Boehringer Ingelheim KG & Anor v Swingward Ltd

Where appeals have been adjourned pending a reference or other event that may affect only part of the costs outcome, the court may determine costs attributable to matters unlikely to be affected. A broad-brush apportionment is permissible where detailed allocation is impracticable. The court may reserve a balance and grant liberty to apply after the outstanding decision. An interim payment may be ordered without a repayment undertaking where repayment is not realistically in issue. In multi-party proceedings, costs may be considered claimant by claimant, while costs need not be apportioned between co-defendants where evidence is lacking and their interests may conflict.

Several pharmaceutical disputes were before the Court of Appeal on appeals and cross-appeals from the Chancery Division, Patents Court. Following the court’s substantive judgment, the appeals were adjourned pending the outcome of an Austrian reference. The defendants applied for costs incurred to date and for interim payments. The parties agreed that the application could be determined on written submissions. The central issue was how costs should be allocated and paid before the reference had concluded.

1. The court declined to await the outcome of the Austrian reference before making any costs order. It was appropriate to determine now those aspects of costs that were unlikely to be affected, while preserving the possibility of a later adjustment.
2. A detailed allocation was impracticable, so a broad-brush assessment was adopted. In the proceedings brought by Eli Lilly, the defendants had succeeded on the re-boxing issues, including compliance with the relevant conditions, but it would go too far to award all costs because the action might ultimately be lost. The defendants were awarded 80% of their costs to date, with liberty to apply for the remaining 20% after the Austrian judgment. Costs were to be assessed if not agreed, and interest was awarded.
3. The same approach applied to the claims brought by Smithkline Beecham. The defendants were awarded 80% of their costs to date, subject to a later application for the balance. For Boehringer and Glaxo, an allowance was made for the notice issue on which the defendants had lost. The appropriate award was 95% of the relevant costs, of which 80% was payable immediately and the balance reserved pending the Austrian judgment.
4. Interim payments were appropriate. No undertaking to repay was required because it was unlikely that the ultimate recoverable sum would be lower than the interim payments. On the working estimate of total defendants’ costs, the payments were £96,000 by Eli Lilly, £72,000 by Smithkline Beecham, £159,600 by Boehringer and £136,800 by Glaxo.
5. The court declined to apportion entitlement between Swingward and Dowelhurst because there was insufficient material and a possible conflict between them. Payment was directed to their solicitors, with liberty to apply to a Chancery Judge if a dispute arose. Similar liberty was granted regarding cost-sharing arrangements between the non-Lilly claimants.

• Court of Appeal (Civil Division): appeals and cross-appeals from the Chancery Division, Patents Court, were adjourned after the substantive judgment pending the Austrian reference. This judgment determined the defendants’ costs application on written submissions.
• High Court of Justice, Chancery Division (Patents Court): underlying pharmaceutical disputes; the judgment appealed from is not otherwise cited in this costs judgment.