HT-2020-000448 - [2024] EWHC 1185 (TCC)

The claim comprises £427,130 paid to Disclosure Scotland and £609,700 DBS internal staff costs.

The claim is supported by the factual evidence of Ms Graves, who explained in her Third Witness Statement that the R1 project was meant to have been delivered at the end of 2016 and that the issuing of Basics certificates would be performed by DBS for the first time, replacing a service that was performed for the whole of the UK by Disclosure Scotland under delegated powers. Ms Graves said that when it became clear that DBS’s Basics service would not be ready on time, DBS had to ask for an extension of the delegated powers. This meant DBS had to commit to a longstop date of January 2018, when DBS would take over the Basics Services from Disclosure Scotland. Ms Graves candidly accepted that she only had indirect knowledge of what was happening with Disclosure Scotland as a result of her conversations with Gareth Gregory who was dealing directly with the situation. Gareth Gregory did not give evidence. Nevertheless, Ms Graves recalled that Disclosure Scotland was not aware of the proposed extension to the delegated powers before it had already taken steps to reduce its own workforce and changed its facilities. This meant that between August 2017 and January 2018, DBS had to send a number of staff up to Disclosure Scotland to assist them to maintain the same volume of Basics checks. As part of this, DBS had to pay for desks/office space, communication costs at the Blantyre site (a Disclosure Scotland site) (which were recharged by Disclosure Scotland) and to rent flats to accommodate the DBS team, with travel, overtime and other expenses.

TCS advance a number of arguments. The first is that the claim relates predominantly to the post-Go-Live period, from August 2017 to January 2018, when R1-B&B went live on 7 September 2017. As a stand alone point of principle, this is not a good one. A delay in period X can plainly cause a loss in period Y. The fact that the loss is incurred in a later period does not mean it cannot be recovered as damages caused by a preceding delay.

The second argument is, however, that the reason the DBS costs were incurred was not because of the delay per se, but because Disclosure Scotland reduced its staff and facilities not knowing that DBS intended to extend the delegated powers under which Disclosure Scotland was carrying out its work. As Ms Graves accepted fairly in evidence, it was not TCS’s responsibility to liaise with DBS Scotland. Ms Graves was taken to a number of documents which dealt with discussions between DBS and Disclosure Scotland about extensions, but was unable given her lack of direct knowledge to shed light on their context.

One such document was R1 and Basic Consultation Meeting Minutes dated 14 June 2017. These stated:

Ms Graves’s evidence in relation to this was as follows (Day 14/193):

There is very little transparency within either the brief, largely second hand evidence from Ms Graves, or from the disclosed documents, to establish a proper causal link between the costs incurred in sending staff to Scotland in the latter months of 2017 and early 2018 and the delay. At best it seems clear that staff were sent to Disclosure Scotland for a number of reasons, including the need to assist with transition which is entirely unrelated to the complaints about delays. There is also no proper evidence to link the fact that DBS failed to communicate with Disclosure Scotland about the period of delegation extension in a timely way to a failure on the part of TCS (e.g. in failing properly to inform DBS of anticipated delays) as opposed to the mere fact of the delay itself. These are not matters of failure to mitigate: they are matters of basic causation. In my judgment, DBS has failed to prove a causal link between the breaches relied upon (the delay to achieve the Basics R1 Milestone) and the losses claimed, which the evidence suggests would have been incurred wholly or materially in any event.

In the circumstances, DBS’s claim in relation to Disclosure Scotland fails.