Sanofi Aventis Ireland Ltd t/a Sanofi Pasteur v Health Service Executive

• Jurisdiction: Ireland
• Judge: Mr. Justice Denis McDonald
• Judgment Date: 14 December 2018
• Neutral Citation: [2018] IEHC 719
• Date: 14 December 2018
• Court: High Court
• Docket Number: [2018 No. 102 J.R.] [2018 No. 22 COM]

[2018] IEHC 719

THE HIGH COURT

COMMERCIAL

McDonald J.

[2018 No. 102 J.R.]

[2018 No. 22 COM]

IN THE MATTER OF COUNCIL DIRECTIVE 2014/18/EC

AND IN THE MATTER OF THE EUROPEAN COMMUNITIES (AWARD OF PUBLIC AUTHORITIES” CONTRACTS) REGULATIONS (S.I. 284 OF 2016)

AND IN THE MATTER OF THE EUROPEAN COMMUNITIES PUBLIC AUTHORITIES” CONTRACTS) (REVIEW PROCEDURES) REGULATIONS 2010 (S.I. 130 OF 2010 AS AMENDED BY S.I. 192 OF 2015 AND S.I. 327 OF 2017)

BETWEEN

SANOFI AVENTIS IRELAND LTD TRADING AS SANOFI PASTEUR

APPLICANT

AND

HEALTH SERVICE EXECUTIVE

RESPONDENT

AND

GLAXOSMITHKLINE IRELAND LTD

NOTICE PARTY

Costs – Interest – Notice party – Notice party seeking costs – Whether the notice party had a direct and crucial interest in the outcome of the proceedings

Facts: The notice party, GlaxoSmithKline Ireland Ltd (Glaxo), was the successful tenderer in respect of the award of a contract for the supply of the 6 in 1 vaccine to the respondent, the Health Service Executive (the HSE) for a 5 year period commencing in January 2018. The applicant, Sanofi Aventis Ireland Ltd (Sanofi), was a disappointed tenderer. Sanofi challenged the award of the contract to Glaxo. On 12 October, 2018, the High Court (McDonald J) rejected the case made by Sanofi save holding that there had been a failure to provide adequate reasons in respect of two award sub-sub-criteria. However, McDonald J took the view that it would not be proportionate to set aside the award of the contract on that basis. Thereafter, on 9 November, 2018, McDonald J heard argument in relation to the costs of the proceedings as between Sanofi and the HSE (who fully defended the proceedings). In an ex tempore ruling given on the same day, McDonald J awarded the HSE 75% of its party and party costs of the proceedings (to include the costs of discovery and an overnight transcript). On 30 November, 2018, Glaxo sought 100% of its party and party costs (to include the costs of putting in place a redaction protocol, the costs of the 4 day hearing in July and its share of the cost of the overnight transcript). In support of its application for costs, Glaxo argued that, as the successful tenderer, it had a direct and crucial interest in the outcome of the proceedings.

Held by McDonald J that Glaxo was entitled to an order for its party and party costs as against Sanofi solely in respect of the following: (a) its costs of the application to be joined as a notice party to the proceedings; (b) its costs of the preparation and filing of its affidavit evidence; (c) its costs of addressing the confidentiality issue including the negotiation of the redaction protocol; (d) its costs of the overnight transcript; (e) the costs of review of the transcript by solicitor and counsel.

McDonald J held that, save to the extent set out above, he would refuse Glaxo’s application for costs.

Application refused in part.

JUDGMENT ON COSTS of Mr. Justice Denis McDonald delivered on the 14th day of December, 2018.

1 This judgment deals solely with an application for costs made by the above named notice party (‘Glaxo’) on 30 November, 2018. The underlying facts have already been set out in detail in the judgment delivered by me on 12 October, 2018 (neutral citation [2018] IEHC 566) and therefore do not require to be repeated here. In this judgment, I will use the same abbreviations as in my October judgment. At this point, it is sufficient to record that Glaxo was the successful tenderer in respect of the award of a contract for the supply of the 6 in 1 vaccine to the respondent (‘the HSE’) for a 5 year period commencing in January 2018.

2 The applicant (‘Sanofi’) was a disappointed tenderer and, in these proceedings, Sanofi challenged the award of the contract to Glaxo on a number of grounds. The three grounds argued before me related to (i) adequacy of reasons; (ii) the principles of equality of treatment and transparency (in respect of which two complaints were advanced namely that there had been an alleged failure to clearly set out the award criteria and that the HSE had allegedly failed to disclose a number of sub-sub-criteria applied by it in the assessment of tenders); and (iii) manifest error (the argument being that the HSE had allegedly failed to sufficiently recognise in the marks allotted to Sanofi, that its vaccine was significantly superior in a number of respects to the Glaxo vaccine).

3 In my judgment delivered on 12 October, 2018, I rejected the case made by Sanofi save to the limited extent set out in paras. 145-146 of the judgment where I held that there had been a failure to provide adequate reasons in respect of two award sub-sub-criteria. However, I took the view that it would not be proportionate to set aside the award of the contract on that basis.

4 Thereafter, on 9 November, 2018, I heard argument in relation to the costs of the proceedings as between Sanofi and the HSE (who fully defended the proceedings). In an ex tempore ruling given on the same day, I awarded the HSE 75% of its party and party costs of the proceedings (to include the costs of discovery and an overnight transcript). In light of the fact that the HSE had not succeeded in full, I came to the conclusion that it should not recover any more than 75% of its party and party costs.

5 In circumstances where it did not involve itself in the debate relating to the adequacy of reasons, Glaxo now seeks 100% of its party and party costs (to include the costs of putting in place a redaction protocol, the costs of the 4 day hearing in July and its share of the cost of the overnight transcript).

6 In support of its application for costs, Glaxo argued that, as the successful tenderer, it had a direct and crucial interest in the outcome of the proceedings. Glaxo acknowledged that this might be said of the successful tenderer in all procurement challenges but it argued that its interests went beyond the norm in circumstances where (a) Sanofi challenged the ‘safety and efficacy’ of its vaccine; (b) there was a significant concern about the need to preserve the confidentiality of Glaxo information; and (c) it was suggested that Glaxo, by reason of its long experience as a tenderer, was particularly well placed to assist the court in relation to what the RWIND tenderer would understand by the terms of the IOT and related documents.

7 In response, Sanofi accepted that the issue in relation to confidentiality was a legitimate concern but contended that this could have been adequately addressed in correspondence; it did not require full scale participation in the proceedings. With regard to the position of the RWIND tenderer, Sanofi drew attention to the fact that this had been addressed extensively by the HSE in its affidavit evidence before the court. Sanofi also suggested that Glaxo, in its submissions on costs, had overstated the issue relating to its vaccine; Sanofi urged that it had not called the safety of the Glaxo vaccine into question; it had made the case that its own vaccine had significant advantages over the Glaxo product such that it should have received a substantially higher score than Glaxo (this was the manifest error issue).

8 I should explain that, in the proceedings, Sanofi complained that the HSE was manifestly in error in giving Glaxo almost the same score as Sanofi in relation to certain aspects of the tender notwithstanding that the Sanofi vaccine was, on Sanofi's case, significantly superior in that it is fully liquid and is supplied in a pre-filled syringe which does not require reconstitution. In contrast, the Glaxo vaccine requires reconstitution. It is supplied in two parts, namely a pre-filled syringe together with a separate vial. The medical practitioner is required to add the contents of that vial to the syringe immediately before administration of the vaccine. As a consequence, Sanofi contended that it is more time consuming to administer the Glaxo vaccine and that the Glaxo vaccine was more prone to handling errors.

9 In relation to Glaxo's application for costs, Sanofi also argued that it was of some significance that in the lengthy judgment delivered in October 2018, no mention is made of any submission made by Glaxo. This was not controverted by counsel for Glaxo although, at one point in his submissions he drew attention to one reference in the judgment (at page 82) to an averment made by Grainne Farrell in her affidavit sworn on behalf of Glaxo on 28 June, 2018 where she dealt with what would be known to operators in the vaccine sector about the need that any 6 in 1 vaccine should be capable of being administered to the total cohort of patients. For completeness, it should be noted that I did not rely solely on Ms Farrell's evidence in this context. In relation to the same issue, at page 81 of the judgment, I had already quoted from the very comprehensive affidavit of Ms Cliona Kiersey sworn on behalf of the HSE on 9 March 2018.

Discussion

10 In my view, it is necessary in the first instance to consider the circumstances in which Glaxo came to be joined as a participant in these proceedings. On 16 February, 2018, McCann Fitzgerald, on behalf of Glaxo, wrote to Arthur Cox, on behalf of Sanofi, indicating an intention to apply to the court to join Glaxo as a notice party to the proceedings. In their response of 20 February, 2018, Arthur Cox stated that Sanofi neither consented nor opposed the proposed joinder. However, Arthur Cox also made clear that Sanofi did not consider the joinder of Glaxo to be necessary in circumstances where (as proved to be the case) it was expected that all issues would be fully addressed by the HSE. The letter warned that if Glaxo proceeded with the application, it would be ‘ entirely at its own risk as to its costs …[and] any application by your client seeking … its costs against our client will be vigorously contested…’.

11 On 26 February, 2018, McCann Fitzgerald responded to say that Glaxo would...