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Phones4U collusion trial racks up £106 million in legal costs

Staff Reporter
December 26, 2023

Administrators launch battle to slash networks’ lEGAL COSTS

The administrators of Phones4U face a staggering legal bill of £77.2 million from the networks they sued in addition to their own costs of around £29 million.

This arises from Phones4U’s unsuccessful four-month trial during its administration, where they claimed all the mobile networks colluded to push Phones4U into bankruptcy. The failure to prove this was set out in a 750-word judgment.

Vodafone has submitted the highest legal bill, seeking £22,778,754. EE is asking for £16,208,078, Deutsche Telekom for £10,524,003, Orange for £11,891,000, O2 for £7,898,173, and Telefonica for £7,937,286.

However, Phones4U in Administration’s lawyers are are challenging the networks’ legal bills, arguing they deserve only a fraction due to criticisms of their conduct noted in Mr. Justice Roth’s judgment, which they plan to appeal.

In a hearting on December 19 on on costs, Phones4U’s counsel, led by Kenneth MacLean KC, argued that EE should recover only 70 per cent of its costs due to criticisms of its legal distance, leading to additional expenses.

Vodafone should receive only 80 per cent due to the judge’s critique of its witnesses’ evidence, which was said to have resulted in unnecessary time and costs.

Counsel stated:

The Judge was also critical of Vodafone’s conduct towards P4u, describing its conduct in “deliberately misleading a long-term commercial partner”, as “distasteful or even disreputable”, and that the Partner of Choice presentation in particular was a “subterfuge”: Vodafone’s conduct in this period, and its evidence seeking to justify that conduct, that was roundly rejected, should be sanctioned in costs.

Vodafone failed to preserve potentially relevant documents”

They also cited relevant documents being mislaid.

Vodafone failed to preserve potentially relevant documents in the form of Mr (Jeroen) Hoencamp’s notebooks. Although this loss was found not to have been deliberate, it came after Mr Hoencamp had been instructed to preserve documents, he “clearly should not have thrown them away”, and the Judge found that the loss was “unfortunate and one will never know whether those notebooks would contain anything relevant regarding various critical meetings which Mr Hoencamp attended”:

Former Vodafone UK CEO Jeroen Hoencamp: “failed to preserve potentially relevant documents”.

Mr MacLean also contended that O2 should receive only 50 per cent of its costs, largely due to the judge’s criticisms of then O2 CEO Ronan Dunne’s clandestine meeting with EE’s Olaf Swantee at The Landmark, which was interpreted as an attempt to collude.

Ronan Dunne (top) and Olaf Swantee: held a clandestine meeting at The Landmark Hotel in which Phones4U was discussed

The networks insist on their full costs, setting the stage for a detailed examination of claims and counterclaims.


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