The Competition And Markets Authority v Flynn Pharma Ltd & Ors

Permission to amend grounds of appeal may properly be granted to raise an important point of law, even where the proposed amendment departs from a concession made below. The court must consider legal certainty and any forensic prejudice. Permission is more readily granted where the issue is legal rather than dependent on new evidence, where it was canvassed below, and where the existing evidence is sufficient. A public authority may, in good faith, withdraw a position adopted in earlier proceedings if it considers that position legally wrong. The amendment does not erase the forensic significance of the earlier concession.

The CMA appealed from the Competition Appeal Tribunal’s judgment, reported at [2018] CAT 11, which had set aside findings that Pfizer and Flynn had abused dominant positions by charging unfairly high prices for phenytoin sodium capsules. The CMA applied under CPR 52.17 and Practice Direction 52C paragraph 30 to amend its grounds of appeal and argue that the Tribunal had erred in law concerning alternative limbs of the excessive-pricing test. Pfizer opposed the application, relying on the CMA’s concession below that a prima facie valid comparator had to be considered. The issue was whether permission should be granted to advance the amended point.

1. Application granted. Permission was granted to amend the grounds of appeal.
2. The proposed amendment raised a discrete and qualitatively different point of law concerning an issue of substantial importance to the regulation of drug prices and competition law more broadly. Legal certainty favoured resolving the issue rather than leaving it to arise in a later case.
3. The court’s concern when a party changes position on appeal is forensic prejudice. As explained in Jones v MBNA International Bank Limited [2000] EWCA Civ 314, permission is less readily granted where the new case might have required different evidence, enquiries or reasoning below. That concern was not decisive here because the comparator evidence was already before the Tribunal and the issue had been fully canvassed.
4. The amendment did not erase the CMA’s earlier concession. The respondents remained entitled to rely on it as a forensic point. Any uncertainty created by the change could remain relevant to penalty issues if the matter were remitted.
5. A public authority may revise its position in good faith after concluding that its earlier legal stance was wrong. It should not persist in applying a policy it considers legally erroneous. The merits of the amended argument were left for determination at the full appeal.

• Court of Appeal (Civil Division): On 4 October 2019, Lord Justice Green granted the CMA permission to amend its grounds of appeal. The merits of the appeal were left for determination.
• Competition Appeal Tribunal: The Tribunal’s judgment at [2018] CAT 11 had set aside the CMA’s abuse findings and penalties.