Search in Features

Pro Authority

Monday October 8th, 2012

The recent case of Newcastle Upon Tyne Hospitals NHS Foundation Trust vs Newcastle Primary Care Trust and Others [2012] gives new guidance on when damages will be an adequate remedy in cases where a contract has been suspended under the Public Contracts Regulations 2006 (the Regulations). David Hansom looks at how the decision was reached.

David Hansom

David Hansom

The flurry of case law on automatic suspension shows no sign of letting up. In its decision in the case of Newcastle Upon Tyne Hospitals NHS Foundation Trust vs Newcastle Primary Care Trust and Others [2012] the court considered an application by the defendants to lift the suspension imposed by Regulation 47G(1)(a) of the Regulations. As readers will be aware, a contract will be automatically suspended when a claim form is issued in respect of a contracting authority’s decision to award a contract, claiming such an award would be a breach of the Regulations.

The claimant was an unsuccessful bidder following an invitation from the defendants for tenders for contracts to provide diabetic retinopathy screening services in the North East of England.

Mr Justice Tugendhat used the established three question test from American Cyanamid vs Ethicon Ltd [1975] to decide the case: was there a serious question to be tried?; if ‘yes’, then would damages be an adequate remedy for a party?; and finally, if not, where did the balance of convenience lie? The judge confirmed the guidance in the Cyanamid case stating that a low threshold should be used when looking at the first question and that he preferred not to decide the case on the basis that there was no seriously triable issue.

The main issue he identified was therefore whether damages would be adequate. He found that the claimant provided little evidence to show that damages would be an adequate enough remedy for it; instead the primary concern of the evidence was the delivery of the service to the population in need of that service. It is worth noting therefore that a claimant should provide an articulation of why damages would not be adequate in the particulars of claim.

Justice | Gov Opps

The claimant had put forward the interim solution of providing the services until the litigation was decided, effectively meaning the contract was awarded to the unsuccessful bidder for a period of time. It was determined that  the delay of a year or more to the commencement of a contract with an overall term of three years would be a ‘very significant delay’ and on this basis it was held this was not an adequate remedy for the defendants, nor was it just to the defendants and the successful bidder. As such, the suspension was lifted.

This case continues the theme of ‘pro authority’ decisions which will be further reassurance to contracting authorities. The continued scrutiny of purchasing decisions of all values and types, across all sectors, means that authorities do need to be more careful than ever in ensuring their decisions are defensible.

 

Veale Wasbrough Vizards advises on a range of innovative social enterprise and partnering projects across the charities, education, health and public sectors. David Hansom is a partner and head of Veale Wasbrough Vizards’ specialist public sector team.

 

David Hansom

Online: www.vwv.co.uk

Twitter: @vwvlawfirm

Linked In: David Hansom

1 Comment

Leave a Reply

debug