Astex Therapeutics Ltd v Astrazeneca AB
| Jurisdiction | England & Wales |
| Judge | Chief Master Marsh |
| Judgment Date | 08 November 2016 |
| Neutral Citation | [2016] EWHC 2759 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC-2015-004768 |
| Date | 08 November 2016 |
[2016] EWHC 2759 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building, Fetter Lane
London EC4Y 1NL
Chief Master Marsh
Case No: HC-2015-004768
Charles Béar QC and Josephine Davies (instructed by Olswang LLP) for the Claimant
James Mellor QC and James Whyte (instructed by Marks & Clerk Solicitors LLP) for the Defendant
Hearing dates: 26 September 2016
This judgment concerns an application made by the Claimant ("Astex") inter alia seeking an order against the Defendant ("AZ") that it should provide a full list of each document over which AZ has asserted a claim to privilege in the course of disclosure.
The claim
This claim arises out of an agreement made between Astex and AZ in February 2003 ("the Collaboration Agreement") under which they agreed to participate in a collaborative research programme to discover novel chemical leads for the treatment of Alzheimer's Disease and to develop those leads. The leads were to be active as selective inhibitors of the Target, defined as the beta-site amyloid precursor protein cleaving enzyme or "BACE". The object of the Collaboration Agreement was to produce Candidate Drugs (also referred to as "CDs").
The Collaboration Term ended on 20 April 2005 (the end date was confirmed by a contractual amendment effective from 1 August 2009). No Candidate Drugs had been nominated by the end of the Collaboration Term.
After the end of the Collaboration Term, AZ continued its work to develop a BACE inhibitor for Alzheimer's disease and until February 2014 AZ provided Astex with regular updates on the project. By September 2010 AZ had nominated "CD1" as a Candidate Drug and in September 2010 and July 2011 AZ made payments to Astex of US$1 million under the Collaboration Agreement. However, CD1 failed to meet certain safety criteria and was not pursued further. "CD2" was nominated by AZ as a Candidate Drug by 17 April 2012. CD2 proved to be more promising than CD1 and in 2014 AZ entered an alliance with Eli Lilly jointly to develop and commercialise it.
The core issue in the claim is whether CD1 and/or CD2, on a true construction of the Collaboration Agreement, are Candidate Drugs. There was a common assumption by both parties over a period of several years that both CD1 and CD2 met the relevant criteria to be Candidate Drugs. However, in February 2015, as a consequence of a review undertaken by AZ, a different approach was adopted. Astex was informed that the review had taken place, and that AZ no longer considered either CD1 or CD2 to be within the scope of the agreement, by an email from Conor Johnston, Chief Counsel of AZ Neuroscience, dated 24 February 2015. The position was confirmed later in a letter dated 13 May 2015 and at an open meeting between the parties on 3 June 2015. The February email was marked "without prejudice" but there is no dispute that it is either not subject to without prejudice privilege or such privilege has been waived.
AZ's position was explained in the letter dated 13 May 2015, when it said:
"We have held discussions with both current and former AZ scientists both who worked on and/or are still working on the BACE project and have reviewed many internal documents and AZ's internal compound database. We have also reviewed the terms of both agreements carefully. As part of the review, we have been unable to find any basis that would support any suggestion that the two compounds in question are covered by the agreements between AZ and Astex."
AZ's position in relation to its change of position is pleaded in paragraph 54 of the Defence (in response to paragraph 25 of the Particulars of Claim). It was the subject of a Part 18 request made by Astex seeking the identification of each current and former AZ scientist with whom AZ had discussions and provision of a summary of such discussions. AZ's initial response was that it was unwilling to provide the information sought "… because it is either privileged or, to the extent relevant, will be the subject of AZ's fact evidence, to be exchanged later in these proceedings". Astex also asked AZ to identify the documents reviewed as a part of the exercise and the request was met with a similar response. An order was made on 14 March 2016 requiring AZ to provide a more detailed answer and on 11 April 2016 AZ provided a list of the scientists who had been spoken to as part of the review and a summary of the documents which had been reviewed. Those documents have since been disclosed.
One of the features of this claim is that the vast majority of the documents the subject of disclosure are under AZ's control. Issues relating to disclosure have involved substantial hearings on 14 March, 18 April, 17 May, 6 July and 1 September 2016 and, more recently, the hearing which is the subject of this judgment. The initial difficulty with disclosure arose from a lack of engagement between the parties. The order dated 14 March 2016 included a requirement that the parties must meet to seek to establish the scope of differences between them concerning the scope of disclosure so that the court might resolve any such differences which the parties could not agree. That order, and the subsequent order made on 18 April 2016, provided for AZ's disclosure to take place in two stages, with stage 1 to include documents from four scientific databases identified by AZ and the documents arising from the internal review. Stage 2 disclosure was to take place itself in stages, with searches against priority custodians having been identified as the starting point for the substantial disclosure exercise. The disclosure process has been much delayed, but the bulk of disclosure should have been completed by 14 October 2016. The trial, which has a time estimate of three weeks plus two days pre-reading is listed in a window commencing on 2 May 2017.
A claim to privilege was first raised by the AZ in response to the initial Part 18 request. Requests 4 and 5 relate to AZ's review and I concluded that the initial response, under which AZ declined to supply the review documents, was inadequate. On 19 April 2016 I handed down a judgment giving reasons for requiring AZ to provide answers to some of the Part 18 requests in a more detailed fashion. So far as requests 4 and 5 are concerned, I remarked:
"20. … to my mind it is plainly insufficient for the Defendant to state in bald terms that information and/or documents are privileged without condescending to give any explanation about the type of privilege which is relied upon and how it is said to arise."
This remark echoed a observation made by leading Counsel appearing for AZ on 14 March 2016:
"… if we assert privilege then we need to do so precisely and in a definite manner and it needs to be determined."
AZ's list of documents, comprising stage 1 disclosure, refers to a search for documents which were the subject of the AZ internal review and the disclosure statement was signed by Mr Conor Johnston on behalf of AZ. It provides confirmation that AZ's solicitors had reviewed the documents which were the subject of that search for the purposes of assessing privilege. Part B of the list of documents served by AZ, dealing with a claim to withhold inspection, is in the following form:
" Part B: The Defendant has control of the documents numbered and listed below, but objects to the Claimant inspecting them because they are by their nature privileged from production.
Confidential letters and other communications passing between the Defendant and its legal advisors and patent attorneys for the purposes of giving or obtaining legal advice and assistance, together with drafts and internal memoranda and notes thereof prepared for the purposes of giving or obtaining legal advice, and any other documents which are by their nature privileged and excluded from inspection." [my emphasis]
The claim to withhold inspection must be seen in the context of the relevant provisions of CPR Part 31:
i) CPR 31.3
"(1) A party to whom a document has been disclosed has a right to inspect that document except where –
…
(b) the party disclosing the document has a right or duty to withhold inspection of it; …"
(Rule 31.19 sets out the procedure for claiming a right or duty to withhold inspection.)
ii) CPR 31.19 (so far as relevant) provides:
"(3) A person who wishes to claim that he has a right or a duty to withhold inspection of a document, or part of a document, must state in writing –
(a) that he has a right or duty; and
(b) the grounds on which he claims that right or duty.
(4) The statement referred to in paragraph (3) must be made –
(a) in the list in which the document is disclosed; or
(b) if there is no list, to the person wishing to inspect the document."
(5) A party may apply to the court to decide whether a claim made under paragraph (3) should be upheld."
The format of AZ's list of documents does not precisely follow the layout of Practice Form N265 (the form is based upon the provisions of CPR 31.19) and requires the party objecting to inspection to list the documents which are withheld and then to explain the basis for refusing to permit inspection. Astex objected to the form of the disclosure statement, and the claim for privilege, and on 7 June 2016 asked AZ's solicitors to provide a list of all documents in which AZ claims privilege "… in order to facilitate a determination of whether these documents should be disclosed".
On 15 June 2016 AZ's solicitors replied saying:
"Our client has complied with its standard disclosure obligations and does not need to provide any list of privileged documents for your client's consideration. Our client understands the rules of privilege and it can assess this without your client's assistance. Our client has used standard...
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