Hydrocortisone Decision back in the Court of Appeal

28/07/26

Litigation arising from the CMA’s Hydrocortisone Decision has resulted in a second judgment of the Court of Appeal, this time concerning the Competition Appeal Tribunal’s findings in respect of unfair pricing. Following the Tribunal’s four separate judgments arising from the first-instance trial ([2023] CAT 56; [2023] CAT 57; [2024] CAT 17; [2024] CAT 29), the Court of Appeal had already delivered a judgment ([2024] EWCA Civ 1023) overturning the Tribunal and upholding the CMA’s findings as to the existence of an unwritten anticompetitive market-sharing agreement concerning the 10mg strength of the drug.

In a further judgment on appeal ([2026] EWCA Civ 974), the Court of Appeal has now considered the CMA’s findings in relation to unfair pricing, which the Tribunal had upheld. The Court of Appeal also upheld those findings, holding that the Tribunal had applied the correct legal test and the correct burden of proof, and the CMA and Tribunal had both taken the correct approach to comparators. However, the Court of Appeal did reject the utility of the three ‘Cases’ which the Tribunal had identified in this course of its discussion, holding at [86] that “The three-case taxonomy is not something which should be used as a framework for analysis in the future.”

The Court of Appeal also heard appeals in relation to the penalties imposed by the CMA. However, in an important affirmation of undertakings’ rights under Article 6 ECHR to an appeal on the merits before the Competition Appeal Tribunal against decisions of the CMA, the Court has upheld the appellants’ appeals against penalty. The Tribunal had, in upholding the penalties imposed by the CMA, directed itself that “our starting point is the CMA’s approach and whether that approach is or is not defensible” and concluded that the CMA’s penalties should be upheld because they were not affected by “material error” (see [374] and [375] of the Tribunal’s Judgment at [2023] CAT 56). The Court of Appeal held that this was insufficient: “the appeal against the CAT judgment has been relegated to an appeal against the findings of the CMA” ([223]). In an appropriate case, the Tribunal could adopt for itself the conclusions of the CMA, but where those conclusions were challenged, they had to be addressed with adequate reasoning ([224]).

The appeals against the CMA’s Decision now return to a different constitution of the Competition Appeal Tribunal to consider the appeals against penalty arising from both the agreements and the unfair pricing abuses, with the benefit of guidance from the Court of Appeal on specific points raised.

The Court of Appeal’s judgment is available here.