Astex Therapeutics Ltd v AstraZeneca AB [2018] EWCA Civ 2444

Josephine Davies appeared for the Appellant in this significant Court of Appeal case arising from a pharmaceutical drug discovery collaboration agreement. The appeal concerned both liability and costs. Although, the Court found for the Respondents (on a point of construction) on the main liability appeal, its decision on costs is important.

The judge at first instance had awarded costs of trial against the Appellant on the indemnity basis from the date of expiration of a settlement offer made by the Respondents. The Court of Appeal took the unusual step (applying the principles in F&C Alternative Investments) of replacing this order with one for standard basis costs.

Adopting Kiam v MGM, the court held it would be “a rare case indeed where a refusal of a settlement offer” (not under CPR 36) would attract a costs order on the indemnity basis. It examined two other factors relied on by the Respondents and concluded they did not justify the indemnity costs. In particular, the Court emphasised that Kitchin LJ had granted permission to appeal on questions of construction and on the facts. Floyd LJ concluded “I cannot see anything in Astex’s [the Appellant’s] conduct which could justify an order for indemnity costs.”

Given the very substantial costs of the three week trial at first instance ([2017] EWHC 1442 (Ch)), this judgment is likely to have a substantial financial impact.

Josephine Davies (instructed by Clifford Chance LLP) acted for Astex Therapeutics Limited.