HT-2024-000023 - [2025] EWHC 63 (TCC)

Taking account of all of these matters, I am satisfied, with some hesitation, that to the limited extent of disruption to business there is an arguable case that damages are not an adequate remedy for OPC but I consider that the matters that give rise to that hesitation are powerful factors in the balance of convenience and point strongly to the balance of convenience being in favour of lifting the suspension. In those circumstances, the further arguments as to the adequacy of damages to the ICB are of little relevance but I summarise the position as I see it.

The premise of this consideration is that the ICB has succeeded at trial and that it was right in its evaluation of DHU’s tender as the most economically advantageous. The ICB relied on what was said by Eyre J in the Medequip case as follows:

“47.

Particular considerations arise when addressing this question in the context of procurement cases where the defendant will be a public body. ….. There will, however, be circumstances where damages will not be an adequate remedy for a public body. This will potentially be the position where the contract is to provide particular services for the public or to provide those services in a particular way and where the maintenance of the suspension means that for a period of time the services will not be provided or will not be provided in the way desired by the authority. Such an impact on the provision of services by the public body in question will not be measurable in financial terms and damages would not normally be an adequate remedy for a defendant authority in those circumstances.”

The judge went on to observe at [107] to [110] that the decision of the defendant was one reached after reflection and consideration and that the councils were best placed to know how services were being delivered and whether changes would be improvements. He recognised that there would be room for debate and that improvements may not be as great as the defendants anticipated but:

“110 ….. I come back to the point that the Consortium has decided that it is beneficial for the CES to be delivered in a particular way and on particular terms. If the suspension is maintained the Consortium will not be able to implement that decision for the period of the suspension and for such time thereafter as is necessary to enable the new arrangements to be put into effect. …. the Defendant will not be able to provide the services in the form and on the terms it wishes. That is a loss which cannot adequately be compensated in damages.”

The same observations can be made in this case and the ICB says principally that damages are an inadequate remedy where a public authority is unable to provide services in the way in which it wishes to do so.

Mr Taylor submits that ICB’s case boils down to that single point that it will suffer an unquantifiable loss of ability to operate and provide services in the way it wishes. He is, in one sense, right but that ignores the reasons the ICB wishes to proceed in this way. Mr Taylor further submits that the ICB then seeks to substantiate that case by relying on the perceived benefits of the DHU bid. But, he says, that is the core of the proceedings and OPC’s case is that there are no such benefits and that it ought to have scored more highly on technical and quality questions. The contract specification is essentially the same as the existing, so, it is submitted, the perceived benefits come from how DHU intends to perform the services and that reflects no more than the ICB’s wish as to how the services should be provided and its wishes should not be given the same deference that the defendant’s wishes were given in Medequip. OPC has responded fully to ICB’s stance in case the court intends to make findings on these perceived benefits but submitted that the court should not engage with the disputed scoring issues on this application. The difficulty with that argument is that it divorces benefit and scoring. In circumstances where the court is considering the adequacy of damages on the assumption that the ICB has succeeded at trial, the court is asked also to make the assumption that, despite the vindication of the ICB’s evaluation, there are still no benefits from the DHU bid. At the very least, and on the same argument that OPC advances on its case, the court would only have to consider whether it is arguable that the inability to enter into the contract with DHU would deprive the ICB of its benefits and, therefore, whether it is arguable that the DHU bid does offer such benefits.

OPC also relies on its evidence to the effect that it could copy DHU’s services during the currency of the interim contract. That does not provide any answer to the ICB’s case. The interim contract was entered into to secure the provision of urgent care services during the period of suspension and when it was, or must have been, anticipated by OPC, that the ICB would apply to lift the stay. There is no evidence at that time or thereafter of any concrete proposal on the part of OPC to mirror DHU’s tender or that it would deliver what DHU has offered.

In Teleperformance Contact Ltd. v Secretary of State for the Home Department [2023] EWHC 2481 (TCC), Constable J considered a similar offer to extend an existing contract and deliver (some of) the benefits of the new contract during the extension period. At [66] he said:

“(2)

I do not consider a satisfactory answer to this, as advanced by the Claimant, that they (the Claimant) will agree terms to extend the services. It is inevitable that this would in fact require a negotiated extension of services, the outcome of which is uncertain;

(3)

Whilst Mr Peachey states that Teleperformance Ltd. would be willing to extend the present agreement on the same terms until judgment was handed down, this ignores the fact that the new procurement was intended to bring benefits which could not be introduced by TCL other than pursuant to a commercial agreement. Mr Peachey accepted in terms that the proposed contracts would deliver benefits. A willingness to “enter into discussions” in relation to providing some of these benefits during any period of extension can plainly not be considered an appropriate basis upon which to concluded that SSHD will be in the same position (but for any losses which could be compensated in damages). It is entirely uncertain whether any such discussion would deliver the benefits.”

In short, I take the same view in this case.

The ICB accepts that, save in respect of KPIs, the core specification for the new contract was materially similar to the existing specification for the old contract. That does not seem to me to alter the position and does not change my view in principle. It is the manner of provision of the services which in the ICB’s view and on its evaluation (which is assumed for these purposes to be right and lawful) provides the added benefits. Ms Stansfield identifies benefits under the following headings:

In addition, under the new contract, the ICB will introduce three new KPIs with the purpose of encouraging higher standards and improving patient treatment and ongoing observation.

In light of Mr Taylor’s submission as to how the court should or should not engage with these perceived benefits, the court was provided with a table headed “Summary of the DHU Proposed Benefits At Issue in the (Proposed) Amended Particulars of Claim”. The parties also agreed to the amendments and filed a consent order. The document contained a note that:

“This document is originally produced by the Defendant to address its alternative submission that even if it were correct that when deciding the AtL, the Court cannot reach findings on the Defendant’s view of what it has identified as benefits in DHU’s tender if these benefits are also matters which are allegedly in issue in the scoring challenge in the APOC, that even on this test the Defendant relies on some benefits that are not under challenge in the APOC.”

The purpose of the table was, therefore, to identify benefits which the ICB would rely on even if the court accepted that it could not take into account anything that was subject to challenge in the Amended Particulars of Claim. The table set out the category of benefit that the ICB had referred to in its submissions. By way of illustration, managing patients back into the system was agreed to be new compared with the interim system and, although disputed, said by the ICB to be a benefit. The electronic triage system was said to have equivalence in the OPC and DHU tenders. In respect of the majority of benefits there was alleged equivalence between DHU’s future provision and the claimant’s provision under the interim contract. The table then referenced the evidence (witness and paragraph number) and the defendant’s and claimant’s positions as to whether there was a challenge in the Amended Particulars of Claim to this benefit.

I do not intend to address each and every one of these perceived benefits. A few examples are sufficient and were highlighted by Mr Halliday on behalf of DHU.

DHU’s planned provision for managing patients back into the service is materially different from what OPC currently does. To adopt a similar approach, OPC would be seeking to copy an aspect of DHU’s bid. The evidence of Ms Amias is that this is a service which DHU is already experienced in providing. For OPC to introduce a similar service it would have to engage with the ICB and other stakeholders; carry out risk assessments; develop a new service model and safety protocols; reconfigure IT systems; and retrain staff. OPC dismisses this as a minor improvement but there is at the least an arguable case that it is a benefit.

The electronic triage is an optional digital system for checking in, assessing and prioritising patients on arrival at a UCC. Patients answer questions on a tablet and the system assigns them a priority. Patients may choose an in person triage instead. But Ms Amias’ evidence is that most or many patients prefer the digital system which is quick, private and accurate and it frees up staff resources for treatment of urgent conditions such as stroke or sepsis. It, therefore, brings benefits in terms of patient safety, appropriate treatment and speed of treatment. DHU is experienced in providing electronic triage elsewhere and has developed Standard Operating Procedures and training in the system and could introduce it within 2 weeks of starting the new contract. Mr Beverley asserts that OPC could introduce the same or similar system in the same time. Counsel told the court on instructions that it would take 12 weeks. Ms Amias estimates that it would take OPC at least 8 months to introduce such a system.

Ms Amias also sets out a range of patient testing capabilities (referred to a near patient testing capabilities) which DHU will offer to improve diagnostic scope and management of patients, including high sensitivity troponin testing for early diagnoses of heart attacks and cardiac events. The range of tests will be offered to walk in patients as well as through booking by GPs, with some tests available on a same day basis. Mr Beverley responded that OPC offers, or will offer, all but one of these testing capabilities but did not address the manner of provision on which Ms Amias relied.

As I indicated, I have not set out these benefits in any greater detail for a number of reasons. Substantial elements of them are regarded as confidential and some are almost impossible to articulate without reference to that confidential information. The offer by the claimant to provide the same benefits implicitly recognises that there are such benefits. At the same time, there is a legitimate concern expressed by the ICB that that would involve reliance by the claimant on confidential documents released to it only within a confidentiality ring. I would add that there is also a legitimate concern of DHU that the claimant could only provide services in a way which matches DHU by copying DHU’s tender and there is, in my view, a legitimate concern that the claimant would benefit from DHU’s confidential information in that it would be able to rely in future bids on its experience of providing services in the manner of DHU. OPC’s answer to this concern is to assert that any healthcare innovations and improvements should be widely shared. Laudable though that view may be, it is wholly inconsistent with the concept of confidential commercial information. Further, the consideration by the court in any detail of these perceived benefits would trespass well into the substantive issues as to evaluation but there is no need to do so because they represent the way in which the ICB wishes to provide the services and have services provided and I repeat what I said above about the decision in Medequip.

Mr Taylor made reference to the decision of Fraser J in Lancashire NHS Foundation Trust v Lancashire County Council [2018] EWHC 200 (TCC) in which he found that damages would be an adequate remedy for the defendant council. At [5], the judge set out that the two bidders pricing was almost identical and that the difference of 4% in the quality evaluation of the bids, in fact, represented only 2 marks. He found that damages would not be an adequate remedy for the claimant Trusts who were the incumbent providers of children’s services – not only would there be the inevitable re-organisation of staff but the Trusts had only recently re-organised and further re-organisation and the financial loss would make it difficult for them to maintain other contracts for similar services. Then at [42] – [43[, he said:

“42.

On the other hand, damages would be an adequate remedy for the Council. Given the very slim difference in the costs of provision of the Services by (sic) the Council compared to Virgin, the successful bidder, the financial differential would in any ever either be small or non-existent, But even if that were not the case, the actual services would remain uninterrupted up to the date of judgment in the proceedings, and there would be essentially an accountancy type exercise to compare and compute the financial loss after a trial. That is an entirely different matter, and of a different nature, to the damage that would be caused to the Trusts were the suspension to be lifted and the Trusts succeed at trial.

43.

I consider the inadequacy of damages to the Trusts to be conclusive on this application. However, in case I am wrong about that, I will also provide my short conclusions on the issue of balance of convenience. …. The only point in the Council’s favour is its stated intention and preference to bring Virgin on board as soon as possible, together with the mobilisation period required by that provider. … Given the nature of the services, their subject matter, and the sector of the population for which they are provided (the children and young people of Lancashire) and the importance to the public interest of these Services, a desire by the Council to get on with the new contract (although entirely understandable) does not weigh in the balance. ….”

It seems to me, therefore, that this case was very different from the present, in which the potential damage to the ICB is not only financial and that is not the sole of primary reason for its desire to get on with the new contract. Rather, the ICB considers, albeit this is disputed, that there are qualitative benefits to be achieved from the new contract. The decision in the Lancashire case does not establish some principle that the ICB’s wishes or its reasons for those wishes cannot weigh in the balance and, in my view, they should be given considerable weight for the reasons that were expressed by the court in Medequip.

Returning to the way in which the court should approach the argument as to benefits, I also do not acceptthat the court is constrained, in considering the potential loss or detriment to the ICB, to confine itself to matters that are not the subject of a challenge by the claimant. At this stage of the test, the court is considering whether, if the ICB succeeds in its case, it will suffer a loss that cannot be compensated in damages. As I have already indicated, if the answer to that is said to be that the putative new contract is no better than the contract that would result from the claimant’s tender, the court would find itself in the position of having to assume that the scoring challenge has failed but that the putative new contract would have no benefit for the defendant anyway. In this case, the comparison is made against the continued interim contract and the position is made even more convoluted by the apparent acceptance by the claimant in the evidence that it could provide the services in the same way as DHU. That serves to reinforce the fact that the court is entitled to have regard to how the defendant wishes the services to be provided which in this case would be under a new contract with a new provider and not under a contract with an incumbent that is being varied on an uncertain basis.

The ICB further relies on the fact that the claimant has, during the period of the interim contract, failed to meet a Key Performance Indicator (KPI 8) (time to triage being 20 minutes or under for 95% of patients). That KPI was not met from October 2023 to March 2024 and again in May 2024 (by a small margin). Even allowing for winter conditions, that is some evidence that patient care is falling below standards and will continue to do so during the interim contract. Ms Amias on behalf of DHU explains in her evidence that it does not follow that a UCC will struggle during times of increased attendance. She states that DHU met even more stringent targets when the activity in one of its UCCs was over plan and the relevant local hospital was also experiencing a surge. Whatever the merits of the performance of DHU elsewhere, the management of periods of increased attendance – and the winter period is an obvious one – must necessarily be part of the management of the services and performance of the UCC; the KPI is not differently defined or set for the winter months or other periods when the demand for services may be greater; and it seems to me that the ICB is right to express concern about failure to meet a KPI of this nature and to regard the loss that it causes as one that cannot be met in damages. It is also the case that triaging is one of the areas where the contract with DHU would bring noticeable changes in terms of the electronic triage system which has already been identified by the ICB as one of the benefits of the proposed new contract.

Although for the reasons I have given, I have not undertaken a mini-trial on the issue of the merits of the case as to the benefits that the new contract would bring, I bear in mind what was said by Akenhead J in Solent NHS Trust v Hampshire County Council [2015] EWHC 457 (TCC) at [38]:

“It would be unfortunate not to say tragic if even one person died or suffered unavoidable serious physical harm or metal deterioration as a result of unavoidable delays in the provision of improvements planned by the new contract …. I do not think that the Court should take risks with people’s lives and health; by this I do not infer that Solent, if it continued under the existing regime would put “service users” lives at risk but I do infer that the integrated and improved service to be provided under the new contract has a better chance of better outcomes and it would be wrong to risk “service users” not having the benefit of those improvements as soon as possible.”

Taking together the regard to be had to the ICB’s wish to provide services in a particular way, the apparent benefits of the DHU provision, the experience that DHU has in this respect, and the time that it would take OPC to mirror this provision (even accepting that it could do so), to maintain the suspension carries with it the risk that patients will be deprived of those benefits for an avoidable reason. That is both a loss to the ICB that cannot be compensated in damages and weighs very much in the ICB’s favour in the balance of convenience in any event.

I deal with this shortly as I have already indicated my views. As I have said, I have hesitated in concluding that there is an arguable case that damages are not an adequate remedy for OPC because of the likelihood that it will continue to operate and be properly compensated in due course in damages. The probability that the ICB will suffer loss which cannot be compensated in damages is far greater as it will be unable to provide what it considers the better services during the suspension and they are services which are intended to improve patient care. The balance of convenience is firmly in favour of lifting the suspension.

OPC places reliance on the different decision of Fraser J in the Lancashire case but, as I have said, that decision reflects the particular facts of that case rather than establishing any principle of more general application. Similarly reliance is placed on the decision of Carr J in Counted4 CIC v Sunderland City Council [2015] EWHC 3898 (TCC). That case concerned a procurement for the provision of substance misuse treatment services and the claimant company had been established solely for that purpose and had been the incumbent provider since 2008. In addressing both the adequacy of damages as a remedy for the claimant and the balance of convenience, the court found that the claimant had a highly and uniquely trained workforce, which it had taken years to develop, with skills not available in the wider market. This would be lost to the claimant and cause irremediable harm. Despite the evidence as to potential cost cutting, the position is very different in this case, where it is the central administrative team that may be lost to OPC and there is no significant evidence of any unique skills. Further, in Counted4, there was in contrast, no evidence at all that the defendant would suffer any damage is the suspension were not lifted. Again that is not the position here. In short, each decision turns on its own facts and neither of these authorities, and the approach of the court in these cases, displaces my view as to where the balance of convenience falls in the present case.

Mr Halliday submitted that this application could be dealt with without any consideration of the matters that I have addressed for the simple reason that OPC had failed to offer any undertaking in damages at all to the ICB and only a partial and capped undertaking to DHU.

Mr Halliday relied on the general requirement set out in paragraphs 5.1 and 5.2 of PD25A. These paragraphs provide that, in the case of an interim injunction, unless the court orders otherwise, the order must include an undertaking in damages by the applicant in respect of the respondent’s losses and the court must consider whether to require an undertaking in respect of losses of a third party. These provisions are indicative of the approach the court will take in respect of all injunctions and his analogy is with the suspension that operates to prohibit the ICB from entering into a contract with DHU.

More on point, it seems to me, is the observation that it is, as counsel put it, absolutely routine for cross-undertakings to be required as a condition of maintaining the automatic suspension. A slightly modified version of that submission was that it was almost invariably the case that a cross-undertaking was required. No case involving a commercial body was referred to in which the cross-undertaking had not been required. In Camelot UK Lotteries v The Gambling Commission [2022] EWCA Civ 1020 at [12], Coulson LJ stated that the case that the suspension should be continued had been “fundamentally flawed as a result of the failure by the Camelot companies and by IGT to provide the usual cross-undertaking as to damages.”

Mr Taylor sought to rely on the decision in Counted4 in which Carr J did not require an open-ended undertaking in damages and regarded a limited undertaking both as sensible and as striking the appropriate balance. The position of the parties was very different from the present. The claimant was a not-for-profit organisation and, as I have said, had been established specifically to provide substance misuse treatment services to the defendant. OPC, however commendable its expressed aims in the provision of healthcare services, is a trading company with shareholders to whom dividends are paid and the wherewithal to make substantial loans to associated companies.

The only reason given by OPC for not offering any cross-undertaking in respect of ICB was that its losses were highly speculative. However, the position has to be considered on the basis that the ICB has succeeded at trial. If it has done so then it will in some measure have established that it was right to regard the DHU bid as the one that scored highest and substantially higher than the OPC bid and was the most economically advantageous. There is then good reason to conclude that DHU would provide better services which would reduce attendance and cost less. That is not highly speculative. In any event, as Ms Coyne submitted, whether there was, in fact, any loss is an issue to be determined if the undertaking is called upon and not in advance. Save in an obvious case (and it is difficult to envisage one), the court ought not to be asked to determine on an application to lift whether there is likely to be any loss and cannot proceed on the basis that, if there might not be, no cross-undertaking should be required. Mr Beverley indicated in his statement that, if the court thought differently, further consideration might be given to the provision of an undertaking but it is the function of the court to decide the application before it and not to suggest how the claimant might approach it.

In any event, by the time of the hearing, OPC’s position had shifted. In Mr Taylor’s written submissions, he stated that OPC would provide a cross-undertaking that:

“if following a trial at which OPC is unsuccessful and the Contract Award is not set aside, ICB can demonstrate a direct causal connection between a performance failure by OPC during the period from the order maintaining the automatic suspension to judgment following trial and an increased cost to ICB then it will pay the cost.”

That appears to be a cross-undertaking as to damages that seeks to determine in advance any issue as to causation of loss.

Ms Stansfield in her evidence explains the financial loss that the ICB anticipates from the continuation of the suspension. The first element is the difference in payments to the new UCC provider and the claimant with lesser payments being driven by improved services, in particular reducing repeat attendances. The second element flows from reduced attendance at other primary and urgent care services within the ICB’s areas. Whether there are such losses and whether they were caused by the maintenance of the suspension would be a matter for the court in due course and it seems to me to add a layer of complication to seek to define what that means at this stage and limit the cross-undertaking accordingly.

In the case of DHU, the evidence of Ms Amias sets out three heads of loss. There is the potential that, if the suspension remains in place until judgment, the ICB may then decide not to proceed with the contract, for example due to changes in policy or budget, such that DHU will suffer the loss of profit on the contract. Even if the contract is entered into with DHU, there is a delay in receipt of profits. Delay is causing DHU to incur additional staffing costs, in anticipation of signing a new contract, by holding on to the staff it will require to mobilise and deliver the new contract.

Prior to the hearing, OPC had offered no undertaking in respect of the second and third heads of loss but only in respect of the first. That was capped in an amount which represented, on DHU’s case, approximately one fifth of its potential loss of profit. In Mr Taylor’s written submissions for the hearing, a capped offer was made in respect of the second head of damages.

Following the hearing, OPC’s solicitors wrote to the court stating that due to time constraints, counsel had not had time to address the court on the revised offer of a cross-undertaking. In a long hearing, no additional time was sought to do so. The revised offer extended to the third head of loss but remained capped at a little more than the figure previously offered. DHU’s solicitors responded the following day pointing out limitations in the manner in which the heads of loss were described. They made the points both that a cross-undertaking is not normally limited to specified heads of damage – the heads of damage had been identified to demonstrate how DHU might suffer loss not to define the scope of the cross-undertaking – and the cross-undertaking was still capped. Both those points were well-made.

The absence of the offer of a standard cross-undertaking in damages to either the ICB or DHU is the strongest reason, if not the sole reason, to grant the application to lift the suspension.

The application for expedition was made on 10 June 2024, that is over 5 months from the issue of proceedings and well after the application to lift had been made. It is suggested by the ICB that it is a late tactical application. I agree.

In any case, there are no features of this case which point to the need for expedition. Once the decision to lift the suspension has been made, the only reason to expedite the hearing would be the risk that the claimant would fail financially and cease to exist before trial, a risk which is unrealistic. In any event, the complexity of the case and the scope of the issues raised inevitably mean that it will involve a lengthy trial with the concomitant preparation and the demand for substantial time for judgment. Even for this hearing, the bundle ran to nearly 2000 pages with lengthy witness statements and exhibits. Although the subject matter is different, it is indicative of the way in which this litigation will be conducted by all parties. The ICB’s estimate of a 15 day trial is, on the face of it, reasonable and the court could not list such a trial on an expedited basis other than by prejudicing other court users who expect a trial in 2025.