Are Interested Parties more at risk on costs?

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Following a recent decision by Mr Justice Blake, Interested Parties in judicial review proceedings may be concerned that the courts are more likely to make costs orders against them in the future where challenges fail.

The Hepatitis C Trust ("the Trust") applied for permission to bring judicial review proceedings against NHS England ("NHSE") alleging NHSE had failed to implement properly technical appraisal recommendations ("TARs") issued by the National Institute for Health and Care Excellence ("NICE") for the use of three new drug treatments for Hepatitis C. The TARs were the first ever to require NHSE to prioritise use rather than make the relevant drugs available to all patients affected by the specific condition for which the drugs were recommended. In this case, NICE directed treatment was to be prioritised to those with the highest unmet clinical needs.

Following consultation with clinicians and relying on the best available evidence to assess treatment requirements around the country, NHSE planned to treat 10,011 patients in the first year (more than twice as many as had been treated the previous year), with treatment numbers rising each year by 2020/2021. The Trust was supported by one of the three pharmaceutical companies, who are manufacturers of the drugs named as interested parties and it argued NHSE was applying an arbitrary cap to the numbers to be treated. In his decision refusing to give permission to proceed Mr Justice Blake said the Trust's assertion that NHSE's decision to treat specific numbers amounted to an arbitrary cap was a mischaracterisation of the decision.

He found the monthly run rate underpinning the 10,011 treatments in the first year to be a legitimate way of giving effect to the NICE guidance that the treatments had to be available as an option for patients with qualifying conditions to prioritise treatment for people with the highest unmet clinical need. He held that questions about the meaning of the NICE policy were matters for the court – the Trust had produced evidence from NICE as to what its policy meant – and that if prioritising need is legitimate, then a monthly run rate is a rational way of implementing the duty whether it was a means foreseen by NICE or not. The judge found the overall balance of clinical need, efficiency of expenditure, the balance between competing health conditions and the duty to balance the books, are all matters for NHSE.

Of perhaps more interest to the public authority defendants who will often face the prospect of having to deal with allegations from claimants and Interested Parties, against whom there is little prospect of recovering what can sometimes be significant costs of successfully defending claims, is the observation from the judge that "it is undesirable that the Defendant as a public authority devoted to healthcare should have its budget for health provision reduced by irrecoverable legal costs it has incurred to meet a failed challenge". The Trust is a charity, with limited funds and it had sought a Protective Costs Order ("the PCO") because of its financial position, seeking to limit any costs order against it to £49,000.

The judge concluded it would have been inappropriate to have made the PCO sought had he granted permission, but he made an order limiting the costs to be paid to NHSE for the permission stage to the sum of £20,000, which he considered to be proportionate having regard to the central legal point in dispute and the means of the respective parties. He observed that in the present case, there were other potential litigators to progress any arguable challenge – the interested parties – who were well able to meet NHSE's uncapped costs.

The judgment may therefore be a sign of things to come and evidence a willingness on the part of the court to order commercial operators which are well able to fund litigation to pay some of the costs incurred by the public sector, where proceedings are unsuccessful. It is a case of "watch this space".