Secretary of State for Health and another v Servier Laboratories Ltd and Others
| Jurisdiction | England & Wales |
| Neutral Citation | [2021] UKSC 24 |
| Court | Supreme Court |
2021 April 14, 15; July 2
Tort - Cause of action - Causing loss by unlawful means - Health authorities alleging proprietors and licensees of drug patent preventing sale of cheaper version of drug in United Kingdom by deceiving European Patent Office and English courts - No allegation that such unlawful conduct interfering with freedom of European Patent Office or English courts to deal with health authorities - Whether necessary element of tort that unlawful means interfered with third party’s freedom to deal with claimant
The defendants, who were the proprietors and licensees of a European patent of a prescription-only drug, obtained injunctions preventing a cheaper version of the drug from being sold in the United Kingdom. Subsequently the defendants’ patent was revoked by the European Patent Office (“the EPO”). The claimant health authorities, which funded the cost of drugs dispensed by the NHS in England, brought proceedings against the defendants for, amongst other things, the tort of causing loss by unlawful means. In particular they alleged that the defendants had obtained, defended and enforced the patent by practising deceit on the EPO and the English courts with the intention of profiting at the claimants’ expense and that, because of the defendants’ unlawful actions, manufacturers of cheaper versions of the drug had not entered the market as early as they would have done, resulting in the claimants paying too much for their supplies of the defendants’ product. The judge struck out the unlawful means tort claim, holding that part of the ratio decidendi of the House of Lords’ decision in OBG Ltd v Allan was that a necessary element of the tort was that the unlawful means had to have affected a third party’s freedom to deal with the claimant (“the dealing requirement”) and that this element was missing in the present case because the defendants’ acts had not interfered with the freedom of the EPO or the English courts to deal with the claimants. The Court of Appeal dismissed the claimants’ appeal. The claimants appealed on the grounds that the dealing requirement did not form part of the ratio of OBG so far as it applied to the present case, alternatively that OBG should be departed from.
On the appeal—
Held, dismissing the appeal, that in OBG, which the House of Lords had seen as an opportunity to clarify and give coherent shape to the law relating to economic torts, the majority had sought to keep the tort of causing loss by unlawful means within reasonable bounds by giving a narrow rather than a wide meaning to “unlawful means”, which reflected the restrictive policy approach taken by the majority towards all the economic torts, including inducing breach of contract and conversion; that, on a true construction of the speeches of the majority, the dealing requirement had been part of the ratio decidendi of the OBG decision; that, in particular, the dealing requirement (i) was consistent with the explanation in OBG of the rationale of the unlawful means tort, which focused on wrongful interferences with a person’s liberty to deal with others, (ii) was included in those parts of the decision where the essence of the tort was explained and expanded upon, (iii) was part of the majority’s definition of what unlawful means consisted of, (iv) was explained and justified in OBG through the analysis of previous authority in which there had been no interference with dealings between the claimant and a third party, (v) was consistent with the authorities in which liability for the unlawful means tort had been established, which all involved dealings, (vi) was consistent with and reflected the concern that the tort be kept within reasonable bounds and that a narrow meaning be given to unlawful means, (vii) was endorsed by all members of the majority as being part of the definition of the tort and (viii) had, since OBG, been understood to be a necessary element of the tort by courts both in the United Kingdom and elsewhere in the Commonwealth; that no real life examples of the House of Lords’ decision in OBG causing difficulties, creating uncertainty or impeding the development of the law had been provided and none of the alternative approaches as to how the unlawful means tort could be refashioned, without the dealing requirement, offered a safe and appropriate way of developing the law; that, therefore, no good or sufficient reason had been shown to justify departing from OBG; that it followed that a necessary element of the tort of causing loss by unlawful means was that the unlawful means used by the defendant against a third party should have affected the third party’s freedom to deal with the claimant; and that, accordingly, the judge had properly struck out the claimants’ claim as to causing loss by unlawful means (post, paras 57–62, 63–74, 83, 87, 89, 100, 101).
The following cases are referred to in the judgments:
A I Enterprises Ltd v Bram Enterprises Ltd
Allen v Flood [
Douglas v Hello! Ltd (No 3)
Emerald Supplies Ltd v British Airways plc (Nos 1 and 2)
Fish & Fish Ltd v Sea Shepherd UK
GWK Ltd v Dunlop Rubber Co Ltd (
Garret v Taylor (
Hardie Finance Corpn Pty Ltd v Ahern (No 3)
Henderson v Dorset Healthcare University NHS Foundation Trust
Intellihub Ltd v Genesis Energy Ltd
Les Laboratoires Servier v Apotex Inc
Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [
Lonrho plc v Fayed [
Lumley v Gye (
National Phonograph Co Ltd v Edison-Bell Consolidated Phonograph Co Ltd [
OBG Ltd v Allan
Oren v Red Box Toy Factory Ltd [
Practice Statement (Judicial Precedent) [
Quinn v Leathem [
RCA Corpn v Pollard [
Revenue and Customs Comrs v Total Network SL
Rookes v Barnard [
Sorrell v Smith [
Tarleton v M‘Gawley (
Wolero Pte Ltd v Lim
The following additional cases were cited in argument:
Alcock v Chief Constable of South Yorkshire Police [
Austin v Southwark London Borough Council
D v East Berkshire Community Health NHS Trust
Frozen Value Ltd v Heron Foods Ltd
JSC BTA Bank v Ablyazov (No 14)
Knauer v Ministry of Justice
Meretz Investments NV v ACP Ltd
Midland Silicones Ltd v Scruttons Ltd [
Mogul Steamship Co Ltd v McGregor Gow & Co (
Ooranya Pty Ltd v ISPT Pty Ltd
Surzur Overseas Ltd v Koros [
Thomson (DC) & Co Ltd v Deakin [
APPEAL from the Court of Appeal
In 2011 the claimants, the Secretary of State for Health and the NHS Business Services Authority, commenced proceedings against the defendants, Servier Laboratories Ltd, Servier Research and Development Ltd, Les Laboratoires Servier SAS and Servier SAS, claiming damages and interest exceeding £220m for breaches of European Union and United Kingdom competition law and commission of the tort of causing loss by unlawful means. In respect of the claim in tort it was alleged that the defendants had obtained a patent from the European Patent Office (“the EPO”) and defended the patent in both the EPO and the English courts on the basis of representations about the novelty of the alpha form of the salt of perindopril which the defendants knew to be false or were recklessly indifferent as to those matters. By a judgment dated 2 August 2017 Roth J [2017] EWHC 2006 (Ch); [2017] 5 CMLR 17 granted the defendants’ application to strike out the unlawful means tort part of the particulars of claim on the grounds that even if the claimants’ factual allegations were true, there had been no interference with either the EPO’s or the English courts’ freedom to deal with the claimants. By a judgment dated 15 November 2017 Roth J [2017] EWHC 2905 (Ch) refused permission to appeal.
On 12 July 2019 the Court of Appeal (Sir Terence Etherton MR, Longmore and McCombe LJJ) [2019] EWCA Civ 1160; [
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