Neurim Pharmaceuticals (1991) Ltd & Anor v Generics UK Ltd & Anor

Where an interim injunction is granted on the balance of convenience, costs will ordinarily be reserved because the injunction holds the ring until trial and does not determine the merits. That approach does not automatically apply where the injunction is refused because damages are an adequate remedy. In that situation, the costs application should ordinarily be determined at the interlocutory stage. The court may adopt an issues-based approach and reduce the successful defendant’s recovery to reflect issues on which it lost.

The claimants applied for an interim injunction against the defendants. The application was refused in [2020] EWHC 1362 (Pat). The court found that there was a serious issue to be tried, but that damages were an adequate remedy. The parties then made written submissions on the costs of the failed application. The central issue was whether costs should be reserved to the trial judge or decided immediately, and, if decided immediately, how the defendants’ success on some issues and failure on others should affect recovery.

1. Costs of an injunction granted. The approach in Picnic at Ascot v Kalus Derigs [2001] FSR 2, following Desquenne et Giral UK Ltd v Richardson [2001] FSR 1, concerns the usual case where an interlocutory injunction is granted, or the defendants accede to it, on the balance of convenience. Costs are ordinarily reserved because the injunction holds the ring until trial. The claimant has succeeded only on the low threshold of showing a serious issue to be tried.
2. Refusal because damages are adequate. That reasoning does not automatically or inevitably apply where the injunction is refused. The adequacy of damages is principally assessed at the interlocutory stage, rather than being left for determination at trial. Since the application failed at Stage 2 of the American Cyanamid process, the costs should be dealt with immediately.
3. Issues-based assessment. The defendants successfully resisted the application and were entitled to their costs on the standard basis, subject to detailed assessment. However, they lost on the serious-issue-to-be-tried question and other issues, including the amount of damages recoverable. The court therefore reduced recovery to reflect those failures.
4. The defendants were ordered to recover no more than 65% of their assessed costs, with a payment on account of £80,000.

First-instance costs ruling following refusal of the interim injunction in [2020] EWHC 1362 (Pat).