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

Fecha: 20-Feb-2025

Prestigious Contract/Loss of Reputation/Irreparable Harm

Prestigious Contract/Loss of Reputation/Irreparable Harm

25.

Both Claimants rely upon the fact that, they say, the New Contract is a large and prestigious one. Neither Claimant suggests that loss of this contract would be an existential threat to their business.

26.

There are a number of cases where the contract has been perceived as highly prestigious and that this has contributed to a greater or lesser extent to the conclusion that damages would an inadequate remedy for the unsuccessful bidder: see Alstom Transport v Eurostar Internation Limited [2010] EWHC 2747; DHL (above), specifically in the context of the Existing Contract; Bombardier Transportation UK Limited v London Underground Ltd [2018] EWHC 2926 (TCC); Vodafone Ltd v Secretary of State for Foreign, Commonwealth & Development Affairs [2021] EWHC 2793 (TCC); NATS (Services) Limited v Gatwick Airport Limited [2014] EWHC 3133 (TCC).

27.

It is nevertheless to be remembered that, as Coulson J (as he then was) pointed out in Sysmex (UK) Limited v Imperial College Healthcare NHS Trust [2017] EWHC 1824 (TCC), [2017] All ER (D) 155, merely because the contract in question is large and/or prestigious, that does not somehow mean that, necessarily, a failure to win it cannot be compensated for in damages. The relevance of whether the contract is particularly prestigious or high value feeds into the question of whether the failure to win the tender is likely to damage the tenderers’ reputation in the marketplace and/or make it harder for the tenderer to win other bids in the future, such that the tenderer will suffer financial losses which would be irrecoverable as damages. In this context, I remind myself of the helpful observations of Stuart-Smith J (as he then was) in Openview Security Solutions Limited v London Borough of Merton at [39]:

"What then are the criteria to be applied before a court accepts that ‘loss of reputation’ is a good reason for holding that damages which would otherwise be adequate are an inadequate remedy for American Cyanamid purposes? In the absence of prior authority directly in point (none having been cited by the parties) but with an eye to the approach adopted by the Court in Alstom, DWF and NATS I suggest the following:

Loss of reputation is unlikely to be of consequence when considering the adequacy of damages unless the Court is left with a reasonable degree of confidence that a failure to impose interim relief will lead to financial losses that would be significant and irrecoverable as damages;

ii)

It follows that the burden of proof lies upon the party supporting the continuance of the automatic suspension and the standard of proof is that there is (at least) a real prospect of loss that would retrospectively be identifiable as being attributable to the loss of the contract at issue but not recoverable in damages;

iii)

The relevant person who must generally be shown to be affected by the loss of reputation is the future provider of profitable work.”

28.

Whilst the more prestigious a contract is the more readily a Court may be to conclude that its loss will produce collateral negative financial effects beyond a direct loss of profit, that does not obviate the need for a claiming party to provide by way of evidence a proper foundation upon which a Court can conclude to the appropriate degree of certainty not just that the contract is prestigious or high value, but that its loss will lead to financial losses that would be significant and irrecoverable as damages. What evidence a Court might expect to see will differ from case to case.