UK regulators no longer exempt from paying successful parties' costs
The UK Supreme Court has ruled that regulators such as the Competition and Markets Authority (CMA) should be required to pay the costs of a party successfully appealing against one of their infringement decisions.
The court handed down the decision yesterday, May 25, in an appeal brought by Pfizer and Flynn Pharma against an earlier decision by the Court of Appeal of England and Wales.
The issue arose when the companies brought an appeal before the Competition Appeal Tribunal (CAT), which challenged a CMA decision fining them for an infringement of competition law.
The CAT allowed the appellants’ appeal in part, set aside part of the CMA’s decision and remitted the decision to the CMA for reconsideration.
The CAT also made an order that the CMA pay the appellants a proportion of those costs, a decision later dismissed by the appeals court.
That court held that the CAT had erred in ordering the CMA to pay the appellants’ costs because it had disregarded a principle derived from a line of cases starting with Bradford Metropolitan District Council v Booth (2000).
The appeals court held that where a tribunal’s power to make an order about costs does not include an express general rule or default position, “the starting point is that no order for costs should be made against a public body that has been unsuccessful in bringing or defending proceedings in the exercise of its statutory functions”.
But the Supreme Court’s judgment now reverses this decision, removing the exemption.
Bristow’s partner Sophie, who led the team, commented: “We’re very pleased to see that our clients’ submission was helpful to the court, and that they agreed with a number of points made in the intervention, citing it in various locations.”
She added: “More importantly, this judgment ensures that meritorious appeals, which can result in crucial guidance for the sector as a whole, are not deterred.”
According to a statement by Bristows, companies in the pharmaceutical sector have been subject to significant competition law scrutiny in recent years, often in relation to novel and previously untested conduct, so effective (and fair) rights of appeal are therefore critical.
“The costs of appealing against a CMA decision can be very high (with trials often lasting a week or more), on top of the potentially large sums incurred during the administrative phase,” noted the firm.
Did you enjoy reading this story? Sign up to our free daily newsletters and get stories sent like this straight to your inbox.
