Snafu solutions

Many lawyers will have heard horror stories of slip ups that have been made in court. A recent decision in the Patents Court reminds practitioners that the rule allowing the court to correct accidental slips is perhaps not as extensive as some may think.

When a mistake is noticed on an order, lawyers often look to CPR 40.12 or 'the Slip Rule' for help. The rule deals with the correction of errors in judgments and orders by the court. While the rule appears uncomplicated the white book notes it is one of the 'most widely known but misunderstood rules'.

The Slip Rule can be cost effective in resolving situations where an order has an incorrect date or there is a typographical error. Through without notice correspondence a party can have the order amended by the Slip Rule. However, where a mistake has been made by a representative, relying on the court's discretion under the Slip Rule is by no means guaranteed '“ as parties are learning to their detriment.

Slipping up

In LEO Pharma A/S, Leo Laboratories Limited v Sandoz Limited [2010] EWHC 1911, the defendant Sandoz sought to rely on the Slip Rule to correct an order made by consent. The order had been made following a patent infringement trial. Justice Floyd ordered a stay of the final orders pending an appeal by Sandoz. The parties were asked to draw up the order and emails between respective counsel followed in an attempt to try and agree the order.

To avoid unnecessary costs, Sandoz's counsel advised that it would agree the claimant's LEO's form of order. The order was signed by junior counsel. It was only later that Sandoz realised that paragraph 9 of the order provided for the LEO to recover 'any sums found due on the taking of said inquiry into damages or account of profits together with interest at eight per cent from the date of this order'.

Sandoz had not intended to agree to pay such interest but was bound by the order to do so when its appeal was dismissed. Sandoz applied under the Slip Rule for the order to be amended to remove the interest provision, submitting that is was 'clearly an error'.

Sandoz argued that paragraph 9 of the order had not been considered or discussed in emails between counsel and that counsel had no recollection of discussing interest provisions. Furthermore, interest provisions had never been the subject of discussions between Sandoz's solicitor and its counsel nor the subject of correspondence with LEO's solicitors. Also, Sandoz had previously objected to interest and its counsel had not given any indication to LEO's counsel that those objections had been withdrawn. Nevertheless, the court found that the Slip Rule could not be used to amend the order. Paragraph 9 was to remain.

Mr Justice Lloyd commented that paragraph 9 had plainly been agreed. Sandoz's leading counsel had indicated his agreement to the wording and junior counsel had signed the order. Both acted on Sandoz's instructions. The fact that there was no discussion as to interest did not mean the order had not been agreed.

The court accepted that the Slip Rule is used to amend orders to ensure that the court's intention is made clear, referring to Bristol Myers Squibb v Baker Norton Pharmaceuticals [2001] EWCA Civ 214 where the Slip Rule was applied because the order did not give effect to the court's original intention and had an unexpected effect. Therefore it was right for the order to be amended under the Slip Rule.

However, in Smithkline Beecham and others v Apotex Europe Limited and Other [2005] EWCHC 1655, the court refused to use the Slip Rule because the order properly reflected its intention and if amended it could not be sure what order should be made in its place.

In Sandoz, the question of interest had been settled because the parties had agreed the form of order and signed it (albeit mistakenly by Sandoz). It was not right to amend under the Slip Rule and the order did not therefore incorrectly reflect the court's intention.

Unfortunately, while there had been a mistake by Sandoz in agreeing the order, this was not an accidental slip for the purposes of the Slip Rule. It could not therefore be rectified by it. Sandoz had expressly agreed the order by signing it.

If the order had been amended it would have led to uncertainty surrounding agreed orders which, by their nature, must be taken to record the position agreed between parties. The court would not have known what order to make in its place.

Watch out

This case is a stark warning for practitioners that the courts will not use the Slip Rule to correct errors unless they are to amend an accidental slip or omission which does not give effect to the court's true intention.

Care should be taken when agreeing orders because the mistake of one party will not be rectified by the court. An order agreed by the parties will be accepted on its face. If, as a result of miscommunication or otherwise, orders do not accurately represent what a party meant to agree, this will not be enough to rely on the Slip Rule.

The court holds important the fact that the parties' signatures to orders are an important tool in displaying their intention and consent. This cannot easily be undone. It remains as important as ever for parties and their representatives to thoroughly consider the precise drafting of orders before putting their hand to them.