The Secretary of State for Health & Anor v Servier Laboratories Limited & Ors

Where preliminary issues are ordered to establish general standards and avoid extensive disclosure, the court may determine them on that basis at the scheduled trial. A party cannot later require a body-by-body inquiry or further disclosure when unchallenged case-management decisions made clear that the trial would proceed without it. If a party contends that only a subgroup should have taken particular steps, it must formulate clear, workable criteria in time for evidence to address them. A vague alternative case raised only at trial does not require determination. A preliminary-issues trial is the substantive opportunity to present the case, not a rehearsal for a later evidential exercise.

Servier appealed from the judgment of Roth J, [2022] EWHC 369 (Ch), in three sets of competition damages claims concerning alleged anti-competitive conduct affecting the supply and price of perindopril. The High Court tried preliminary issues about whether health authorities had acted unreasonably by failing to encourage prescribing of cheaper ACE inhibitors. It answered the relevant mitigation issue in the negative after a trial conducted on a general, cross-board basis, without further disclosure from individual PCTs and Health Boards. Servier contended that the judge should instead have permitted a later inquiry into bodies with higher prescribing levels. The central issue was whether that alternative case could be pursued after the preliminary issues and case-management directions had fixed the basis of the trial.

Disposition

The appeal was dismissed unanimously. Servier did not challenge the High Court judge’s factual findings. Its main ground was that the judge had been wrong to dismiss its mitigation defence without further disclosure and without examining individual PCTs and Health Boards.

1. The preliminary issues had been ordered as a proportionate case-management device intended to establish general standards and avoid extensive local disclosure. The order adjourning further disclosure, the judge’s subsequent directions, and the pre-trial ruling all made clear that the trial would proceed on a general basis rather than by examining each body separately. Servier had not appealed those decisions.
2. The judge was therefore entitled to determine preliminary issue (c) at the trial and was not required to postpone the answer pending disclosure from further PCTs or Health Boards. The conclusion on ScriptSwitch was expressed generally and did not leave open a later body-by-body inquiry.
3. The Court applied the principle in Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5, [2014] FSR 29, that a trial is the substantive occasion for deciding the case, not a rehearsal for a later evidential exercise.
4. Servier could have advanced standards identifying the circumstances in which particular bodies should have taken particular steps. Such standards could then have been tested by expert and factual evidence without knowing what each body had actually done. The example given by the judge was a defined percentage of ACE prescribing over a specified period. Servier’s alternative case remained vague and was raised only at trial, so the judge was not required to rule on it.
5. The Court also endorsed the proportionate case-management approach, consistently with the observations in NTN Corp v Stellantis NV [2022] EWCA Civ 16. Since the main ground failed, the Court did not need to address the two further grounds concerning preliminary issues (a) and (b).

• Court of Appeal (Civil Division): In [2023] EWCA Civ 763, the appeal was dismissed. The Court held that the High Court had properly determined the mitigation preliminary issue without further local disclosure or a later PCT-by-PCT inquiry.
• High Court (Chancery Division, Competition List): Roth J, in [2022] EWHC 369 (Ch), answered preliminary issue (c) in the negative and rejected the proposed mitigation defence on the evidence and the general standards applicable across the relevant health authorities.