Claims that Web Summit has been substantially damaged by Paddy Cosgrave’s social media posts about Israel will be met “robustly”, the High Court has heard.
The former chief executive of the technology events company, who quit his role after controversy erupted over his online posts in the aftermath of Hamas’s attack on Israel, did not object to the new allegations being added to cases alleging minority shareholder oppression against him and the firm.
The new claims, made separately by Mr Cosgrave’s co-founders Daire Hickey and David Kelly through their Web Summit shareholding entities, are not admitted and will be met robustly at trial, senior counsel Bernard Dunleavy, for Web Summit holding company Manders Terrace and Mr Cosgrave, said.
However, the court ruled against Mr Dunleavy’s clients, who opposed Mr Hickey and Mr Kelly’s request to “reserve the right” to seek further documentation about speakers and clients who reacted to Mr Cosgrave’s posts following Hamas’s October 7th assault on Israel, in which it killed more than 1,000 people and kidnapped some 240.
The minority shareholders also want to be able to request records outlining the potential impact Mr Cosgrave’s online activities had on Web Summit’s value.
After a short but tense hearing of submissions from lawyers for the three sides, Ms Justice Eileen Roberts decided all the new matters should be admitted to the case. She said she was satisfied this does not cause any prejudice to the Web Summit side.
The new subject matters relate directly to general issues already pleaded in the alleged shareholder oppression cases, she said. As the new allegations concern activities from October 2023 on, she said it was “simply not possible” for related documentation to have been sought before then.
The fact that the exchange of documents between the parties has taken so long already “cannot be used” by Mr Cosgrave and Web Summit to block further discovery on new matters that have only since arisen, she said.
The amendments may lead to Mr Kelly and Mr Hickey requiring further documents from Mr Cosgrave and Web Summit, and this should not be used as a springboard for a further wide-ranging discovery request, she added.
There was no objection from Mr Hickey to new claims being added to Mr Cosgrave and Manders Terrace’s defence of his action, including that Mr Hickey earned €328,000 for “secret” consultancy work while still a director at Web Summit.
Ms Justice Roberts said she hopes the parties can agree a timetable for the next steps in advance of the matters returning to court on January 12th.
Earlier, Mr Dunleavy, instructed by Clark Hill law firm, argued the discovery rights reservation should not be permitted as it would engender “logistical prejudice” given “considerable time” has been spent swapping documents to this point.
He expressed concern about the “breadth of discovery that is coming down the tracks, or at least the prospect of discovery”, if the judge accedes to the other sides’ requests.
“We are content to meet these allegations, but we want to have the discovery over and behind us and to get on with the trial,” he added.
Kelley Smith SC, instructed by Dentons solicitors, for Mr Hickey and his vehicle Lazvisax, which holds his 7 per cent share in Web Summit, said she was “quite taken aback” by her opponent’s characterisation of the document sharing process to date which, she said, has been dragged out by the other side’s insufficient and belated discovery, which is ongoing.
Her client, as the applicant, is “always trying to move on with these proceedings”.
For Mr Kelly and Graigueridda (his entity holding his 12 per cent stake in Web Summit), Frank Kennedy, adopted Ms Smith’s submissions, while adding that the “potential universe” of documents connected with the new claims is “extremely confined”, as they relate only to events from October 2023.
Mr Kennedy, instructed by Dillon Eustace, said the objection to this is a “complete misuse” of the court’s resources and time.
The judge was satisfied she should allow all of the amendments to be added to the cases, which are among several suits and countersuits involving the three Web Summit co-founders.
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