Merck KGaA v Merck Sharp & Dohme Corp & Ors (Costs)
2014
CHANCERY DIVISION
United Kingdom
CORAM
- MR JUSTICE NUGEE
Areas of Law
- Civil Procedure
- Contract Law
2014
CHANCERY DIVISION
United Kingdom
CORAM
AI Generated Summary
Mr. Justice Nugee had to address the issue of costs following his judgment on a preliminary issue. The Claimant sought an order for costs against the Defendants, who countered with either costs in the case or a percentage of costs. The judge reaffirmed the general rule that the unsuccessful party should pay costs and found no sufficient reason to deviate from this principle. Accordingly, the Defendants were ordered to pay the Claimant's costs and make an interim payment of £220,000.
Costs Judgment
Mr Justice Nugee :
I have handed down my judgment on the preliminary issue this morning and now have to deal with the costs. The parties have not attended but have filed helpful written submissions by reference to a draft Order put forward by the Claimant.
There are two points on the draft Order. The first is whether I should order the Defendants to pay the Claimant's costs of the issue, as the Claimant seeks, or should order either that costs be in the case or award the Claimant a percentage of its costs as the Defendants seek.
The starting point under CPR r 44.2(2)(a) is that if the Court decides to make an order about costs the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party. I have no doubt that for the purposes of this rule the Claimant is the successful party. It has succeeded in the only issue which was heard and decided. It does not matter for this purpose that its success does not by itself establish that it has any claim for breach of contract or otherwise against the Defendants.
Under the general rule therefore the Defendants would be ordered to pay the Claimant's costs. Under CPR r 44.2(2)(b) the Court may however make a different order. Mr Hollingworth relies on a number of matters in support of his submission that the Court should order costs in the case.
The first is that the issue which I have decided, that of the proper law of the 1970 Agreement and 1975 Letter, only arises because of the claim for breach of contract and is only one aspect of that claim. Success on the preliminary issue does not therefore mean that the Claimant will ultimately establish any claim in contract at all, and the incidence of costs should therefore be the same as if it had been tried as part of that claim.
I do not think that this is a reason for departing from the general rule. The Defendants asked for a preliminary issue. They did so because it was thought to be helpful to the parties, and to the Court, for the question of proper law to be determined as a discrete issue. I agreed, which is why I acceded to their application. But the corollary of this is that the question did not arise as part and parcel of the trial but was tried separately. That necessarily involved a separate hearing with separate preparation and the incurring of separate costs on that issue. It is in general a salutary principle that those who lose discrete aspects of complex litigation should pay for the discrete ap