Court dismisses GlaxoSmithKline's application for non-party costs order

Introduction

The High Court recently ruled in favour of Brit UW Limited, dismissing an application by GlaxoSmithKline UK Limited (GSK) for an extension of time to apply for a non-party costs order (NPCO). The case, presided over by the Honourable Mr Justice Bourne, centred on whether GSK could recover legal costs from Brit, the insurer under an 'after the event' (ATE) insurance policy, following the discontinuation of claims by multiple claimants against GSK.

Background

The litigation originated from claims by several hundred publicly funded claimants who alleged that GSK's antidepressant medication, Seroxat, was defective and caused harm. A Group Litigation Order was made in 2007, but the claims were discontinued after the Legal Services Commission withdrew public funding in 2010. Despite attempts to challenge the funding decision, the claims were eventually dismissed in 2020.

The Application

GSK sought an extension of time to apply for an NPCO against Brit, who had issued an ATE policy to the claimants. The extension was necessary because GSK had missed the deadline set by Lambert J in a 2020 order, which required any NPCO application to be made by 31 July 2020. GSK argued that they were not aware of the need for an NPCO until Brit's position became clear in May 2023.

Legal Framework

Under section 51(1) of the Senior Courts Act 1981, the court has discretion over costs in civil proceedings. GSK's application was tested against the Civil Procedure Rules (CPR), particularly rules 1.1 and 3.9, which govern the overriding objective and relief from sanctions, respectively. The case also referenced key judgments such as Yesss (A) Electrical Ltd v Warren and Viegas v Estate of Jos� Luis Cutrale, which discuss implied sanctions and the application of the overriding objective.

Arguments and Judgment

GSK, represented by John Lockey KC, argued that the order did not carry an implied sanction and that the application should be assessed under the overriding objective of dealing with cases justly. Brit, represented by Jason Robinson, contended that the order did carry an implied sanction, requiring the application of the Denton test for relief from sanctions.

Mr Justice Bourne concluded that the order did not carry an implied sanction, but nevertheless, GSK's application was not justified under the overriding objective. He noted that GSK had been slow to act and had failed to bring the matter before the court in a timely manner. The judge emphasised the importance of compliance with court orders and the need to deal with cases expeditiously.

Conclusion

The court dismissed GSK's application, highlighting the lack of a sufficient explanation for the delay and the need to enforce compliance with court orders. The judgment underscores the significance of adhering to procedural timelines and the challenges of seeking relief from missed deadlines.

Learn More

For more information on insurance and litigation funding, see BeCivil's guide to Contractor Law.