Today the High Court handed down judgment in the case of R (Eisai Ltd) (Alzheimer’s Society & Shire Ltd, Interested Parties) v. the National Institute for Health and Clinical Excellence.

In her judgment, Mrs Justice Dobbs ruled that NICE had failed in its duty to ensure that its guidance was not discriminatory and that there was a need for NICE to clarify its position as to the circumstances when doctors may exercise their own clinical judgment about whether a patient should have access to drug treatments, overriding NICE’s recommendations when it is appropriate to do so.

The court did not find that the NICE guidance itself (which recommends Alzheimer’s drugs only for patients in the moderate stage of Alzheimer’s disease) or the way in which NICE had calculated benefits of the drugs for carers was irrational.  The Judge also dismissed an argument by drug manufacturer Eisai that the decision-making process was unfair because NICE’s cost effectiveness model was not made public.

However, ordering NICE to amend its Guidance, Mrs Justice Dobbs made strong criticisms of NICE’s failure to comply with its statutory equality duties under the Race Relations Act and the Disability Discrimination Act.  Upholding the challenge by Eisai and the Alzheimer’s Society, the Judge found that “no proper consideration was given to NICE’s duties as a public authority to promote equal opportunities and to have regard to the need to eliminate discrimination” and that, at the stage of formulating its Guidance, NICE had not considered or complied with its “due diligence” equality duties, and it did not appear that any thought was given to present or imminent obligations under anti-discrimination law.

The Alzheimer’s Society, representing the interests of people with dementia and their carers, acted as one of a number of separate interested parties in this challenge.

Tim Ward and Gerry Facenna were junior counsel to the Alzheimer’s Society.

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Tim Ward QC
Gerry Facenna

 

 

On 26 July 2007, the Competition Appeal Tribunal unanimously dismissed an appeal brought by a local newspaper proprietor,  Mr. Brannigan, which challenged the OFT’s refusal to investigate a complaint under the Competition Act 1998.

Mr. Brannigan complained to the OFT that two rival publishers, Newsquest and Johnston Press had engaged in exclusionary practices contrary to the Chapter I and II prohibitions which had forced him out of the market in the East Sussex area.  He claimed that Newsquest had threatened litigation, cancelled the printing slot for his publication, launched a “spoiler” free newspaper and had targeted Mr. Brannigan’s customers with selective discounts conditional on them advertising exclusively in Newsquest’s papers.

The OFT rejected Mr. Brannigan’s complaint on its administrative priorities but offered to reassess the complaint at a hearing on 26 April 2006, after the CAT refused to strike the case out.  On re-assessment, the OFT rejected the complaint on the basis that there was no clear evidence of dominance or abuse.  It also refused to investigate the complaint further for reasons of administrative priority. Mr. Brannigan appealed that rejection to the CAT, which dismissed his appeal against the decision on the grounds that on the facts available there was not enough evidence to suggest that the OFT had made any material error of law, fact or appraisal.  As to the question of whether the OFT should have conducted further investigations, a decision by the OFT not to carry out an investigation under section 25 or to reject a complaint otherwise than on the grounds that there has been no infringement was a decision which could only be challenged before the Administrative Court, not the Tribunal.

Daniel Beard and Anneli Howard represented the OFT.

Jennifer Skilbeck and Ben Rayment assisted Brannigan pro bono at the preliminary stages of the appeal, who appeared in person at the hearing.

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Daniel Beard QC
Ben Rayment
Anneli Howard

 

 

Case C-369/04 Hutchison 3G UK Ltd & Others v CEC and Case C-284/04 T-Mobile & Others v Austria, Judgments of 26 June 2007

The ECJ has held that a Member State’s auction of 3G licences does not constitute an economic activity and so falls outside the scope of the Sixth Directive.  In finding that claims by successful bidders for recovery of allegedly-paid VAT have failed at the first hurdle, the ECJ declined to offer any observations on the other questions referred.  Issues such as when treatment of a public authority as a non-taxable person will lead to “significant distortions of competition” therefore remain shrouded in uncertainty.  There is, however, an interesting gleam of light in the short judgment. In departing from the Opinion of Advocate General Kokott, the ECJ has indicated that the door is open for the crossfertilisation of certain concepts in VAT and competition law.

We are delighted to announce that Monckton Chambers has been nominated as “Set of the Year” for Competition and EU for the third year running as part of the Chambers Bar Awards 2007 held in recognition of the high quality work done at the Bar.  These nominations are the result of research conducted for the next edition of Chambers UK.  We also offer our congratulations to Peter Roth QC who in the same category has been shortlisted as “Silk of the Year”.

We would like to take this opportunity to thank all our clients for their continuous support.

Judgment is expected in September in R(Federation of Tour Operators) v HM Treasury.

The Federation of Tour Operators challenged the recent increase in the rate of Air Passenger Duty, a tax upon the carriage of passengers by air, which is typically passed on by airlines to their passengers.

Tour Operators sell flights as part of package holidays but are prevented by the Package Travel Regulations from passing on the increase in the tax to customers who had already made bookings, but not yet travelled, at the time this increase took effect.  They argued that the Treasury overlooked this difficulty and that as a result a burden of £45 – £50m of the tax has unintentionally stuck with them, giving rise to a breach of their “right to property” protected by Article 1 of the First Protocol to the ECHR.  They further argued that the entire tax was contrary to the Chicago Convention on aviation, and Community law.

Tim Ward acted as junior counsel for the tour operators.

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Tim Ward QC

On 18 July 2007 the House of Lords gave judgment in Sempra Metals Ltd v. HMRC [2007] UKHL 34, the latest instalment in the long running Advance Corporation Tax (‘ACT’) group litigation.  The decision has already been described as having rewritten the law on debt repayment (The Times, 18 July 2007).

Sempra, formerly Metallgesellschaft Ltd., was one of the original claimants in the EC challenge to the UK’s ACT regime, part of which the ECJ held to be contrary to the right of establishment under Article 43 EC.  After the ECJ decision in 2001, five test cases proceeded, in order to resolve various issues arising out of the numerous claims for compensation by foreign companies and UK subsidiaries in respect of premature payments of ACT made between 1973 and 1999.  Four of the test cases have now progressed through the domestic courts and been decided by the House of Lords (Pirelli [2006] UKHL 4; Deutsche Morgan Grenfell [2006] UKHL 49; Boake Allen [2007] UKHL 25 and Sempra).  The fifth case, Test Claimants in Class IV, was referred by the High Court back to the ECJ, which delivered judgment in December 2006.

The appeal in Sempra raised two issues.  The first was the effect of the ECJ’s decision in Metallgesellschaft, on which the Court of Appeal had taken the view that the ECJ decision required the English courts to award compound interest to Sempra, regardless of the position in national law.  The House of Lords unanimously rejected that view, agreeing with the Revenue that the appropriate remedy was a question to be determined by national law, subject only to EC principles of ‘equivalence’ and ‘effectiveness’.

Secondly, the Revenue contended that Sempra had no cause of action in English law by which it could recover compound interest.  On this point, their Lordships sided with Sempra: Lords Hope and Nicholls concluded that there is a right at common law to recover compound interest representing the objective ‘time value of money’ as personal restitutionary relief in a claim for money paid under a mistake of law.  Lords Mance and Walker agreed that compound interest was available, but as an equitable discretionary remedy, rather than as of right at common law.  Lord Scott dissented, taking the view that compound interest could be claimed as damages but that Sempra had no restitutionary claim for interest based on a breach of EC law.  Lord Scott agreed with Lords Hope and Nicholls, however, that such a claim, if it existed, should be as of right at common law, and not available purely as a discretionary equitable remedy.

Their Lordships also disagreed on the appropriate measure of recovery: Lords Mance and Scott dissented from the majority view that recovery should reflect the objective ‘time value of money’, reasoning that Sempra could only recover the interest the Revenue actually earned in the relevant period.  All agreed, however, that a claimant may recover compound interest as damages, and the majority took the view that such a claim is available in all cases of late payment of debts.  On the particular facts of this case, their Lordships also agreed that recovery should be calculated by reference to the government borrowing rate, rather than the higher market borrowing rate contended for by Sempra.

Gerry Facenna is acting as junior counsel for HM Revenue & Customs in two of the five ACT group litigation test cases, Sempra and Pirelli.

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Gerry Facenna

 

 

On 12 July the Court of First Instance in Luxembourg awarded over 100 individuals, largely from Britain, substantial damages against the European Commission.  It ordered the Commission to pay almost £30m in relation to two linked sets of claims.

The individual claimants all worked at the EU’s nuclear fusion project (JET) based at Culham in Oxfordshire but they were not given the status of European employees.  Therefore they were denied the pay, pension rights and other benefits of the EU employees who worked alongside them carrying out the same functions on one of the largest scientific projects in Europe.  After a 7 year legal battle, involving three hearings in Luxembourg, the Court of First Instance first found that the Commission had committed “serious misconduct” by practising “long-term discrimination” against the claimants, and then fixed the amount of damages that each claimant can recover.

Two group actions were brought on behalf of over 100 contractors.  One group was represented by Peter Roth QC, Ian Hutton and Ben Lask, the other by Daniel Beard, all of Monckton Chambers.

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Daniel Beard QC
Ben Lask

The Court of First Instance (CFI) rejected a state aid challenge by Bouygues, one of the mobile phone operators in France, on 4th July 2007 against a decision of the European Commission which had found that the grant of 3G licences in France to France Telecom and SFR involved no aid.

France had retrospectively reduced the price of the 3G licences acquired by France Telecom and SFR to match the lower price subsequently paid by Bouygues when Bouygues was subsequently awarded the third 3G licence.  The CFI concluded that this price reduction afforded France Telecom and SFR no advantage and so involved no state aid.  In reaching its conclusion the CFI relied on the Community legislation setting out the manner in which 3G licences were to be awarded by the Member States.

Christopher Vajda QC who was instructed by the Paris office of Denton Wilde Sapte, acted on behalf of SFR, the number two mobile operator in France.

 

 

The House of Lords delivered its judgment in the test case on commercial agents’ compensation under Regulation 17 of the Commercial Agents (Council Directive) Regulations 1993 on 4th July 2007.

The House of Lords (Lord Hoffmann giving the lead Opinion, with the other members concurring) upheld the Court of Appeal’s approach that compensation is to be assessed by way of a business valuation of the value of the agency to the agent at the date of termination. He clarified that courts should presume a hypothetical buyer and a hypothetical open-market sale, but that otherwise the actual value should be assessed.

The House of Lords expressly disapproved of the approach in the Scottish Outer House of the Court of Sessions case King v Tunnock and also declined to make a reference to the European Court of Justice.

Philip Moser of Monckton Chambers acted for Lonsdale on behalf of Amicus.

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Philip Moser QC

 

 

At the end of June hearings took place in R(EISAI) and Alzheimer’s Society v NICE.

The case concerns a challenge to guidance issued by the National Institute for Health and Clinical Excellence (“NICE”) which restricts the availability of drugs which serve to inhibit the symptoms of Alzheimer’s Disease. This is the first time NICE is being challenged.

Previously, the drugs had been available to patients with mild or moderate Alzheimer’s Disease.  The effect of the new guidance issued by NICE was to restrict availability to patients suffering from mild Alzheimer’s Disease.  The companies which manufactured the drugs and the Alzheimer’s Society argued that the Guidance was unlawful for a range of reasons, including a breach of the requirements of the Race Relations Act 1976. Judgment is expected on 10 August.

Tim Ward and Gerry Facenna acted for the Alzheimer’s Society.

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Tim Ward QC
Gerry Facenna