Supreme
Court says that CMA should pay appellant’s costs in Flynn-Pfizer appeal
The
Supreme Court has ruled on costs relating to the appeals by Pfizer and Flynn
against the decision of the Competition and Markets Authority (CMA) that imposed
penalties on Pfizer and Flynn for charging unfair and excessive prices for
phenytoin drugs.
The
Competition Appeal Tribunal (CAT) in its June 2018 judgment found that the
CMA’s conclusions on abuse of dominance were in error and it remitted this
issue to the CMA for reconsideration.
The
starting point in assessing costs in the CAT is that an unsuccessful party will
pay the successful party’s costs. While
the costs rules in the CAT are flexible, the CAT ordered that the CMA pay
Pfizer and Flynn a proportion of their costs of their appeal.
Allowing
the appeal by the CMA, the Court of Appeal held that the CAT had erred in not
taking the starting point that costs should not generally be awarded against a
public body.
The
Supreme Court disagreed with the Court of Appeal and found that the CAT was
within its powers to take as a starting point the principle that "costs
follow the event".
Therefore,
the Supreme Court allowed the appeals by Pfizer and Flynn and reinstated the
CAT's costs ruling.
The
Supreme Court did not accept the claim that imposing a cost order on the CMA in
these circumstances would have a chilling effect on its enforcement.
The
implications of the judgment may be felt beyond cases involving challenges to
CMA decisions. There is a potential read
across to decisions of the sector regulators on the application of their concurrent
competition and sector regulatory powers.
Flynn
Pharma Limited v CMA and Pfizer Inc and another v CMA [2022] UKSC 14
