HT-2025-000079 - [2025] EWHC 2634 (TCC)

Regulation 96(2) provides that when deciding whether to lift the automatic suspension the court must consider whether it would have granted an interim injunction preventing the relevant public body from entering into the contract if regulation 95 (imposing the automatic suspension) had not been applicable. O’Farrell J explained the approach to be taken thus in Camelot UK Lotteries Ltd v Gambling Commission [2022] EWHC 1644 (TCC) (2022) 202 Con LR 89 at [47] and [48]:

The courts have considered sundry circumstances in which it has been said that damages would not be an adequate remedy for a claimant and where it has been said that it would not be just to confine the claimant to a damages remedy. That issue is to be addressed by reference to the circumstances of the particular case and there is no general rule that damages either always will be or will never be an adequate remedy in a particular category of case.

There will be cases where the difficulties in the calculation of the damages are such that the court cannot be confident that it will be able to quantify the claimant’s loss properly and fairly. In such cases the prospect that the court will not be able properly to reflect the claimant’s loss in a damages award can mean that it is unjust to confine the claimant to its damages remedy. This can be the position where the court would have to take account not only of the lost chance of a tenderer being successful in a fair tender process but also the lost chance of it then being called upon to perform services under a framework contract (see Lettings International Ltd v London Borough of Newham [2007] EWCA Civ 1522 at [33] – [35]). It can also be the position where the allegation is that the tenders were evaluated by reference to undisclosed criteria (see Morrison Facilities Services Ltd v Norwich City Council [2010] EWHC 487 (Ch), at [31] – [34) and NATS (Services) Ltd v Gatwick Airport Ltd [2014] EWHC 3133 (TCC), [2015] PTSR 566 at [80] – [83]). Another example is that of a case where it is said that a tenderer was materially misled and where it would be necessary to analyse whether different responses in communications would have made a difference to the bid (see Covanta Energy Ltd v Merseyside Waste Disposal Authority (No 2) [2013] EWHC 2922 (TCC) at [53]).

Care is needed before the court can conclude that difficulties in the evaluation exercise mean that damages will not be an adequate remedy (see Openview Security Solutions Ltd v London Borough of Merton [2015] EWHC 2694 (TCC) at [28] – [32] and Medequip Assertive Technology Ltd v Royal Borough of Kensington and Chelsea [2022] EWHC 3293 (TCC) at [41] – [43]). It is to be remembered that the courts are well-used to determining damages by assessing the value of a lost chance and to doing so on the basis of incomplete information. It is relevant to note the high level of difficulty which has to be shown before the court will accept that damages will not be an adequate remedy. In Morrison Facilities and Covanta the court was concerned with circumstances in which the fair and proper assessment of the damages would have been “virtually impossible”. In Lettings International the court accepted that the proper quantification of the damages would be “very problematical”. In NATS Services Ltd there would have been “great difficulty in estimating the damages”.

The fact that the loss of the contract in question would harm a claimant’s prospect of obtaining other contracts and would cause a loss which would be difficult to identify can be a factor meaning that damages would not be an adequate remedy and that it would be unjust to confine the claimant to its damages remedy. However, caution is needed before the court can conclude that the loss of the contract will have such an impact. The fact that a tenderer fails to obtain a contract will not have that consequence without more even if the tenderer was the incumbent under the contract which is being replaced. Nor is it sufficient either that the lost contract was prestigious or that there is said to be an impact to the claimant’s reputation. What is required is cogent evidence demonstrating the prospect that financial loss will be suffered in circumstances where that loss will not be recoverable in damages. See NATS Services Ltd at [84] – [85]; Openview Security Solutions Ltd at [35] and following; Bombardier Transportation UK Ltd v London Underground [2018] EWHC 2926 (TCC) at [57] and following; Draeger Safety UK Ltd v London Fire Commissioner [2021] EWHC 2221 (TCC) at [35] and [41]; Kellogg Brown & Root Ltd v Mayor’s Office for Policing [2021] EWHC 3321 (TCC) at [76] and following; Camelot at [98]; and One Medicare v NHS Northamptonshire Integrated Care Board [2025] EWHC 63 (TCC) at [45].

There will be cases where the loss of a tender will cause the collapse of a business or of a substantial part of a business. The prospect of such an outcome can be a matter which makes it unjust to confine a claimant to its remedy in damages. However, such cases will be rare and the court will require detailed and cogent evidence as to the effect of the loss of the contract before accepting that a particular case was in that category (see TES Group Ltd v Northern Ireland Water Board [2020] NIQB 62 at [31] and [32]).

There will be rare cases in which a procurement claim succeeds but where the court is precluded from awarding damages because the relevant breach is not sufficiently serious to warrant such an award (see Braceurself Ltd v NHS England [2024] EWCA Civ 39, [2024] KB 913). In such a case there is scope for the argument that damages would not be an adequate remedy for a claimant which might succeed in its procurement claim but then receive no compensation. Such cases are rare and I will address below the approach to be taken in respect of that argument in the circumstances of this case.

If a serious issue has been shown and the court is not satisfied that damages will be an adequate remedy it must turn to consider the balance of convenience. The approach to be taken was summarized thus by O’Farrell J in Camelot at [126]:

“The balance of convenience test requires the court to consider all the circumstances of the case to determine which course of action is likely to carry the least risk of injustice to either party if it is subsequently established to be wrong. When determining where the balance of convenience lies:

(i)

the court should consider how long the suspension might have to be kept in force if an expedited trial could be ordered: DWF LLP v Secretary of State for Business, Innovation and Skills [2014] EWCA Civ 900 per Sir Robin Jacob at [50];

(ii)

the court may have regard to the public interest: Alstom Transport v Eurostar [2010] EWHC 2747 (Ch) at [80];

(iii)

the court should consider the interests of the successful bidder, alongside the interests of the other parties: OpenView [2015] BLR 727 at [14];

(iv)

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 to lift the suspension and allow the contract to be entered into: Circle Nottingham Ltd v NHS Rushcliffe Clinical Commissioning Group [2019] EWHC 1315 (TCC), (2019) 185 ConLR 139, at [16].”

There is a public interest in the award of public contracts being made in a lawful and transparent manner but there is also a public interest in public authorities being able to obtain the benefits which they believe flow from the contract in question (see Draeger at [49]). There will often be differing views as to the extent to which new arrangements are in fact different from those already existing and as to the extent of any benefit flowing from the changes. A mere assertion of benefit by a public body cannot close down consideration of the point but the court must proceed on the basis that the public bodies are better placed than the court to determine whether changes will be beneficial (see Medequip at [109] – [110]).

As O’Farrell J explained it is necessary to consider whether it would be possible for the trial to be expedited and to have regard to how long the suspension would last if there were to be expedition. I set out my understanding of the approach in somewhat stark terms in Medequip at [59] and the position is rather more nuanced than my language there might suggest. It is nonetheless necessary to have regard to the scope for expedition. In doing so the court must consider the extent to which expedition with retention of the suspension protecting the interests of a claimant would be practicable and would reduce the risk of injustice being caused to the public by the retention of the suspension.

The Defendant accepts that the Claimant has shown a serious issue to be tried.