When “Not Warning” Isn’t Misleading: The High Court on Contingent Risks and Commercial Silence
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Published: 18 November 2025 | Reviewed: 18 November 2025
(3-minute read)
Case Study: H Lundbeck A/S & CNS Pharma Pty Ltd v Sandoz Pty Ltd [2022] HCA 4 - Perspective 4
The Limits of a Duty to Warn About Uncertain Future Events
In H Lundbeck A/S v Sandoz Pty Ltd [2022] HCA 4, the High Court examined whether Sandoz misled pharmacists by failing to warn them that its generic escitalopram might infringe a patent if the patent term were later extended.
The primary judge had found Sandoz’s silence misleading.
The High Court disagreed.
The Court held:
“Sandoz’s failure to warn… did not constitute misleading or deceptive conduct.”
This conclusion rested on several points:
the extension had not been granted at the time of supply,
the risk of infringement was contingent on a future statutory decision,
Sandoz was under no obligation to volunteer speculation about a possibility,
silence is not misleading where there is no reasonable expectation of disclosure.
The case shows the boundary between commercial silence and actionable misleading conduct - a boundary often misunderstood in high-stakes disputes.
Why It Still Matters -
clients often overestimate what others ‘must’ disclose
Businesses regularly assume that:
competitors must warn them about uncertain legal risks,
silence implies safety,
the absence of disclosure amounts to deception,
their counterparty has a duty to alert them to possible future legal changes.
The High Court rejected that idea in Lundbeck.
Silence was not misleading because:
the risk was speculative,
Sandoz had no special relationship giving rise to a duty,
the law does not require prediction of future regulatory outcomes.
This reasoning extends well beyond pharmaceuticals.
It can apply to:
commercial negotiations,
intellectual property transactions,
mergers and acquisitions,
consumer products,
franchising,
financial services,
technology licensing.
The systemic risk is clear:
businesses frequently rely on assumptions about others’ duties to warn, and those assumptions may not be legally correct.
That misunderstanding can become costly, especially when strategy, or litigation, is built on expectations that others must disclose contingent future risks.
How to Avoid the Same Trap -
independence safeguards that prevent information distortion
The Clean Law safeguard most closely aligned with this risk is Independence, as explained in the Independence Statement.
Why?
Because misunderstanding about disclosure duties often arises when information is filtered through:
conflicted advisers,
referral networks paid by commission,
intermediaries with financial incentives,
editorial pressure within a single firm handling all roles.
The High Court’s message in Lundbeck is not that silence is harmless — but that silence cannot be assumed to be protective or complete.
Clean Law’s independence architecture responds to this structural problem:
No referral fees - ever
Information you receive is not filtered through financial incentives from external firms.
Clean Law does not share profits with any courtroom lawyers.Public-interest governance
We operate under ACNC-reported federal standards and annual Law Society trust-account audits, demonstrating independence in public view.
Client-side loyalty only
Our incentive structure aligns solely with your outcomes:
If YOU save, WE win; if your case DRAGS, we lose.This means information is not shaped to encourage unnecessary work, early escalation, or over-reliance on future contingencies.
Separation of roles prevents message distortion
Because Clean Law and the courtroom lawyer operate independently:
settlement and litigation information remain distinct,
strategic advice is checked before it becomes cost,
commercial assumptions are pressure-tested independently of courtroom incentives.
This structure prevents the most common real-world pathway to the misunderstanding seen in Lundbeck:
assuming someone else will disclose a remote risk when they had no obligation to do so.
Reflection
The High Court’s reasoning shows that silence is not automatically misleading, especially where the risk depends on a future, uncertain event. Many clients consider whether their current advice channels, referral pathways, or conflict settings might expose them to blind spots.
Independence is not merely an ethical concept; it is a practical safeguard against incomplete or distorted information. When a dispute turns on what parties understood, or expected to be told, independence becomes a structural asset, not an optional comfort.
Learn how Clean Law’s governance, audits and no-referral-fee architecture ensure independent advice - not conflicted or filtered guidance.
If your dispute involves questions about what should have been disclosed, clients often begin with a private, fixed-fee risk assessment.
Book a confidential appointment
By Nicky Wang
Principal Solicitor
Legal Liaison Ltd (trading as Clean Law)
Prepared in accordance with public-interest governance,
annual Law Society trust-account audits, and ACNC-reported standards.
Disclaimer: This page is intended to provide general information only and is not legal advice. The contents may not reflect the most current legal developments and do not take into account your individual circumstances. You should not act or refrain from acting on the basis of this information without obtaining legal advice tailored to your situation.
