Costs Reserved Meaning: AstraZeneca v Glenmark

The decision in AstraZeneca AB and Another v Glenmark Pharmaceuticals Europe Ltd and Others [2026] Costs LR 695 provides helpful guidance on an issue that frequently arises during litigation but is often misunderstood by clients and even practitioners. What happens when the court orders that the costs of an interim application are “costs reserved”?

During the course of litigation, it is common for the court to deal with numerous interim applications before the substantive dispute reaches trial. Rather than making an immediate order as to costs after every hearing, the court will often reserve the issue until later.

The AstraZeneca decision confirms that, unless there is good reason to do otherwise, reserved costs will usually follow the ultimate outcome of the litigation. In practice, this means that the successful party will normally be entitled to the costs of those earlier applications when the final costs order is made.

At ARC Costs, we regularly advise solicitors on interim costs orders, Bills of Costs and detailed assessment proceedings. This decision reinforces the importance of understanding how costs orders made during litigation affect the overall recovery of costs.

The background to the case

The underlying proceedings involved a high-value pharmaceutical patent dispute between AstraZeneca and several generic pharmaceutical manufacturers. As with many complex commercial cases, there were a number of contested interim applications before the substantive issues were determined.

One such case application involved an interim injunction. Rather than deciding who should pay the costs immediately after the interim hearing, the court reserved those costs for later determination.

Once the litigation concluded, the court was asked to determine whether the costs of that earlier application should follow the final outcome of the proceedings.

What does “costs reserved” actually mean?

An order that costs are reserved simply postpones the court’s decision about liability for those costs. It does not mean the costs disappear, nor does it mean each application will automatically receive a separate costs hearing at a later date.

Instead, the issue remains outstanding until the court is in a position to determine the overall costs of the proceedings. The AstraZeneca decision confirms that the starting point is that reserved costs should usually follow the final outcome of the litigation.

Accordingly, the party in whose favour the final judgment is given will generally also be entitled to the costs of interim applications where those costs had simply been reserved.

The general rules under CPR 44.2

The decision reflects the general rules contained within CPR 44.2. The Civil Procedure Rules provide that the unsuccessful party will usually pay the costs of the successful party.

The court retains a broad discretion when making a costs order, but the starting position is that costs follow the event. This principle applies not only to the litigation as a whole but also to reserved costs unless there is a compelling reason for a different outcome.

The court therefore confirmed that where costs have simply been reserved, they will ordinarily be dealt with as part of the proceedings when the final costs order is made.

Why does the court reserve costs?

There are several reasons why judges choose not to determine costs immediately following an interim application. Often, the court does not yet know which party will ultimately succeed.

An application that appears significant at an early stage may become relatively unimportant once the substantive dispute has been resolved.

By reserving costs, the court can consider the litigation as a whole before deciding which party is entitled to recover the costs incurred throughout the proceedings. This approach also avoids multiple satellite disputes over costs after every interim hearing.

Reserved costs are different from “costs in the case”

Solicitors will also encounter orders stating that there be “costs in the case”. Whilst similar in effect, there is an important distinction.

An order for costs in the case generally means that the costs of that application will automatically follow the outcome of the main proceedings.

Where costs are simply reserved, the court retains the discretion to make whatever order it considers appropriate at the conclusion of the litigation.

In practice, however, the AstraZeneca decision confirms that reserved costs will often produce the same result unless there are exceptional circumstances.

When might the court make a different order?

Although the judgment confirms the general approach, the court’s discretion remains wide. There may be circumstances where reserved costs should not follow the ultimate result.

Examples include:

• An application that should never have been pursued.
• Serious procedural misconduct.
• Unreasonable litigation behaviour.
• A party succeeding on a discrete issue entirely separate from the trial.
• Conduct justifying a different costs order the court considers appropriate.

Ultimately, each decision will depend on the individual facts. The court’s objective remains to make a fair costs order reflecting the justice of the case.

Other types of costs orders

The AstraZeneca decision also provides a useful opportunity to distinguish between the different types of orders the court may make during litigation.

These include:

• Costs reserved – the court postpones its decision until later.
• Costs in the case – the costs follow the final outcome of the proceedings.
• Costs in any event – one party will recover those costs regardless of the ultimate result.
• Immediate orders requiring one party to pay the costs of a particular application.

Each order carries different consequences for costs recovery and should be considered carefully throughout the litigation.

Why accurate time recording remains essential

One practical consequence of the decision is the importance of maintaining accurate records. Where costs are reserved, there may be a considerable period between the interim application and the eventual assessment of costs.

At ARC Costs, we regularly prepare Bills of Costs involving litigation that has spanned several years. Good attendance notes, clear narratives and accurate recording of costs incurred during each interim application make it significantly easier to justify recovery when the final costs order is eventually made.

What does this mean for receiving and paying parties?

For the receiving party, the decision provides reassurance that work undertaken during interim applications should not be overlooked simply because the court postponed its decision.

If successful overall, the receiving party will generally be entitled to the costs of those applications as part of the final assessment.

For the paying party, the case serves as a reminder that liability for earlier applications may continue throughout the litigation and form part of the eventual final costs order.

Arguments that reserved costs should be treated differently will require clear justification.

How ARC Costs can help

Interim applications often generate substantial legal costs, particularly in commercial litigation, intellectual property disputes and other complex proceedings.

At ARC Costs, we regularly advise solicitors on:

• Bills of Costs
• Costs arising from interim applications
• Costs budgeting
• Detailed assessment proceedings
• Negotiation of costs disputes
• Reserved costs and costs of the part
• Recovery of costs incurred throughout litigation

The decision in AstraZeneca AB and Another v Glenmark Pharmaceuticals Europe Ltd and Others [2026] Costs LR 695 confirms that, in most cases, reserved costs should follow the ultimate outcome of the litigation. Understanding the different types of orders the court may make, and how they affect recoverability, is essential for both receiving and paying parties seeking to maximise or protect their position on costs.

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