7 Rolls Buildings
London EC4A 1NL
B e f o r e :
| VERNACARE LIMITED
|- and -
|ENVIRONMENTAL PULP PRODUCTS LIMITED
Richard Davis (instructed by Walker Morris) for the Defendant
Hearing dates: 27th July 2012
Crown Copyright ©
His Honour Judge Birss QC :
"The correct approach is to ask oneself three questions. First of all, who has won; secondly has the party that has won lost on an issue which is suitably circumscribed to deprive that party of the costs of that issue and, thirdly, is the case a suitably exceptional one to justify making a costs order on that issue against the party who has won overall."
6. A significant issue which has divided the parties in relation to the costs of this particular case is, who has won. The approach of the court to determining that question has been set out most authoritatively by Lord Bingham, the Master of the Rolls, in Roache v News Group Newspapers  EMLR 161 at 168 where he said this:
"The judge must look closely at the facts of the particular case before him and ask: who, as a matter of substance and reality, has won? Has the plaintiff won anything of value which he could not have won without fighting the action through to a finish? Has the defendant substantially denied the plaintiff the prize which the plaintiff fought the action to win?"
19. When so much can be said on both sides for the fact that they have achieved a commercial victory, I think there is a danger, at least in some cases, in the court starting from the standpoint that one party and not the other was the winner. Mr. Carr very properly reminded me that there are some cases, of which AEI v PPL is one example, where the court has come to the conclusion somewhere on the spectrum of possible results between the two extremes contended for by the parties where the court has recognised that there is no overall winner.
20. I think the present case may present a different example of that principle where giving too much weight to a decision about the overall winner might cause an unjust result. I have borne that very strongly in mind in the approach which I have decided to adopt. It is of course tempting in such a situation to make no order as to costs at all, but I do not think it proper or fair to do that in this case.
21. Standing back, it seems to me to be fair to view the matter in this way. Omnipharm has achieved success in relation to three formulations, but not in relation to formulation B and the validity of '881, which had great importance to Merial going far beyond this case. Moreover, invalidity of '881 would have given Omnipharm a significant further degree of freedom than that which they actually achieved. Nevertheless, if I apply Lord Bingham's approach and ask myself, has Omnipharm won anything of value which it could not have won without fighting the action and has Merial substantially denied the plaintiff the prize which they fought to win, I think I have to come to the conclusion that Omnipharm were the overall winners. I bear in mind also that the extent to which they have won is a factor which I can bear in mind in arriving at an appropriate proportion."
23. In my judgment the right approach is the following. I should start with the actual costs for a given stage. Then they should be summarily assessed on the normal PCC basis. That produces a figure for the party's summarily assessed costs at that stage. That figure is the one to which the issue based discount should be applied. Once the discount has been applied the figure can be compared to the scale and the lower of the two taken.
|Stage||Actual costs||Summary Assessment||Issue based discount||PCC scale
in Table A
|PCC scale for this case (r45.42(4))||Result|
|1||Particulars of Claim||£9,458||£6,500||£4,225||£6,125||£6,125||£4,225|
|2||Defence and counterclaim||£11,131||£7,500||£4,875||£6,125||£6,125||£4,875|
|3||Reply and defence to counterclaim||£11,976||£7,500||£4,875||£6,125||£6,125||£4,875|
|4||Attendance at a case management conference||£10,036||£7,000||£4,550||£2,500||£2,500||£2,500|
|5||Preparing experts reports||£28,003||£20,000||£13,000||£7,500||£6,000||£6,000|
|6||Preparing for and attending trial and judgment||£40,000 (approx)||£28,000||£18,200||£15,000||£10,000||£10,000|