In re Michael Wilson & Partners, Ltd.

The case of the day is In re Michael Wilson & Partners, Ltd. (D. Colo. 2012). It’s a § 1782 case, but the case doesn’t involve the merits of the application for judicial assistance or a motion to quash. Instead, it involves an award of the reasonable costs of complying with the discovery request. I don’t review the details of the legal analysis on how the judge arrived at a reasonable cost figure. Instead, I just want to note the numbers, which are wicked scary, as we say in New England.

Back in 2006, Michael Wilson & Partners, a British Virgin Islands company providing consultancy services in Kazakhstan among other places in Eastern Europe and Asia, applied for leave to serve subpoenas on Sokol Holdings, Inc., Frontier Mining, Ltd., and their principals, Thomas Sinclair and Brian C. Savage, both Australians. According to Wilson, its former director, John Forster Emmott, an Englishman, and its former employees, Robert Colin Nicholls and David Ross Slater, had wrongfully deprived Wilson of corporate opportunities by doing business with Sokol and Frontier, and Sokol, Frontier, and their principals were likely to have information relevant to Wilson’s claims against Emmott, Nicholls, and Slater, which were pending before the High Court in England and the Supreme Court of New South Wales. The judge granted the ex parte application, and after much further wrangling, Sokol, Frontier, et al. produced documents responsive to the subpoenas and provided testimony under FRCP 30(b)(6). In 2011—nearly five years after Wilson’s application—Sokol, Frontier, et al. moved for reimbursement of costs and fees incurred in responding to the subpoenas. In total, they sought $2.15 million, of which nearly $1.6 million was costs and approximately $550,000 was fees. There were 325,000 documents reviewed and 15,000 ultimately produced. Here is how some of the major costs broke down: 1

Fee to KPMG, which “set up the searchable document database,” plus the attorney’s fees incurred in negotiating a reduction of KPMG’s bill $506,307
Cost of contract attorneys and paralegals to review the documents $989,131
Attorneys’ fees in the § 1782 action $20,078
Attorneys’ fees in briefing KPMG $20,861
Attorneys’ fees in “devising and negotiating search terms” $25,579
Attorneys’ fees for “dealing with KPMG anomalies” $182,024
Attorneys’ fees for initial review and advice on the subpoena $25,684
Attorneys’ fees for preparing the response to the subpoena $27,623
Attorneys’ fees on “set up, data capture, and to inform and instruct the review team” $169,542

This seems, ahem, pricey, and it’s not just me saying it: Sokol, Frontier, et al. sued their lawyers in the Delaware Superior Court for overbilling on the matter, asserting that the reasonable cost should have been $571,187. Just to put things in context, spending $2.15 million to review 325,000 documents and produce 15,000 documents is spending about $6.60 per document reviewed and $143.33 per document produced.

As I said, I’m not going to delve into the details on the ruling on the merits. I just want to highlight the costs of complying with US document discovery and the importance for clients to have probing discussions with their lawyers about the costs of reviewing documents, methods of increasing efficiency and decreasing costs, and the like. For our part, lawyers need to be up on the technologies that are available to reduce the crushing costs of document review. Clients need to be aware of the issues and to push their lawyers to justify their doc review strategy choices.

Notes:

  1. The figures don’t add up to the totals suggested above; I’ve excluded some miscellaneous expenses.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

10 thoughts on “In re Michael Wilson & Partners, Ltd.

  1. Hi Ted,

    Have you any other information regarding David Ross Slater. I have heard that he is living in London somewhere.
    Have read the court proceedings over the years and have tried to make sense of them (as much as a person without any legal background can).
    Do you have any up to date information on whether he and the others in the case appealed or not.
    He chooses to be elusive, and has done for 12 years or more.
    As his only sibling I would appreciate any news on my brother.
    Many thanks,
    Claire

      1. Many thanks Ted,

        I will always live in hope of an eventual reuniting with my brother. Recently on an overseas trip I felt like putting a “Desperately Seeking Susan” add in one of the London papers but thought better of it. One cannot push and shove and make things happen that perhaps are not meant too. He knows that if he wishes to contact me that it would not be hard, I am still in the family home and his niece is now 16yo. My door will always be open for him and my love for my brother will be forever. It would be lovely to know though if he is well, is happy and perhaps even a Dad?

        Once again many thanks Ted,

        Claire

        1. Hi Claire,

          I don’t know if this is the same guy, but we’re renting a house in Ainslie, Canberra, and trying to track down the owner, who is listed in the lease as a David Ross Slater. Do you suppose this could be the same person? The agent did tell me he was living in London. If so, the agent (Leonie Bassett at McGrath Real Estate, Dickson) may have his contact details. It may be just a strange coincidence, but I hope this may help you … Also, if you’ve found out anything since we would like to know too! (To put in an offer for the house, nothing more.)

          Best

          Deborah Apthorp

          1. Hi Deborah,
            Yes, that would be my brother. He lived in Canberra quite a time back and now is living somewhere in London.
            Have not found out anything further but will try to make contact with the Real Estate agent that you have listed.
            Life is way too short and I would love to have him back in our lives again. Sometimes it’s just little snippets of information that keep ones hopes up!!!
            Many thanks,
            Claire Goldby

  2. In the High Court of Justice, Queen’s Bench Division, Commercial Court before Mr Justice Andrew Smith 10th August.

    Justice is finally done, Michael Wilson and Michael Wilson and Partners found guilty of contempt of court.

    Michael Wilson and Partners fined £300,000 and Michael Wilson sentenced to prison.

    Justice after 9 years has finally caught up with this lowlife Wilson, pity it took 9 years.

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