HT-2024-000271 - [2024] EWHC 3039 (TCC)

The Conflict Challenge

In breach of the obligations arising, in particular under regulations 18 and 24 of the 2015 Regulations, and in breach of the implied Tender Contract and the procedure set out in the ITT, the Defendant’s Procurement and Commercial Lead, Ms Emma Nicklin, who was responsible for and involved in the management and procurement of the Defendant’s contracts, left the Defendant’s employment in or about December 2023, after the commencement of the Procurement in June 2023 but before the deadline for submission of tenders in March 2024, and became a board director of the parent company of the preferred bidder, Aaron Services Limited, which thereby became privy to knowledge of the tender evaluation process, including possible model answers, which were unknown to all other tenderers.

Although, pending full disclosure by the Defendant, the Claimant is unaware of whether Aaron Services Limited declared at Appendices 1 and 2b of its tender the conflict of interest which had arisen and/or any canvassing or soliciting which had occurred, the Defendant was at all material times aware, at the very least, of the potential for a conflict of interest and, in breach of regulations 18 and 24 and the terms of the implied tender contract, it failed to take any measures to effectively prevent, identify or remedy the conflict of interest which had arisen in the conduct of the procurement and instead allowed Aaron Services Limited to tender in a manner which distorted competition and did not ensure equal treatment of all tenderers.

Paragraph 32 is denied. There is no proper basis to allege conflict of interest. Without prejudice to the foregoing, Orbit relies upon the following:

Until Emma Nicklin’s resignation in October 2023 (and subsequent departure in January 2024) from her employment with Orbit, she was Head of Commercial Delivery, with her role being related to commercial delivery and contract management. For the avoidance of doubt, she was purely involved in the commercial side of Orbit’s business and her role was not procurement related;

In January 2024, upon her departure from Orbit, Ms. Nicklin moved to, and is employed by Sureserve Group, not Aaron. Ms Nicklin's last day of employment with Orbit was 9 January 2024, prior to the issue of the ITT on 29 January 2024;

In respect of the Procurement, Ms. Nicklin played no role and was not involved at all in the design and management of the Procurement. The Procurement was designed by an interim Procurement Business Partner contracted to Orbit at the time, in close collaboration with Orbit’s procurement team (of which Ms. Nicklin was not a part);

Ms. Nicklin gave notice of her resignation from Orbit in October 2023, prior to the commencement of the Procurement on 8 November 2023. Notwithstanding that she was not involved in the Procurement, Orbit took steps to ensure that no conflict of interest could arise in respect of the Procurement and in respect of other projects and commercially sensitive matters. By 31 October 2023, Orbit removed Ms. Nicklin’s access to her commercial email address, had suspended her membership of Orbit’s internal assurance and approval board (known as the Commercial Group Board) and restricted her access to commercial and sensitive data.

23 In the premises, it is denied that there is any basis for the allegation that, by reason of Ms. Nicklin’s employment with Orbit and then Sureserve Group or otherwise, Aaron became privy to knowledge of the tender evaluation process not known to the other bidders. Such an allegation amounts to no more than pure speculation. It is further denied, as alleged in paragraphs 40, 51, 57, 64, 70, 76, 92, 98, 104, 110 and 111, that Orbit breached its duty of equal treatment or otherwise acted unlawfully in awarding a maximum score of 5 following evaluation of the answers submitted by Aaron as part of its tender. It is pure speculation that this evidenced that Aaron had been privy to information not known to the other bidders.

Paragraph 33 is denied. It is averred that Aaron did not declare any conflict of interest in Appendices 1 and 2b to the ITT in the submission of its tender. It is denied, insofar as it is alleged, that it was required to do so and/or that Orbit acted unlawfully in not disqualifying Aaron from the Procurement by reason of Ms. Nicklin's employment with Sureserve Group.

Paragraphs 22.1 to 22.4 are not admitted, as being matters within the knowledge of the Defendant and Ms Nicklin alone and the Defendant is put to strict proof of the matters alleged therein. Without prejudice to the generality of the foregoing, the Claimant will aver:

That Ms. Nicklin’s official job was advertised as and was “Procurement and Commercial Lead”, as averred in paragraph 32 of the Particulars of Claim;

That, on the Defendant’s case, Ms. Nicklin did not give her resignation notice to the Defendant until October 2023, long after the procurement procedure had been commenced in June 2023;

That, further on the Defendant’s case, Ms. Nicklin remained in post until 9th January 2024, after the Contract Notice was issued on 13th November 2023 and during the period when the contract documentation was being drafted and prepared before being issued to tenderers on 29th January 2024;

That it is admitted by the Defendant that Ms. Nicklin did join the Sureserve Group, the parent company of the successful tenderer, Aaron Services Ltd, as averred in paragraph 32 of the Particulars of Claim;

That following her departure from the Defendant and her taking up a post within the Sureserve Group, but before the original award decision was notified by the Defendant on 23rd July 2024, in May 2024, Ms. Nicklin indicated to the Claimant that, a company in the group of her new employer was very likely to be awarded the contract or contracts for which it had tendered;

That it is to be inferred that this was stated as a result of information in relation to the tender procedure which Ms. Nicklin had gained as a result of her employment with the Defendant and was able to and did pass on to the successful tenderer, within the Sureserve Group;

As to paragraph 23, it is repeated and averred that the Defendant has refused to provide the Claimant with any disclosure of the tender evaluation documentation in respect of the tender submitted by the successful tenderer, Aaron Services Ltd.

The admission in the second sentence of paragraph 24 is noted. It is averred that the Defendant was aware of this conflict of interest and, based on the information provided by Ms. Nicklin to the Claimant, the Defendant should, at the very least, have sought clarification of the declaration made by Aaron Services Ltd in Appendices 1 and 2b to the ITT in the submission of its tender and of what steps had been taken by it to prevent a conflict of interest and/or any unfair advantage from arising and, in the absence of a proper explanation of such steps, should have disqualified its tender.

I am however able to address the grounds relating to the alleged conflict of interest (the first and third grounds of challenge), and my direct knowledge of these matters has been supplemented by information provided to me by Mr Van Kampen:

41 For the reasons set out above, I do not consider that any conflict of interest in respect of Ms Nicklin could have arisen. The grounds of claim reliant on an alleged conflict of interest are therefore unsustainable.

I also understand there to be a serious issue to be tried in respect of RHH’s conflict of interest claim concerning Miss Nicklin, which is addressed by Mr Warwick at paragraphs 39 to 41 of Warwick1.

Miss Nicklin is a former employee of Orbit, who from the beginning of 2024 became an employee of the Sureserve Group (the owner of the successful bidder, Aaron Services). This was after the commencement of the Procurement in June 2023, but before the deadline for the submission of tenders in March 2024.

RHH contends that Miss Nicklin’s employment at Orbit and later the Sureserve Group, gave rise to an unlawful conflict of interest. By virtue of her previous employment at Orbit, she would have been privy to knowledge of the tender evaluation process which would have given an unfair advantage to the successful bidder, Aaron Services. For example, Miss Nicklin may well have had access to model answers. I note that Orbit has conspicuously failed to say whether Miss Nicklin had access to model answers, despite this point being raised in paragraph 32 of RHH’s Particulars of Claim.

Various titles have been assigned to Miss Nicklin in relation to her employment at Orbit. However, it is clear that her role(s) pertained to Procurement. In the email chain exhibited to RW1 (RELW1p.166), she is described as being “from the Procurement and Commercial Change Board”. She is described at page 38 of the power point presentation, prepared by Orbit for a Leadership Day on 10th January 2023 (where all the senior staff at Orbit were present) as representing the area of “Procurement and Commercial” (WGM1 p.806). On 22nd December 2023, Rhys Warwick provided a LinkedIn Recommendation for Emma Nicklin, saying that he has “worked with Emma for a few years”…“andmore recently reported directly to her” (WGM1 p.811). So, around the time of the Procurement, which Mr Warwick was involved in the manner (at least) explained in RW1 paragraph 7, he worked with and was reporting into Emma Nicklin.

RHH first became acquainted with Miss Nicklin in May 2022, when Martin Bird, Orbit’s “Interim Head of Procurement” at the time emailed Stuart Cocks, RHH’s former Commercial Director, on 5^thMay 2022, (WGM1 p.815-826) saying “As a matter of urgency I would like to meet with you along with our new Head of Commercial Delivery (Emma Nicklin) to talk through and give you an insight into what is happening with Orbit with Procurement and Commercial, understand the challenges you are currently facing and your views on our current partnership”. The meeting on 12th May 2022 was attended by myself, Stuart Cocks, andMichael Heath (from RHH). This was the start of the negotiations relating to RHH’s 2022Contract which Miss Nicklin managed on behalf of Orbit. During these negotiations, myself,Stuart Cocks and Michael Heath got to know Miss Nicklin well. She was always presented byOrbit, and held herself out, as being a senior level member of the Procurement and CommercialDepartment. On account of the relationship between Miss Nicklin and RHH, she came to have adetailed understanding of RHH’s business and the details of its contract pricing arrangements.

Mr Warwick says only that Miss Nicklin handed in her notice during October 2023. The precise date is not provided, but I would expect her to have a 3 month notice period, which would accord with her departure on 9th January 2024, (which I note is contrary to Miss Nicklin’s LinkedIn profile which says that she left in February 2024). If she did hand in her notice at the beginning of October 2023, there seems to me to be a long period after she handed in her notice but before her Procurement involvement and visibility was restricted in the circumstances described at paragraphs 40.2-40.9 of Warwick1.

In relation to those circumstances, with the exception of Keitlina Gashi, all those on the relevant email chain (RELW1 p.166) have left Orbit, and so there is no one there to provide a first-hand account of the precise circumstances. I also note that Mr Warwick says an “Emma Wolfe” was also involved, but there is nothing to support this.

After Miss Nicklin joined the Sureserve Group, I saw her on 8th May 2024, at the Chartered Institute of Housing Conference in Brighton. Before dinner, Miss Nicklin and I got chatting, together with some other guests at the conference, during which she said to me that she believed the Orbit tender to be “as good as secured by Sureserve”. I knew that she couldn’t mean the Sureserve Group, because it hadn’t made a bid; she clearly meant Aaron Services or K&T. This insight from Emma Nicklin was consistent with my understanding that she continued to have close involvement with and knowledge of the Procurement.

On 11th June 2024, at the ASCP Conference at Celtic Manor I engaged in conversation with employees of the Sureserve Group (although Miss Nicklin was not there) about the Procurement. Although nothing was expressly said, I had the impression that they knew something which I didn’t about the outcome of the tender being favourable to the Sureserve Group. I can only infer that this was a result of Miss Nicklin’s insider knowledge.

Later that evening, I mentioned these matters to Shelley Yeomans. A few weeks later, I heard that these matters had been reported to Eric Van Kampen, but I do not know the circumstances. Given the seriousness of these matters, I expected Orbit to formally contact me, but to my surprise no one ever has.

In summary, my understanding is that Miss Nicklin’s employment at the Sureserve Group amounted to an unlawful conflict of interest. At the very least, myself, my colleagues, and indeed others in the industry, felt that that there was an appearance of bias.

At paragraph 45 of his statement, Mr McIntosh again seeks to characterise Ms Nicklin's role at Orbit as one which was related to the Procurement. That is not correct.

although D is mindful that the court should not embark on a trial or mini-trial of the claims raised in the proceedings, those claims (properly considered) do not raise a serious issue to be tried:

The Scoring Challenge

Further, in breach of the duty of equal treatment, and despite the patent conflict which existed, the preferred bidder was awarded a maximum score of 5 (9.00%) (Excellent) for this question, thereby evidencing that it had been privy to information about the evaluation of tenders not known to other tenderers.

In my view, those passages make clear two things: first that, in cases where there are clear issues arising out of individual scores, it will be difficult for the court to conclude that there is no serious issue to be tried; and, second, that this difficulty arises, at least in part, because the relevant documents have yet to be disclosed.

Conclusion