Pretrial discovery in Web Summit disputes ‘dragging on’, says judge

A High Court judge has expressed concern that the pretrial discovery process in Web Summit co-founder disputes has been “dragging on for some time”.

Mr Justice Denis McDonald urged lawyers for the parties to meet in person for “meaningful engagement” to resolve issues surrounding the disclosure of documentation.

Correspondence exchanged over some time suggests a “different approach needs to be taken” to bring about finality to the discovery process, he said, adding that he was “dismayed” by the current situation.

The judge made the comments as he extended time for the parties to issue motions concerning discovery.

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Kelley Smith, senior counsel for Web Summit co-founder and minority shareholder Daire Hickey and his commercial vehicle Lazvisax Ltd, earlier said her legal team has raised “fundamental questions” about Web Summit’s approach to discovery.

There has been a “distinct lack of urgency” by the Web Summit parties in dealing with “very serious concerns raised in relation to deficiencies around discovery”, she said. Her side’s dissatisfaction extended to what she described as Web Summit’s “erroneous” claims of privilege over certain documents which, she said, are now accepted were not correct.

Barrister Frank Kennedy, for David Kelly (another co-founder and minority shareholder) and his company Graiguearidda, said he had similar concerns to those expressed by Ms Smith.

Representing Web Summit’s holding company Manders Terrace Ltd, as well as its chief executive Patrick Cosgrave and his entity Proto Roto Ltd, Bernard Dunleavy SC said the opposing parties have been “talking across each other” to a degree.

All agreed they were not able to meet deadlines indicated by the court last month for bringing motions concerning document discovery. It will not be possible to issue any motions this week, he said, adding that the parties have agreed to extend this deadline until September.

Several steps have to occur in the meantime, he said, noting his team has received several questions that seem to “stray outside the ambit” of discovery ordered by another High Court judge in July 2022.

Mr Dunleavy said he hopes the parties can engage constructively to narrow the issues between them as his clients are “anxious” to see the case progress to trial.

Manders Terrace has alleged in proceedings, taken in Ireland and California, that Mr Kelly breached his duty to the company by attempting to secretly use Web Summit’s resources to set up an investment fund for his own personal gain.

Graiguearidda owns Mr Kelly’s 12 per cent stake in Manders Terrace and is suing that firm, Mr Cosgrave and Mr Cosgrave’s Proto Roto, which owns 81 per cent of Manders Terrace shares, alleging oppression of shareholder rights.

Mr Hickey’s Lazvisax – a 7 per cent shareholder in the tech conference firm, also has separate shareholder oppression proceedings against Manders Terrace, Mr Cosgrave and Proto Roto.

Mr Kelly and Mr Hickey have also each brought separate personal proceedings against Mr Cosgrave and Manders Terrace claiming there has been a breach of an alleged profit share agreement since 2013.

The claims in all of the actions are denied.