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

Fecha: 13-Nov-2024

THE LAW

THE LAW

Automatic Suspension

36.

The applicable legal principles relevant to the Defendant’s application to lift the automatic suspension are not in dispute in any significant way between the parties. The following summary is taken from the skeleton argument of Mr Williams, leading counsel for RHH.

37.

The commencement of proceedings brought into effect the automatic suspension under Regulation 95(1) of the 2015 Regulations, preventing OGL from entering into the contracts with Aaron.

38.

The automatic suspension may be lifted by the Court as provided by Regulation 96 of the 2015 Regulations:

(1)

In proceedings, the Court may, where relevant, make an interim order –

(a)

bringing to an end the requirement imposed by regulation 95(1);

(b)

restoring or modifying that requirement;

(c)

suspending the procedure leading to –

(i)

the award of the contract; or

(ii)

the determination of the design contest,

in relation to which the breach of the duty owed in accordance with regulation 89 or 90 is alleged;

(d)

suspending the implementation of any decision or action taken by the contracting authority in the course of following such a procedure.

(2)

When deciding whether to make an order under paragraph (1)(a)-

(a)

the Court must consider whether, if regulation 95(1) were not applicable, it would be appropriate to make an interim order requiring the contracting authority to refrain from entering into the contract; and

(b)

only if the Court considers that it would not be appropriate to make such an interim order may it make an order under paragraph (1)(a).

(3)

if the Court considers that it would not be appropriate to make an interim order of the kind mentioned in paragraph (2)(a) in the absence of undertakings or conditions, it may require or impose such undertakings or conditions in relation to the requirement in regulation 95(1).

…

(5)

This regulation does not prejudice any other powers of the Court.

39.

It is now well established that the applicable principles to an application to lift the automatic suspension are those set out in American Cyanamid v Ethicon [1975] AC 396 as explained in Covanta Energy Ltd v Merseyside Waste Disposal Authority [2013] EWHC 2922 per Coulson J (as he then was) at [34] and [48], and summarised by the Court in Alstom v Network Rail Infrastructure Ltd [2019] EWHC 3585 (TCC) at [29] (see further, the explanation of the legal principles provided by Fraser J in Lancashire Care NHS Foundation Trust & Anor v Lancashire County Council [2018] EWHC 200 (TCC) at [14] to [30])). Accordingly, the Court must consider the following issues (Draeger Safety UK Limited v The London Fire Commissioner & Anor [2021] EWHC 2221 (TCC) at [21])):

(1)

Is there a serious issue to be tried?

(2)

If so, would damages be an adequate remedy for the claimant if the suspension were lifted and they succeeded at trial; is it just in all the circumstances that the claimant should be confined to its remedy of damages?

(3)

If not, would damages be an adequate remedy for the defendant if the suspension remained in place and it succeeded at trial?

(4)

Where there is doubt as to the adequacy of damages for either of the parties, which course of action is likely to carry the least risk of injustice if it transpires that it was wrong, that is, where does the balance of convenience lie?

Serious issue to be tried

40.

The test for establishing that there is a serious issue to be tried is whether the Court is satisfied that the claim is not frivolous or vexatious. In Bristol Missing Link Ltd v Bristol City Council [2015] EWHC 876 (TCC), Coulson J (as he then was) held at [33] that:

…in the ordinary procurement case, where there may be points to be made on both sides, it will often be unproductive for the parties (and a waste of judicial resources) to spend a good deal of time arguing about the merits or otherwise of the underlying claim. The threshold is, after all, a low one: see The Newcastle upon Tyne NHS Foundation Trust v Newcastle Primary Care Trust [2012] EWHC 2093 (QB).

41.

Coulson J further held at [34] 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.

Adequacy of damages

42.

On the issue of the adequacy of damages in the procurement context, the following relevant guidance can be derived from the authorities (see Bristol Missing Link Ltd at [49]): (Footnote: ³)

(1)

If damages are an adequate remedy, that will normally be sufficient to defeat an application for an interim injunction, but that will not always be so.

(2)

The Court must assess whether it is just, in all the circumstances, that the claimant be confined to its remedy of damages.

(3)

If damages are difficult to assess, or if they involve a speculative ascertainment of the value of a loss of a chance, then that may not be sufficient to prevent an interim injunction.

(4)

In procurement cases, the availability of a remedy of review before the contract was entered into, is not relevant to the issue as to adequacy of damages, but it is relevant to the balance of convenience.

(5)

The difficulty of assessing damages based on the loss of a chance and the speculative or ‘discounted’ nature of the ascertainment, has been a factor which the Court has taken into account in concluding that damages would not be an adequate remedy.

43.

I return below to the authorities on when adequacy of damages as a remedy will justify lifting of the automatic suspension on a procurement process.

Balance of convenience

44.

In Bristol Missing Link Ltd Coulson J identified at [48] four elements of the balance of convenience that need to be considered on an application to lift the automatic suspension:

(1)

The adequacy of damages;

(2)

The importance of the remedy of review;

(3)

The advantages and disadvantages to the parties if the suspension is not lifted; and

(4)

The advantages and disadvantages to the parties if the suspension is lifted.

45.

The Court in Alstom Transport UK Limited at [51] provided the following relevant guidance for determining where the balance of convenience lies:

(1)

The Court should consider how long the suspension might have to be kept in force if an expedited trial could be ordered.

(2)

The Court may have regard to the public interest.

(3)

The Court should consider the interest of the successful bidder, alongside the interests of the other parties.

(4)

If the factors relevant to the balance of convenience do not point in favour of one side or the other, then the prudent course will usually be to preserve the status quo (or, perhaps more accurately, the status quo ante), that is to say lift the suspension and allow the contract to be entered into.