Les Laboratoires Servier & Anor v Apotex Inc & Ors

When a party seeks to amend its pleadings after evidence and argument have concluded, the court must consider the overall consequences of granting or refusing the amendment. Relevant matters include prejudice, the public interest in avoiding wasted court resources, settlement effects, the party’s delay, and any risk of an unjustified windfall. Prejudice capable of compensation in costs is not decisive. A failure to weigh a serious consequence may make the exercise of discretion flawed, even where the discretion is wide. The appellate court may then re-exercise the discretion and impose appropriate conditions, including responsibility for costs incurred by the late application.

The appeal arose from an inquiry before Norris J into damages payable under a cross-undertaking given in respect of an interlocutory injunction. The injunction had prevented Apotex from selling a product for 11 months before the relevant patent was held invalid. Norris J assessed the appropriate sum at £17.5 million.

After the inquiry had concluded, Servier sought to amend its pleadings. The proposed amendments relied on a Canadian decision concerning infringement of a different, basic perindopril patent. They raised possible legal and accounting defences, including whether Apotex could recover damages for manufacture that would have infringed Canadian law and whether the English award would produce double recovery. Norris J refused the amendments as too late. The central issue was whether that discretionary refusal was flawed.

Appeal allowed. Jacob LJ gave the leading judgment, with Sullivan LJ and Sir David Keene agreeing.

1. The proposed amendments raised two distinct and well arguable issues. The court did not need to decide their ultimate merits at this stage.
2. In exercising the discretion to permit or refuse a very late amendment, the court must assess the overall effect of its decision. Relevant considerations include whether prejudice can be compensated in costs, the public interest in the administration of justice, the risk that court time and resources will have been wasted, possible effects on settlement, and the fact that an amendment after the conclusion of an inquiry is materially different from an amendment before trial.
3. A particularly serious consideration was the real prospect that refusal would leave Apotex with a total windfall. The Canadian proceedings might compensate Servier for manufacture which occurred in Canada, but it was unclear whether they would return money awarded in England for manufacture prevented by the English injunction. Norris J mentioned this possibility but failed to weigh it in the exercise of his discretion. That omission materially flawed the decision.
4. The Court of Appeal therefore re-exercised the discretion and allowed the amendments. The order for £17.5 million plus interest required consequential amendment, with the sum treated in substance as an interim payment and no immediate repayment sought. Permission to amend was granted on the condition that Servier pay the entire costs of the inquiry to date. The basis of those costs and the further consequences of the amendment remained to be addressed.

• Court of Appeal (Civil Division): Allowed the appeal from Norris J’s refusal to permit the late amendments and directed that the amendments be allowed subject to Servier paying the entire costs of the inquiry to date.
• High Court of Justice, Chancery Division, Patent Court: Following an inquiry into damages under the cross-undertaking, Norris J assessed the sum at £17.5 million and refused Servier’s proposed amendments as too late.