Bristol-Myers Squibb Company v Baker Norton Pharmaceuticals Inc. and Another (Costs)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ALDOUS,LORD JUSTICE LAWS,MR JUSTICE BLACKBURNE |
| Judgment Date | 28 March 2001 |
| Neutral Citation | [2001] EWCA Civ 414 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2001/6001 |
| Date | 28 March 2001 |
[2001] EWCA Civ 414
Lord Justice Aldous
Lord Justice Lawsmr Justice Blackburne
Case No: A3/2001/6001
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
Mr JUSTICE JACOB
Royal Courts of Justice
Strand, London, WC2A 2LL
Justin Turner (instructed by Simmons & Simmons for the Appellants)
Henry Whittle (instructed by Bird & Bird and Roiter Zucker for the Respondents/Applicants)
This application arises from the order made by this Court on 23rd May 2000. The appeal was by Bristol Myers Squibb Company who were the patentees of EP (UK) 0584001. The respondents to that appeal were the defendants, Baker Norton Pharmaceuticals Inc and Napro Biotherapeutics Inc.
In the proceedings Bristol Myers alleged that the patent had been infringed by the defendants. The defendants denied infringement and contended that the patent was invalid. The judge held the patent invalid and made an appropriate order. This application revolves around his order for costs which was in these terms:
"3. that the Plaintiff/Respondent shall pay the First Defendant's costs of the action and counterclaim and shall pay the Second Defendant's costs of the Petition and action and counterclaim, such costs to be taxed if not agreed, save that from 6th February 1998:
(i) the First and Second Defendants shall each be entitled to their separate costs:
(a) of and relating to the preparation of their expert evidence
(b) of and relating to the preparation of pleadings (including responses to requests for admissions) correspondence and discovery relating to the issue of infringement.
(ii) otherwise, the First and Second Defendants shall recover only the one set of costs between them, to be taxed as if only one firm of solicitors were acting for both parties and the parties were represented by one leading and one junior counsel, and how that one set of costs is split between the First and Second Defendants is a matter for them."
In essence the judge ordered that Bristol Myers should pay both defendants' costs up to 6th February 1998 and thereafter, subject to an exception, they should be limited to one set of costs. The effect of that order was that each of the defendants would be able to recover part of their total costs which for the purposes of this appeal can be estimated at about 70% of their total costs, subject to detailed assessment. It also meant that interest on the amount assessed to be due became payable from the date of the judge's judgment.
The judge gave Bristol Myers permission to appeal and the defendants leave to cross-appeal against his order for costs.
Both Bristol Myers and the defendants took advantage of that permission. In the judgments of this Court ( [2001] RPC 1), this Court affirmed the conclusion of the judge that the patent was invalid and therefore dismissed the appeal, but allowed the cross-appeal.
The argument before this Court on the cross-appeal concerned the restriction imposed by the judge that prevented both defendants from recovering all their costs subject to detailed assessment. In my judgment on the costs issue, a judgment which was endorsed by the other members of the Court, I said:
"The judge gave leave to appeal against his order for costs. He ordered the appellants to pay the respondents' costs. However with two exceptions he imposed a limitation that from 6th February "the first and second defendants shall recover only 1 set of costs between them, to be taxed as if only one firm of solicitors were acting for both parties and the parties were represented by one leading and one junior counsel, and how that one set of costs is split between the first and second defendants is a matter for them"."
I went on to set out the reasons that the judge gave for restricting the costs recoverable after 6th February 1998 and then pointed out the difficulties that such an order imposed. My conclusion was as follows:
"Mr Waugh [counsel for Bristol Myers] supported the judge's conclusion that from February 1998 the appellants should only be liable to pay one set of costs as that was the amount that it was reasonable for a claimant to pay. I disagree. A losing claimant should ordinarily pay the costs reasonably incurred by the parties that he takes proceedings against. What costs are reasonably incurred by one or more defendants should be ascertained by the costs judge who carries out the assessment. Upon such an assessment duplication and failure to co-operate can be seen and adjustments made accordingly. To decide what costs were reasonably incurred by defendants by considering what costs a losing client should pay, amounts to pre-judging the results of a detailed assessment without considering the facts. The judge's conclusion involved, by implication, a decision that the costs of one or both of the respondents had been unreasonably incurred. That could not have been inferred from the fact that they had separate solicitors and counsel and he had no evidence before him to enable him to reach that decision. No such conclusion could be reached without looking at the full picture which of course would be done by the costs judge on a detailed assessment.
I would discharge the costs order made by the judge upon the basis that he approached the issues between the parties on the wrong basis. Successful parties are ordinarily entitled to their costs reasonably incurred. If there be evidence before the judge that certain costs do not fall within that category, then they should be disallowed. In this case there was no such evidence and therefore the matter had to be left to the costs judge when carrying out the detailed assessment. Of course it is always open to the judge to draw attention in his judgment to matters which he believes require particular investigation during assessment. I would therefore substitute for the judge's orders as to costs an appropriate order for the costs of the respondents to be paid by the appellants.
Conclusion
The judge rightly concluded that the patent was invalid and ordered its revocation. I would therefore dismiss the appeal. I would allow the cross-appeal on costs."
When the judgments were handed down there was placed before the Court an agreed form of order. It ordered that the appeal should be dismissed and the patent should be revoked. As to the cross-appeal it said:
"3. the Respondents' cross-appeal be allowed and paragraph 3 of the order of the Honourable Mr Justice Jacob dated Thursday 1st October 1998 be set aside;
the Appellant/Claimant shall pay the First Defendant/Respondent's costs of the action and counterclaim and shall pay the Petitioners/Second Defendant/Respondent's costs of the Petition and the action and counterclaim such costs to be assessed if not agreed;
the Appellant/Claimant shall pay the Respondents' costs of the appeal and cross-appeal such costs to be assessed if not agreed; …."
It should be noted that that order set aside the judge's order as to costs and provided that both defendants should recover their costs of the trial subject to a detailed assessment.
As was pointed out in my judgment, the costs judge needed to consider whether the defendants had been guilty of unnecessary duplication. He therefore might have restricted the defendants' to recovery of 70% of their costs as contemplated by the order of the judge, but the order potentially allowed each defendant to recover 100% of its costs subject to a detailed assessment.
Because the Court of Appeal order set aside the order on costs made by the judge, it had the effect of ordering that interest should run from the date of the Court of Appeal order. That meant that the amount of interest that had accrued pursuant to the judge's judgment up to the date of the Court of Appeal order had been lost. The judgment of the Court of Appeal therefore deprived the successful party of interest that had accrued during the time between the order made by the judge and that of the Court of Appeal. Although no exact figures can be placed on the amount of interest that had accrued, the evidence suggests that it could be around £50,000. 11. Mr Whittle on behalf of the respondents submitted that it had never been the intention of this Court to deprive his clients of interest that had accrued. The sole issue before the Court of Appeal was whether the restriction to recovery of one set of costs between the defendants was justified. This Court had concluded that it was not and therefore the appropriate order to meet that intention was one which varied the judge's order by deleting the restriction. That would have entitled the defendants to interest from the date of the judge's order on the costs recoverable under that order and interest upon any additional amount of costs recoverable by reason of the Court of Appeal order from the date of that order.
Mr Whittle submitted that this Court had power to correct its order, to a form which met the intention of this Court under the slip rule. It is in these terms:
"40.12(1) The court may at any time correct an accidental slip or omission in a judgment or order.
(2) A party may apply for a correction without notice."
Mr Whittle submitted that it had never been the intention of the Court to deprive the defendants of a right to accrued interest. The Court of Appeal had only considered whether the...
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