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3 fails in court bid to uncover evidence of alleged collusion

Requests not specific enough

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Mobile phone network 3 has been refused permission to force its rivals to disclose emails and documents in a process that would have cost each of them £200,000. The High Court ruled that 3's requests were not specific enough.

The network is engaged in a legal battle to prove that O2, Orange, T-Mobile and Vodafone colluded to slow down improvements to the system which allows consumers to switch networks. It wanted access to years' worth of documents and emails to boost its case, but the High Court said that its claims fell out with the rules governing pre-action disclosure.

3 claims that the four other mobile operators are behaving anti-competitively by blocking or slowing the progress of change in the rules governing subscriber switching from one network to another. 3 is a later market entrant than the others and is almost totally dependent for its business on convincing subscribers to switch to it.

The mobile number portability (MNP) system is the process by which a phone user moves their number and account from one network to another. In the UK it is a particularly cumbersome and lengthy process, taking up to a week.

The case put forward by 3 is that the four networks were keen to change and speed up the system until it entered the market in 2004, at which point they tried to block change order to protect their market share.

"[3] needed to win most of its customer base from the Respondents who made up the vast proportion of the existing market," explained the ruling. "For that purpose the delays in the donor-led process and the consequent window of opportunity for "win-back" activity (often focussed on the "best" customers) presented a serious impediment."

The networks collaborate on cross-industry issues via the Operator Steering Group (OSG). 3 submitted a substantial list of documents which it wants access to before taking its main action.

"The [list] runs to eight pages for each of the Respondents with very few specific documents identified: the vast bulk are groups or classes of documents," said the ruling. "The phrase vast bulk is appropriate. The scope of the application, even from the Applicant's perception, is something equivalent to the entirety of the potential scale of overall disclosure in respect of the anticipated issues. It covers the period from 1999 to 2006. It encompasses both electronic and hard copy documents. It is not challenged that the cost to each Respondent would be in the order of £200,000."

Civil procedure rules state that 3 is not entitled to ask for any more documents than would be disclosed as part of Standard Disclosure in any subsequent legal action. Judge David Steel found that 3's requests went beyond that.

"In general the scale of the disclosure sought is well beyond any probable scope of standard disclosure," he wrote. "The request is so lacking in specificity that it is not possible to accept that the entirety of the classes of documents are 'likely' or 'may well' fall within standard disclosure."

"As already noted, the request runs to eight pages covering an overall period of seven years. It contains numerous categories within which something like 80 classes of documents are identified without any limitation whatsoever on the documents, correspondence, reports, notes or communications referred to and without any regard to the potential limitations in the search as provided in [the civil procedure rules]," he wrote.

Pre-action disclosure is allowed when it could solve a problem and avoid subsequent court cases, but Steel said that any disclosure now is extremely unlikely to halt the litigation process.

"It was not seriously suggested that the proceedings were likely to settle in the light of the disclosure. The mere speculative hope of production of a 'smoking gun' cannot be sufficient to trigger the desirability of the exercise," he said.

"The disclosure will achieve little in resolving the difficult legal issues on both liability and quantum that are likely to arise," wrote Steel. "The potential costs for amendment and supplementary disclosure are likely to pale into insignificance compared with the cost of the exercise being proposed by the Applicant. The cost-benefit analysis favours the Respondents."

The application for disclosure was refused.

Copyright © 2008, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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