Braceurself Ltd v NHS England
| Jurisdiction | England & Wales |
| Judge | Lord Justice Coulson,Lord Justice Dingemans,Lord Justice Snowden |
| Judgment Date | 30 January 2024 |
| Neutral Citation | [2024] EWCA Civ 39 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: CA-2023-000048 |
[2024] EWCA Civ 39
Lord Justice Coulson
Lord Justice Dingemans
and
Lord Justice Snowden
Case No: CA-2023-000048
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURT
(TECHNOLOGY AND CONSTRUCTION COURT)
Alexander Nissen KC (Sitting as a Deputy High Court Judge)
Royal Courts of Justice
Strand, London, WC2A 2LL
Philip Moser KC & Amardeep Dhillon (instructed by Acuity Law Ltd) for the Appellant
Fenella Morris KC & Benjamin Tankel (instructed by Blake Morgan LLP) for the Respondent
Hearing date: 29 November 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on 30 January 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
No 2: SUBSTANTIVE APPEAL
Introduction
In a public procurement claim, where an unsuccessful bidder claims damages against the contracting authority, the claimant must prove, not only a breach of the Public Contract Regulations 2015 (“PCR”), but also that the breach is ‘sufficiently serious’ to warrant an award of damages (sometimes called Francovich damages). Although this is a concept originating in European Law, it remains unamended by the new Procurement Act 2023. It is not a test that fits very easily either into the English common law generally 1, or the world of public procurement challenges in particular. This appeal is perhaps a paradigm example of some of the practical difficulties which the test can create.
The primary issue in this appeal is whether, as a matter of principle, the judge's finding that, but for the respondent's breach, the appellant would have been awarded the contract “was decisive on the question of sufficient seriousness” (see paragraphs 26, 29 and 31 of the appellant's skeleton argument). This argument would, in many cases, mean that the effect of the breach automatically overrode any other factor. In addition, there are two further potential issues of principle in play, concerned with the culpability of the infringer and the principle of an effective remedy, which also arise from the ‘sufficiently serious’ test and the particular facts of this case. Still further, the respondent has raised, by way of a Respondent's Notice, a number of challenges to the core findings of the judge. There were therefore times during the hearing when it felt as if the entire litigation was being rerun on appeal. This risked obscuring the underlying issues of principle, which are not unimportant to those who practice in the public procurement field.
Accordingly, in an attempt to cut through the morass of detail, I set out in Section 2 below, the factual background, focusing on the original procurement and the various stages in the litigation. In Section 3, I identify what I consider to be the principal issues raised in this appeal. In Section 4, I summarise the relevant principles of law. Thereafter, in Sections 5–8, I deal with the three points of principle said to arise on this appeal, as well as the evaluative exercise undertaken by the judge. I address the standalone points in the Respondent's Notice in Section 9. There is a short summary of my conclusions in Section 10. The Court is very grateful to leading counsel on both sides for the focussed nature of their submissions.
The Factual Background
The Original Procurement
The respondent is the statutory authority responsible for, amongst other things, NHS South, Central and West Commissioning Support Unit. In February 2019, the respondent completed a nationwide procurement for the provision of Orthodontic Services, of which Lot reference PR002368 (WSX18), located in an area of East Hampshire, formed a part. The appellant, Braceurself Limited, was the incumbent
provider and one of two bidders for the Lot, which comprised a 7-year contract worth £32.7 million over its whole lifetimeThe appellant's bid was unsuccessful; the Lot was awarded to a company known as PAL in these proceedings. However, the difference between the two bids was very close. PAL scored 82.5% whilst the appellant scored 80.25%, a difference of just 2.25%. It followed that even minor breaches of duty under the PCR by the respondent, either in over-scoring PAL's bid or underscoring the appellant's bid, could have had a decisive impact on the outcome of the competition.
The Lifting of the Automatic Suspension
The appellant issued proceedings against the respondent alleging breach of the PCR. As originally formulated, this claim was for the setting aside of the award to PAL. The respondent applied under Regulation 96(1)(a) to lift the automatic suspensions of the contract award process, and the appellant applied to add a claim for damages.
The applications were heard by His Honour Judge Bird, sitting as a High Court Judge. His judgment is at [2019] EWHC 3873 (TCC). The judge granted the respondent's application to lift the automatic suspension. He also granted the appellant's application for permission to add the claim for damages. The primary reason for the lifting of the suspension was Judge Bird's conclusion that “in this case damages would be an adequate remedy” [45].
The Substantive Proceedings
It was a feature of the substantive proceedings in this case that the appellant's claims were very wide-ranging. They attacked numerous aspects of the scoring of their own bid, and also made detailed criticisms of the scoring of PAL's successful bid.
One of the numerous criticisms made of the marking of the appellant's bid concerned accessibility of premises (referred to in the papers as marking area CSD02). This complaint was made in general terms at the time of the applications before Judge Bird, but the specific complaint under this head was not identified and pursued until the trial itself. The general complaint was that “Braceurself's bid had clear items relating to accessibility of premises in line with the Equality Act 2010, in contrast to PAL. There should have been no marking down for the reference to the stairlifts.” But the specific point centred on the evaluators' assumption that a stairclimber – which is what the appellant had included in its bid as a means of access to the first floor – was a form of fixed stairlift, when it was in fact a rather more flexible piece of equipment. It was said that, in consequence of this manifest error, the appellant's score should have increased from a 3 to a 4 on this item, which would have added 2.5% to their score. That would have been enough to change the outcome of the competition, because it would have meant that the appellant, not PAL, was the Most Economically Advantageous Tenderer (“MEAT”), albeit by just 0.25%.
The Liability Judgment
The substantive trial, and all hearings thereafter, were dealt with by Mr Alexander Nissen KC, sitting as a Deputy High Court Judge (“the judge”). His judgment on liability is at [2022] EWHC 1532 (TCC). He said that he was generally impressed by the careful way in which the evaluators had tried to carry out their functions and concluded that the procurement itself was carefully planned and well organised. He rejected all but one of the numerous challenges brought by the appellant.
The one complaint that the judge upheld concerned CSD02. Even then, at [121]–[126], he rejected both the appellant's arguments that PAL's score for this element of the bid should have been reduced from 3 to 2 on this item, and many other criticisms made of the scoring of the appellant's bid. However, at [127]–[149] the judge accepted the submission that a manifest error had been made in the respondent's assessment of accessibility (because of the factual misunderstanding about the nature of the stair climber) and that this impacted on its score for CSD02. As to the score which the appellant should have received, the judge explained at [186]–[188] why the appellant's score should have been increased from 3 to 4. That single increase of 2.5% meant that the appellant, not PAL, would have been the successful bidder. As the judge said at [189]:
“It is therefore most unfortunate that in respect of one question, the Defendant fell into a manifest error, and by reason of the closeness of the two bidders, this manifest error had such drastic consequences.” 2
It had been everyone's intention that, as part of the liability trial, the judge should also deal with whether any breaches were “sufficiently serious” to justify an award of damages. However, as the judge explained, that was not possible at that stage because the parties had not been able to assist him on, for example, the sufficiently serious nature of the single breach in respect of CSD02. Accordingly, the issue as to the potential award of damages had to be delayed until later in the year.
The Francovich Judgment
What has been referred to as the Francovich Judgment in this case is at [2022] EWHC 2348 (TCC). Having set out the law between [13] and [25], and having set out the parties' contentions at [26]–[30], the judge then embarked on a consideration of the various factors relevant to the assessment of whether or not the breach was sufficiently serious to justify an award of damages. That assessment is from [33]–[86]. This was, like his earlier Liability Judgment, a detailed and thoughtful exercise.
In essence, the appellant's argument before the judge was the same as the argument now pursued on appeal, namely that the individual breach altered the outcome of the competition (because, but for the breach, the appellant would have been awarded the contract). The appellant therefore argued that this automatically meant that the breach was sufficiently serious to warrant an award of damages. The judge considered and rejected that argument in two...
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