Secretary of State for Health and Others v Servier Laboratories Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Henderson |
| Judgment Date | 31 July 2014 |
| Neutral Citation | [2014] EWHC 2720 (Ch) |
| Docket Number | Case Nos: HC11C01423, HC12E02766 and HC12B03451 |
| Court | Chancery Division |
| Date | 31 July 2014 |
[2014] EWHC 2720 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building,
Royal Courts of Justice
Fetter Lane, London, EC4A 1NL
Mr Justice Henderson
Case Nos: HC11C01423, HC12E02766 and HC12B03451
Paul Lasok QC, David DrakeandPhilip Woolfe (instructed by Peters & Peters Solicitors LLP) for the English Claimants
Daniel Beard QC and Julian Gregory (instructed by Reynolds Porter Chamberlain LLP) for the Scottish and Northern Irish Claimants
Laura Elizabeth John (instructed by Geldards LLP) for the Welsh Claimants
Helen Davies QC and Kelyn Bacon QC (instructed by Bristows LLP) for the Defendants
Hearing dates: 9 & 10 June 2014
Introduction
On 9 and 10 June 2014 I heard a case management conference in three related actions in the Chancery Division, in which United Kingdom health authorities claim damages for alleged breaches of competition law contrary to Articles 101 and 102 TFEU against four companies in the Servier group (to which I will refer collectively as "Servier"). Servier manufactured a proprietary drug, Perindopril, which was widely used in the treatment of heart disease. The general nature of the claims is that Servier engaged in various forms of anti-competitive conduct, mainly between 2003 and 2007, which unlawfully impeded the development and marketing of generic versions of the drug after the expiry of Servier's main patents. The total value of the claims is of the order of £260m.
In the first action ("the English proceedings"), begun by a claim form issued on 3 May 2011, the principal claimant is the Secretary of State for Health. Numerous other bodies concerned with the purchase and supply of drugs in the National Health Service ("NHS") in England were also joined as claimants, including all the English Strategic Health Authorities and Primary Care Trusts. In 2013 the NHS in England was reorganised, the Strategic Health Authorities and Primary Care Trusts were abolished, and their rights of action were transferred to the Secretary of State. It is therefore agreed that the English proceedings now need to be re-amended so as to remove those bodies as parties, leaving as claimants only the Secretary of State and the NHS Business Services Authority.
In the second action ("the Scottish/NI proceedings"), begun by a claim form issued on 18 July 2012, the claimants are the Scottish Ministers, the 14 regional Scottish Health Boards, the Department of Health for Northern Ireland, and the Regional Health and Social Care Board of Northern Ireland. The public health authorities of Scotland and Northern Ireland are, of course, independent of each other, and the Scottish NHS is itself separate from the English NHS, the delivery of health services being a devolved function in each region of the UK. Despite these structural differences, however, the Scottish and Northern Irish authorities have been able to make common cause, and have joined in bringing a single set of proceedings.
In the third action ("the Welsh proceedings"), begun by a claim form issued on 10 September 2012, the claimants are the Welsh Ministers and the seven Welsh Local Health Boards.
The allegations of breach of Articles 101 and 102 TFEU made by the Scottish, Northern Irish and Welsh claimants are substantially similar to corresponding allegations made by the English claimants in the English proceedings. There is also a considerable degree of overlap between all three sets of proceedings in relation to issues of causation, and some aspects of quantum. There is, however, one claim made in the English proceedings which (for whatever reason) the other health authorities have chosen not to pursue. It is a claim that between 2001 and 2007 Servier tortiously interfered with the English claimants' economic interests by unlawful means, in that it procured, defended and enforced a particular patent ("the 947 Patent") in the European Patent Office and the English courts in reliance on claims which it knew to be untrue, or as to the truth of which it was reckless. It should be emphasised that this is a purely English tort claim, which does not depend on establishing any breach of either English or European competition law. The factual allegations about Servier's conduct which are relied upon in support of the claim are, indeed, a sub-set of those relied on in support of the English claimants' Article 102 claim; but there is the important difference that the common law claim for unlawful tortious interference does not require the claimants to prove dominance by Servier in the relevant market.
In parallel with the three sets of proceedings in England, the EU Commission ("the Commission") is conducting an investigation into Servier which it opened as long ago as 8 July 2009 ("the Commission proceedings"). It has at all stages been common ground that the UK actions cannot be tried until (at the earliest) the Commission proceedings have been concluded. The reasons for this are explained in a judgment which I handed down on 12 October 2012 in the English proceedings, rejecting an application by Servier for a complete stay of the English proceedings until after the conclusion of the Commission proceedings, but granting a more limited stay until three weeks after the end of the oral hearing requested by Servier following issue by the Commission on 27 July 2012 of a Statement of Objections addressed to Servier and a number of other companies in relation to Perindopril: see [2012] EWHC 2761 (Ch). This judgment (which I will call "the October 2012 judgment") was originally confidential to the parties, because it referred to various confidential communications between the Commission and the court. The Commission has, however, subsequently agreed that the judgment may be published, so it is now in the public domain.
Reference should be made to the October 2012 judgment for a fuller account of the background to the litigation, the issues in the English proceedings, the extent of the overlap between the Commission proceedings and the English proceedings, the history of the Commission proceedings down to the issue of the Statement of Objections, and the difficulties allegedly caused to the French defendants (i.e. the third and fourth defendants) by the French Blocking Statute in giving any form of disclosure in the English proceedings. I will not repeat most of that material, but will take it as read for the purposes of this judgment.
Since October 2012, there have been the following main developments:
i) Servier appealed to the Court of Appeal against my decision in relation to the French Blocking Statute. The appeal was dismissed by Laws, Rimer and Beatson LJJ on 22 October 2013: see [2013] EWCA Civ 1234. The Court of Appeal refused permission to appeal to the Supreme Court, and on 20 December 2013 the Supreme Court itself refused permission. The French Blocking Statute issue has therefore been conclusively determined against Servier.
ii) Meanwhile, by various orders the temporary stay of the English proceedings had been extended until 21 days after the refusal of permission to appeal by the Supreme Court. The stay therefore expired on 10 January 2014.
iii) By my order of 12 October 2012, I had given directions for the initial stages of disclosure in the English proceedings once the stay of those proceedings (later extended to 10 January 2014) had ended. I directed the parties within 35 days of the end of the stay to exchange disclosure proposals, to be followed by a meeting of the parties' legal representatives to discuss them and if possible reach agreement. In default of agreement within 9 weeks from the end of the stay, the claimants were to file an agreed list of issues in dispute and take steps to list a hearing for their resolution.
iv) By a consent order dated 9 October 2013, the Welsh proceedings were stayed until 90 days after the publication of the Commission's decision, coupled with a direction for a case management conference to be convened as soon as practicable thereafter.
v) In the Scottish/NI proceedings, however, no agreement was reached on the question of a stay, and on 2 October 2013 Mann J heard and dismissed an application by Servier to stay the proceedings until after the conclusion of the English proceedings. I will need to examine later the reasons which Mann J gave for refusing a stay. It is enough to say at this stage that he recognised there was a real problem to be addressed, but considered that the solution to it should be found at a joint CMC in all three sets of proceedings.
vi) Following the expiry of the stay in the English proceedings, the parties exchanged disclosure proposals on 12 May 2014. The claimants' proposals included a completed electronic documents questionnaire pursuant to Practice Direction 31B, and a detailed statement of the categories of documents which they expected Servier to search. By contrast, Servier's proposals were set out in a short letter from its solicitors which contended that a "targeted approach to disclosure" should be adopted. More specifically, the proposal was that Servier should identify those documents within the Commission's file which were within Servier's control and make disclosure from those documents, subject to...
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The Secretary of State for Health and Another v Servier Laboratories Ltd and Others
...to the judgment which I handed down on 31 July 2014 following the last CMC in the case which took place on 9 and 10 June 2014: see [2014] EWHC 2720 (Ch) at [1] to 3 Since then, various developments have taken place which I can summarise as follows: (i) Servier has appealed to the General C......