Medac Gesellschafte Fur Klinische Spezialpraparate GmbH v Star Pharmaceutical Ltd

Discontinuance does not prevent the court from determining a pending application to revise a costs budget. Budgeting future costs remains meaningful even if those costs have been incurred, or proceedings have ended, by the hearing date. The court’s task is a broad-brush assessment of whether significant developments justify the revisions and whether the proposed costs fall within a reasonable and proportionate range. That exercise is distinct from detailed assessment. Delay in applying is relevant, but does not itself bar revision where the application was made before the relevant costs were incurred and the circumstances do not show prejudice or an abuse of costs management.

The defendant applied to revise its approved costs budget in a trade mark infringement claim concerning parallel-imported pharmaceutical products. The claimant later discontinued the claim after a related Court of Appeal decision, and argued that the defendant’s costs-budget application could no longer proceed.

The defendant sought revision only for future trial preparation and trial costs, reflecting newly raised issues and an increased trial estimate. The issues were whether discontinuance ended the court’s jurisdiction, whether costs management after termination was conceptually impossible, whether revision would merely ratify overspending, and whether the defendant had delayed unreasonably.

1. Jurisdiction after discontinuance. The application could be determined notwithstanding discontinuance. Under CPR 38.5(3), proceedings end against the defendant on service of notice, but this does not affect proceedings dealing with costs. The court followed the reasoning in Hoist UK Ltd v Reid Lifting Ltd [2011] 1 Costs LR 36.
2. Costs management after termination. Revising a budget for future costs was not a contradiction merely because those costs had become incurred by the hearing date or because the proceedings had ended. Costs management operates by reference to the budget position at the relevant date and can control recoverable costs under CPR 3.15(3).
3. Applicable test. Under CPR 3.18 and PD3E paragraph 7.6, the court asks whether significant developments justify revision and whether the revised phases fall within a reasonable and proportionate range. Costs management is a broad-brush exercise. It is distinct from the detailed inquiries undertaken on assessment. The court declined to follow the broader reasoning in Elvanite Full Circle v Amec Earth and Environmental (UK) [2013] 4 Costs LR 612, while noting that the present application had been made before trial rather than after its conclusion.
4. Application. The amended issues, expert evidence and packaging and labelling issue constituted significant developments. They were capable of justifying a six-day trial estimate, which the claimant had itself accepted as falling within the range of reasonable and proportionate costs.
5. Delay and order. The defendant’s timing did not justify refusal. The claimant had applied to revise its own budget only four days earlier, and both applications would have been heard together. The revisions relating to trial preparation and a six-day trial were permitted.