HT-2024-000378 - [2025] EWHC 354 (TCC)

First, Mr Coppel KC, for DHL, relies heavily upon the fact that O’Farrell J was persuaded in DHL that the Existing Contract was a prestigious and high value one and that, as a result, damages were likely to be inadequate for DHL. At paragraph 46, the Judge said:

“I accept Mr Jones’ evidence that the loss of this contract is likely to have a substantial adverse effect on [DHL’s] reputation which would be very difficult properly to quantify. The logistics contract is prestigious and high value. [DHL] is the incumbent provider of the logistics services. The fact that the MSA has been broken into a number of separate contracts does not detract from the fact that [DHL] will be seen in the marketplace as having lost a valuable contract for the provision of these services in a procurement exercise where the outcome is not determined solely on price. [DHL] will lose a unique selling point when bidding for other, similar projects that is likely to affect its ability to win them.”

It might immediately be observed that the basis for at least some of what O’Farrell J concluded reputationally rests on the perception created by DHL having lost the contract, as the previous incumbent. That is no longer the case, of course (although it may be relevant to Unipart’s position). To this extent, Mr Coppel KC is not right that the facts as they are before me cannot be distinguished from those considered by O’Farrell J; they can. More significantly, however, the evidence before O’Farrell J was the evidence before her; and the evidence before me is the evidence before me. Indeed, I do not know what the evidence was in any real detail, other than the conclusion that O’Farrell J drew from it. The size of the companies, the market share, and the global and domestic logistics markets have all changed in the intervening 7 years. The extent or nature of any reputational risk is a question of fact for me to decide on the evidence before me. Contrary to Mr Coppel KC’s submission, I am plainly not bound by O’Farrell J’s finding of fact, made at a different time on different evidence. It is not for Ms Sloane KC to ‘distinguish’ the decision as though, if she did not do so, it would be binding on me (any more than it is for Mr Coppel KC to ‘distinguish’ the present facts from those which led O’Farrell J to determine, against DHL, that (a) damages were not adequate for SCCL and (b) the balance of convenience lay with lifting the suspension and allowing the contract with Unipart to proceed).

As it happens, I agree that this is plainly a prestigious contract. It is also of very high value, at least in absolute terms. It is common ground that if extended beyond the base period, and if all the options are taken up by SCCL, the value could be in the region of £4.4bn and could last for over a decade. Although SCCL respond that the base value, without extension or options, would be £1.26bn, representing about £200m a year out of an annual logistics market value of around £16bn a year, it is fair for the purposes of this exercise to use the figure advertised by the Defendant in its Contract Notice.

That is not the end of it, though. A particular feature of the present case is that DHL lost the procurement of the Existing Contract, which was, as O’Farrell J described, (also) prestigious and high value. In these circumstances, I accept Ms Sloane KC’s submission that it would be anticipated that in the particular circumstances of this case DHL should be able to go well beyond broad assertions as to the reputational impact of losing a prestigious tender, and give some real examples of how, in fact, things transpired following loss of the bid for the Existing Contract having been the incumbent provider. Perhaps surprisingly, there is no such evidence at all within the first witness statement of Mr Peacock. It is this absence, pointed out by Mr New, which Mr Peacock sought to address in his Second Statement.

At paragraph 6 of his Second Statement, Mr Peacock asserts generically that being the provider of the logistics services contract for SCCL gives the chosen supplier a huge advantage in the wider health and life sciences market, including other NHS and healthcare suppliers. However, this assertion cannot be taken at face value: the history of this particular contract and its predecessor tells the opposite story. DHL was the incumbent in 2017, yet it lost the bid for the Existing Contract. Unipart was the incumbent in 2024, yet it lost the bid for the New Contract. In neither case did the fact of being the provider for this very contract prove a “huge advantage”.

Paragraph 7 deliberately shies away from providing any detail on the basis of ‘obligations of confidentiality’ and adds little. Those obligations of confidentiality would not have prevented concrete, if anonymised, examples of particular difficulties or advantages had DHL wished to do so. At paragraph 8, Mr Peacock claims that a long-term contract with SCCL would be the bedrock of operations for any winning bidder, but does not give any practical detail of what actually happened negatively to DHL when that bedrock was removed. Did it in fact have to make people redundant? How many? Were specialist skills lost as a result? What other specific issues in fact arose which impacted their ability to bid for new work? What specific bids did it go on to lose that can be (even anecdotally) attributed to the loss of the Existing Contract? The closest Mr Peacock comes to providing any evidence along these lines is where, at paragraph 9, he states that he ‘understand[s] from my colleagues within the business that DSC did find it harder to win healthcare and other public sector contracts after losing the previous SCCL logistics contract in 2018 and the loss of the 2018 contract was the start of a wider decline in [DHL]’s market position in the healthcare sector.’

However, rather than substantiate this, he continues by way of speculation: ‘There are a number of reasons why that might be so….’. The asserted decline, if established, would be a key piece of evidence and would go a long way to providing a reasonable degree of confidence that there was in the past a real but unquantifiable impact to losing the SCCL contract. As Mr Coppel KC accepted, this point should have been capable of easy substantiation with clear financial data. Yet none has been provided. Indeed, Mr New provided the accounting information for DHL (specifically the Claimant, not the DHL Group) over the past 7 years in terms of turnover and profit. It is characterised by him as demonstrating that DHL has continued to deliver impressive financial results annually since 2017-18, COVID aside. Mr Peacock, in response to this information, did not dispute Mr New’s characterisation, which on the numbers appears to be a fair one. The accounting information does not, at least on its face, suggest DHL obviously suffered financially in the years after 2017-18 (taking COVID into account), following the loss of the SCCL logistics contract to Unipart. If it did not suffer irrecoverable loss when it failed to win the Existing Contract, particularly having been the incumbent, there is no basis to presume that, notwithstanding the prestigious nature of the contract, it will do so now. This may be because of growth in other areas, which may have been made possible by the availability of resources following the loss of the Existing Contract tender. It may be that because DHL has such a significant share of the market, it has plenty of other high value and prestigious contracts by which to demonstrate its capabilities without the NHS logistics contract. It is not necessary to speculate. The burden is on DHL, and on the evidence before me (and taking account of the absence of evidence which could have been provided but has not), DHL has not established to a reasonable degree of confidence that, notwithstanding the prestigious and high value nature of the New Contract, any reputational impact such as there may be will lead to financial losses that would be significant and irrecoverable as damages.