Servier permitted to amend to plead failures to mitigate, contributory negligence and remoteness to limit Department of Health’s damages claim

10/10/16

On 4 October 2016 Henderson J handed down judgment in The Secretary of State for Health & Ors v Servier [2016] EWHC 2381 in which he considered for the first time the application of the principles of mitigation, contributory negligence and breaks in the chain of causation/remoteness in competition damages claims. The judgment is likely to be of relevance to many such claims.

The Claimants allege that Servier used a variety of unlawful means in order to delay generic entry into the market for the supply of Servier’s branded drug Perindopril. They seek to recover loss arising from the fact that Perindopril was more expensive than it would have been but for the alleged anticompetitive conduct.

Servier sought permission to re-amend its defence to plead that the Claimants failed to take reasonable steps to encourage switching from the prescription of Perindopril to cheaper alternative generic drugs throughout the period of the alleged unlawful activity. It argued that such conduct constituted a failure to mitigate the Claimants’ loss, contributory negligence, a break in the chain of causation and/or rendered the loss suffered too remote.

Henderson J granted permission to amend and dismissed the Claimants’ argument that the proposed amendments were not reasonably arguable. He rejected as “artificial and unrealistic” the Claimants’ attempt to characterise their claim as giving rise to a new cause of action every time Perindopril was prescribed, dispensed and reimbursed such that the failure to encourage switching predated any infringement of their rights and could only amount to contributory negligence rather than a failure to mitigate.

Henderson J also dismissed the Claimants’ argument that a duty to mitigate can only arise where a Claimant has actual or constructive knowledge of wrongdoing or loss. He concluded that the question of the steps which a Claimant should take in order to mitigate his loss was always one of fact, to be decided in the light of all the circumstances.

Similarly unsuccessful were the Claimants’ arguments that a plea of failure to mitigate may not be made in respect of consequences intended by the tortfeasor, and that a defence of failure to mitigate would be inconsistent with the nature and purpose of causes of action under Articles 101 and 102 TFEU and the economic tort of unlawful interference.

Henderson J also considered Servier’s pleas in contributory negligence and causation/remoteness to be properly arguable. He emphasised that these concepts were all interrelated and that different judges used different tools from the “toolbox” in order to reach their conclusions. He considered that it would be inappropriate to exclude concepts from the “toolbox” available to a Judge at trial unless it was overwhelmingly clear that they had no prospect of being successfully deployed.  

The judgment can be found here.