Interesting Slip: Leo Pharma v Sandoz

CPR 40.12 (1) provides:

“The court may at any time correct an accidental slip or omission in a judgment or order.”

It is known as the “slip rule”. It has a very venerable history. It replaces RSC O20 r.11 which provided:

“Clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected by the Court on motion or summons without an appeal.”

What constitutes an “accidental slip or omission” has generated a large body of case law to which Mr. Justice Floyd’s judgment in Leo Pharma A/S & Anor v Sandoz Ltd [2010] EWHC 1911 (Pat) (27 July 2010) is the latest addition.

In Leo Pharma A/S and Another v Sandoz Ltd [2009] EWHC 996 (Pat) (15 May 2009), Mr. Justice Floyd found that the claimants’ patent was valid and infringed. He granted the claimants the usual relief, namely an injunction, orders for delivery up and the choice of an account of profits or inquiry as to profits. A minute of order was drawn up and agreed by counsel. It included the following paragraph:

“9. The Defendant shall pay to the Claimants any sums found due on the taking of said inquiry into damages or account of profits together with interest at the judgment rate (being 8%) from the date of this Order.”

As the judge said:

“Normally an order made after judgment directing an enquiry or account would not specify the rates or periods of interest. On occasions an order will specify interest under the Senior Court Act or under the inherent jurisdiction of the court without mentioning a rate. Again, in the general case, interest runs from the date on which the cause of action arose. Paragraph 9 specified interest from the date of the order only. It therefore represented interest at a high rate but over a shortened period.”

However, nobody gave that paragraph any thought at the time because the judge granted the defendant permission to appeal.   He stayed the final injunction continuing instead a narrower pre-trial interim injunction pending the appeal.  As the injunction was partially stayed, the claimants did not resist the defendant’s request for a stay of the remainder of the order – including paragraph 9.

The defendant appealed unsuccessfully to the Court of Appeal (see Leo Pharma (a/s Leo Laboratories Ltd) v Sandoz Ltd [2009] EWCA Civ 1188. After the appeal failed the stay to the order, including paragraph 9, was removed. Faced with an order to pay interest at 8% the defendant applied for the words relating to interest to be omitted under the “slip rule”.

The slip rule, which is described in the White Book notes as “one of the most widely known but misunderstood rules”, exists primarily to correct typographical or other careless errors.   Although the rule can be used to correct a minute of order that fails to implement the intention of the court (as in Bristol Myers Squibb v Baker Norton Pharmaceuticals [2001] RPC 45, (2001) 24(6) IPD 24035, [2001] EWCA Civ 414) it cannot put right a mistake made by a party’s legal representative (see SmithKline Beecham and others v Apotex Europe Limited and others [2006] 1 WLR 872, [2005] EWHC 1655 (Ch)).

The defendant argued that the order did not give effect to the intention of the court because the judge had said nothing about interest.   Though that was true, the judge made clear at para [24] that “it was entirely within the scope of the court’s intention for the parties to agree the precise terms of the order as to interest.”

Concluding that the problem arose because the defendant had been optimistic about its chances of success on appeal which, if successful, would have rendered the contents of the order about interest academic, the judge could find no “accidental slip” in the order.    He therefore dismissed the application.


About Jane Lambert

I am a barrister specializing in intellectual property, technology, media and entertainment and competition law. I specialize in helping SME (small and medium enterprises) protect and exploit their investment in brands, design, technology and the arts. SME require intellectual property (legal protection for their intellectual assets) at least as much as big business but their limited means restrict the way they can use it. Looking after such clients wisely requires skills and knowledge which have taken me years to learn.
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