England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
(Mr Justice Pumfrey)

		Royal Courts of Justice Strand London WC2 Friday 14th December, 2001

1. LORD JUSTICE ALDOUS: The decision on costs in actions such as this which are complicated, both technically and in their length, are not easy. We have had placed before us an unreported judgment of Mr Fysh QC sitting as a deputy judge of the Chancery Division. The case is McGhan Medical UK Ltd v Nagor Ltd and Biosil Ltd. In that case he put forward a number of principles to be applied when deciding the orders that should be made on costs. There is good sense in the decision that he came to on the facts of that case. But it must be remembered that the CPR gives to the court a wide discretion. It has to be exercised in the light of CPR 44.3 and, of course, the overriding objective which requires the court to seek to do justice.
2. For my part, I cannot endorse all the principles which Mr Fysh set out. Having said that, it appears to me that the conclusion that he reached was one which was fair and just on the facts.
3. One of the principles relating to an award of costs set out by Lord Woolf MR in AEI Rediffusion Music Ltd v Phonographic Performance Ltd [1999] 1 WLR 1507, at 1522. He said this:

"I draw attention to the new Rules because, while they make clear that the general rule remains, that the successful party will normally be entitled to costs, they at the same time indicate the wide range of considerations which will result in the court making different orders as to costs. From 26th April 1999 the `follow the event principle' will still play a significant role, but it will be a starting point from which the court can readily depart. There is also the position prior to the new Rules coming into force. The most significant change of emphasis of the new Rules is to require courts to be more ready to make separate orders which reflect the outcome of different issues. In doing this the new Rules are reflecting a change of practice which has already started. It is now clear that too robust an application of the `follow the event principle' encourages litigants to increase the costs of litigation, since it discourages litigants from being selective as to the points they take. If you recover all your costs as long as you win, you are encouraged to leave no stone unturned in your effort to do so."

4. In this action, which was an expensive action, it is important in my view to consider the issues that were argued. No party in an expensive action, such as a patent action, should believe that he can (in the words of the Master of the Rolls) leave no stone unturned without risking having to pay costs.
5. In this case, the issue upon which the appellants won was an issue of construction. Neither Pumfrey J nor this court found it an easy one to resolve. In those circumstances, it cannot be said that it was one which was improper to argue. That being so, I do not believe it right that the respondents who won the appeal and the action should receive their costs of that issue. Nor do I believe that they should be in the position in which they should not have to pay some contribution in respect of it.
6. In those circumstances, I have come to the conclusion that there should be some deduction. Having considered the evidence which is before us, I have come to the conclusion that the judge's order for costs should be reduced by 10 per cent and the respondents should recover 90 per cent of their costs in this court.
7. LORD JUSTICE SEDLEY: I agree.
8. LADY JUSTICE ARDEN: I also agree.
ORDER: Appeal dismissed; permission to appeal to the House of Lords refused; appellants to pay 90 per cent of the respondents' costs in this court; the order of the judge on costs reduced 10 per cent; interim order for costs of £100,000.