of preparation by the grade D fee earner, 19.3 hours for the grade C fee earner and a further nearly eight hours by the grade A fee earner, for an application where no evidence has been filed on behalf of the defendant, and the defendant has been represented by a very experienced counsel. This item is said to be engaged in preparing for the reconvened CMC, including instructing counsel regarding skeletons and reviewing the draft skeleton, making amendments to it, and finalising and considering arrangements for the transcript to be taken and reviewing the hearing bundle. None of that justifies on reasonable and proportionality grounds, the figures that have been claimed.

[37]In my judgment, the grade A fee earner is fully entitled to recover 2.5 hours of time of that exercise, and I am prepared to accept that because some bundling would be involved it would be appropriate for the grade D fee earners to incur up to 13.3 hours in preparing the various bundles. What I am not prepared to accept is that the grade C fee earner should be recovering 19 hours for the same exercise. The role of the grade C fee earner might have been to liaise to a degree with the grade A fee earner and provide some supervision to the grade D fee earner in relation to the preparation of the bundle, but overall, I allow, in relation to the grade C fee earner, three hours.

[38]So far as in engaging in the final preparation for the CMC, post-filing the statement of costs and dealing with the matter post-hearing, another eight hours in total has been claimed. That is in excess of what is reasonable. I am prepared to allow the two hours for which the grade A fee earner seeks. I am prepared to accept that there may be some ministerial work in connection with all of that, and I am prepared to allow the grade C fee earner a tote of four hours in relation to that, but if there is to be four hours of grade C time for this exercise, then two hours of grade D fee time as well is duplication and I disallow that.

[39]With those adjustments, I so assess the costs. - - - - - - - - - - - -