In Competition and Markets Authority (CMA) v Flynn Pharma Ltd [2022] UKSC 14, two pharmaceutical companies successfully argued the Court of Appeal had been wrong to hold there was a principle that costs orders should not be made against unsuccessful public bodies exercising their statutory functions.
The pharmaceuticals contended this principle did not exist, instead case law made it important for courts to take into account any possible ‘chilling effect’ on the conduct of the public body concerned.
There were four interveners in the case, including the SRA.
Giving the lead judgment, Lady Rose held there was no such principle that public bodies should be protected from costs orders.
However, she noted the ‘very different position’ of the SRA, which undertakes about 120-130 prosecutions a year, usually recovers costs from unsuccessful solicitors and, following Baxendale-Walker v Law Society [2007] 3 All ER 330, [2007] EWCA Civ 233, does not usually pay the costs of successful solicitors.
Lady Rose said: ‘These costs can be considerable and if they were not recovered by the SRA from the unsuccessful solicitor, the costs would have to be borne by the profession. I recognise the importance of the Baxendale-Walker authority for the continued proper functioning of the SRA and I do not regard this judgment as casting any doubt on the correctness of that decision.’
A Law Society spokesperson said: ‘While the decision does not cast any doubt on the position taken in Baxendale-Walker, it does highlight the ability of regulatory tribunals―such as the Solicitors Disciplinary Tribunal (SDT)―to calibrate their approach to costs in accordance with what’s appropriate for each matter that comes before them.
‘The SDT has the power to order costs against the SRA and is encouraged to exercise those powers where appropriate and in the interests of justice. This should achieve the right balance between fairness to our members and safeguarding the public interest.’
