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

Ms Hannaford KC, on the basis of the evidence from Mr Pyne, also relies upon the prestigious and high value nature of the contract and the fact that it is one of the largest public sector contracts in the UK. It is contended that Unipart would suffer irreparable harm for which it is not just to confine it to a remedy in damages.

As set out above, Unipart is the incumbent and the value of the New Contract is significantly greater than the Existing Contract. I accept that the fact of lost incumbency may increase the risk of reputational damage, as pointed out by O’Farrell J when considering the adequacy of damages for DHL in the last tender for the equivalent (though smaller) contract. That said, as pointed out above, incumbency does not appear to have provided any particularly strong advantage in winning either the Existing Contract in 2017-8 or the New Contract in 2024. Unipart is a considerably smaller player than DHL and in these circumstances I accept that it is likely that the loss of a contract such as this will have a larger influence on its reputation and its catalogue of existing contracts from which it can demonstrate its capabilities.

Ms Hannaford KC also relies upon the Competition and Markets Authority’s investigation into the merger of GXO and Wincanton, and its Phase 1 report published in November 2024. As referred to at paragraph 20 of Mr Pyne’s Witness Statement, the CMA identified in a number of comments drawn from the market that experience, track record and reputation are all important, together with the scale of the operation, in the selection of logistics providers. This is no doubt correct.

However, it is in this context relevant that Unipart ‘lost’ the New Contract a year ago. In April 2024, when Unipart had already been excluded from the tender (albeit, to be fair, only recently), Unipart’s Chief Executive went on record stating, ‘With a clear growth strategy across our seven core market sectors, a robust order book and a talented, committed team of experts, I am confident in the outlook for 2024 and our next chapter of growth.’ At around the same time it described its ‘pipeline’ for 2024 to be strong. Almost a year later, Mr Pyne simply asserts that – in effect – the growth plans will be materially different in the future. However, he does not provide any examples to substantiate this assertion. Such material must exist within Unipart if it is correct.

I accept that it is foreseeable that growth plans may have to change if anticipated revenue and/or profit reduces. The financial impact of the Existing Contract coming to an end is set out by Mr Pyne in paragraph 23. Of itself, however, this is just a financial loss which is readily compensable if Unipart win. Moreover, this loss assumes that there has been no effort during 2024 to mitigate the impending termination of the Existing Contract by securing a pipeline of other work. In this context, Mr Pyne does not provide evidence, even anecdotally, of bids in the healthcare or the wider setting which Unipart has in fact lost in the past year which were or could have been contributed to by its failure to win the New Contract. It may be said that is because a company can refer to other contracts up to three years old in bids, and so it has still been possible to use the Existing Contract as evidence of its capabilities and track record. Indeed, it will be able to until 2028 or so. In this context, the remarks of Coulson J (as he then was) at [50] in Sysmex are of some relevance:

“It is fundamentally wrong in principle to say that an award of damages would not restore a reputation lost because of the rejection of a tender, but the award of the contract itself would. What would matter in those circumstances would be the public acknowledgement that their bid had been wrongly rejected, not the precise remedy which the court provides in consequence of that finding.”

It may also be that it has secured other contracts in the past few years with clients requiring similar services/scale as noted by Mr Pyne at para 16, and so is readily able to demonstrate its track record irrespective of its failure to win the New Contract. (It is right that the headline figures appear to suggest a smaller scale than the New Contract, although it is not clear if the figures are annual or over the course of the project and the description of ‘similar services/scale’ is Mr Pyne’s).

The cost cutting impact described by Mr Pyne and relied upon by Ms Hannaford KC as irreparable harm is the natural result of the (lawful) bringing to the end of the Existing Contract. The negative financial effect is said to be that, having cut staff, it will then incur increased rehiring costs. If this is so, it is a quantifiable loss which is recoverable and capable of being proven subject to causation and calculation in the usual way. There is no cogent evidence which suggests that Unipart will irremediably lose staff with such specialisms they cannot, when required, replace in the marketplace or that its ability to continue with its other contracts will be impacted.

Finally, a further specific reputational risk relied upon by Mr Pyne and by Ms Hannaford KC in her written (although not oral) submissions is said to be that, should Unipart succeed in being awarded damages, it will cause damage to its reputation by having sought to take money out of the NHS, requiring it to pay twice for the services. If the only purpose of suing is to repair a reputational loss, this could be achieved by succeeding in the declaration it seeks that it was wrongly excluded, and/or by declining to seek or take any damages awarded. If the purpose of the litigation is to in fact extract damages if SCCL has breached its obligations, then any reputational damage caused by Unipart’s decision to pursue its rights is caused by its own decision to follow that path. People are entitled to make of that what they will. In any event, the suggestion that exercising its lawful rights will create a tangible but unquantifiable reputational loss is wholly speculative.

In conclusion, I have clear concerns, as expressed above, which reflect the level of confidence the Court can have in the likelihood that significant and irrecoverable losses will in fact be incurred by Unipart. That said, those concerns are balanced against the fact that I accept this is a high value and prestigious contract, and Unipart’s position on the impact of losing the New Contract is stronger than DHL’s, given that it is much smaller and it is the incumbent, which make Unipart more readily susceptible to the type of impact described by Mr Pyne. My concerns notwithstanding, therefore, I am prepared to accept that it is at least arguable that some losses of the nature described may be sustained by Unipart and that it (just) crosses the threshold at this stage of the analysis. The degree of confidence I have about the risk of unquantifiable losses is nevertheless to be considered when balancing the risks in the overall analysis.