Kent Community Health NHS Foundation Trust v NHS Swale Clinical Commissioning Group NHS Dartford, Gravesham and Swanley
| Jurisdiction | England & Wales |
| Judge | Mr Justice Stuart-Smith |
| Judgment Date | 27 May 2016 |
| Neutral Citation | [2016] EWHC 1393 (TCC) |
| Docket Number | Case No: HT-2016-000046 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 27 May 2016 |
[2016] EWHC 1393 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Stuart-Smith
Case No: HT-2016-000046
and
Nigel Giffin QC and Joseph Barrett (instructed by Bevan Brittan LLP) for the Claimant
Sarah Hannaford QC and Simon Taylor (instructed by Capsticks) for the Defendants
Hearing dates: 26, 27 May 2016
Introduction
This is an application by the Defendants, who are the statutory bodies responsible for procuring NHS Services in North Kent to set aside the automatic suspension which arose as a result of the commencement of proceedings by the Claimant on 19 February 2016. I shall refer to the Defendants as the CCGs and to the Claimant as the Trust.
The Trust has been the provider of adult community services in North Kent for a number of years. In about 2013 a number of complaints caused the CCGs concern about the services being provided by the Trust. A "Remedial Action Plan" was issued in July 2014. On the materials that are available to the Court it appears that some improvements occurred, but the CCGs decided in May 2015 to go out to competitive tender for the procurement of the future provision of those services. Their intention was that the new arrangements should be in place by 1 April 2016.
On 13 May 2015 the CCGs published a Contract Notice in the Official Journal of the European Union which described the exercise as being for Part B services and said that the competitive dialogue process would be used. In June 2015 the Trust, as part of a consortium of bidders, submitted its Pre-Qualification Questionnaire ["PQQ"]. The purpose of the PQQ stage included that the CCGs should be able to and should assess the capability and suitability of potential bidders to provide the services. It included questions requiring potential bidders to outline their previous experience, their approach to clinical governance, quality management and patient safety, and to describe their arrangements for ensuring that all clinical staff receive appropriate clinical supervision and how good practice was to be achieved. The Trust was awarded 4 out of 5 for each of these areas, which means that its answers were assessed as "good".
The CCGs were evidently satisfied at the capability and suitability of the Trust to provide the services as disclosed by the PQQ exercise and they invited the Trust to participate in the competitive dialogue. The final date for tenders was 20 November 2015. On 22 December 2015 the CCGs informed the Trust that the contract was to be awarded to Virgin Care because Virgin Care's overall score was better than that of the Trust. The overall score had two component parts, quality and price. The Trust scored better than Virgin Care on quality but less well on price. It may therefore reasonably be deduced that the CCGs would have been content to award the contract to the Trust simply on grounds of quality; where the Trust fell short was on price.
The Trust issued these proceedings on 19 February 2016. There was then a relatively short period during which the CCGs gave limited disclosure, which they hoped might persuade the Trust to withdraw its claim. That did not happen. On 13 April 2016 the CCGs' solicitors wrote requesting the Trust to consent to the lifting of the automatic suspension "in the urgent interests of the development of adult community services and the promotion of patient care in North Kent." On 22 April 2016 the Trust's solicitors informed the CCGs that the Trust did not consent to the lifting of the suspension and that it would strongly resist any application that was made. After a time spent preparing the extensive evidence in support, the present application to lift the automatic suspension was issued on 10 May 2016. The Defence was served on 19 May 2016. The application to set aside was heard yesterday, 26 May 2016. There was a suggestion in the Trust's submissions that the CCGs had delayed unreasonably in issuing their application. I do not agree.
The application has generated over 2000 pages of pleadings, witness statements and exhibits but the issues between the parties can be shortly stated:
i) The principles to be applied are generally both settled and well known and involve the application of American Cyanamid principles in the context of the statutory framework for the regulation of public procurement contracts. I shall refer to them in more detail below;
ii) It is accepted that the proceedings brought by the Trust raise a serious issue to be tried. The Trust says that it has a strong case. That may be so, but on an application such as this the material does not make it one of those cases where the Court can take the view that one party or another is bound to win. I therefore approach the case on the agreed basis that the first American Cyanamid requirement is satisfied;
iii) The Trust contends that damages would not be an adequate remedy for it as a not-for-profit organisation which exists to serve the public good. This raises interesting questions of principle and application which I will have to examine in some detail;
iv) The CCGs say that damages would be an adequate remedy for the Trust but would not be an adequate remedy for the CCGs for a number of reasons. At the forefront of those reasons are a number of stated concerns about the quality of the provision of services by the Trust. The Trust says that there is a short answer to those stated concerns, which is that it scored more highly on quality than did Virgin Care;
v) The CCGs say that the balance of convenience favours the lifting of the suspension and that a substantial consideration for the Court is the public interest in the NHS being allowed to get on with the provision of care services as it thinks best.
This is not an exhaustive account of the arguments that have been advanced on either side. It is, however, sufficient to show that at various stages in the argument each of these limbs of the National Health Service asserts that public interest is on its side.
The Principles to be Applied
I have described the principles as generally settled and well known. There are a number of contributing authorities. If only because Carr J in Counted4 Community Interest Company v Sunderland City Council [2015] EWHC 3898 (TCC) described it as a helpful overview, I adopt what I said in Openview Security Solutions Limited v London Borough of Merton Council [2015] EWHC 3332 (TCC) at [6]–[40], while having regard to the other authorities that now make up the usual body to be referred to the court on applications such as this..
Each case is likely to have particular factual nuances that will cause the court to concentrate upon different aspects of the general principles. In the present case, attention has focussed on what is meant by the adequacy of damages for a not-for-profit organisation and on the role of the public interest in assessing the balance of convenience.
Damages as an adequate remedy
In the present case the CCGs submit that damages are an adequate remedy because the financial loss to the Trust if it is wrongfully deprived of the contract can be calculated. Thus it is said that the fact that the Trust aims to generate a surplus of over 1% on its activities and has historically done so and that the annual intended contribution of the contract to the Trust's fixed overheads means that damages can be calculated without difficulty. There is no suggestion that losing the contract will put the Trust out of business, and no real question of loss of reputation arises. The Joint Trust and CCG Impact Assessment Report does not identify interdependencies and so, say the CCGs, it can be taken that there will be no knock on effects for the Trust's other activities or, if there are, they are not material and simply reflect the Trust's wish to maintain its monopoly position.
The Trust identifies three reasons why the answer "No" should be given to the question "Is it just, in all the circumstances, that a plaintiff should be confined to its remedy in damages?"
i) The Trust submits that the question is to be answered by reference to a Claimants' real concern in bringing the proceedings, so as to meet the substantial justice of the case if the claim succeeds. Here, it is submitted that the Trust is a public body that exists solely to care for and provide healthcare services to the people of Kent. It asserts that its true interest in pursuing this litigation is the protection of the public good. It submits that NHS procurement cannot be treated as if it were simply an ordinary commercial exercise and that the overarching statutory duty of an NHS body procuring services is to act with a view to securing the needs of the people who use the services, improving the quality of the services and improving efficiency in the provision of the services, including through their provision in an integrated way which "cannot be reduced to a lowest common denominator of financial returns, or damages representing such returns." It seeks to turn its not-for-profit status to its advantage by submitting that it "exists for the sole purpose of providing NHS Healthcare services to its patients";
ii) Second, it submits on the basis of evidence from Mr Flack, its executive director, that the Trust attempts to provide an integrated approach to healthcare services for the people of North Kent, which he says will be undermined if the contract goes...
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