R Unison v NHS Wiltshire Primary Care Trust and Nine Others Nhs Shared Business Services Ltd and Another (Interested Parties)

JurisdictionEngland & Wales
JudgeMr Justice Eady
Judgment Date15 March 2012
Neutral Citation[2012] EWHC 624 (Admin)
Docket NumberCase No: CO/12402/2011
CourtQueen's Bench Division (Administrative Court)
Date15 March 2012

[2012] EWHC 624 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Honourable Mr Justice Eady

Case No: CO/12402/2011

Between:
The Queen on the Application of Unison
Claimant
and
NHS Wiltshire Primary Care Trust and Nine Others
Defendants

and

(1) Nhs Shared Business Services Ltd
(2) the Secretary of State for Health
Interested Parties

Nigel Giffin QC and Jane Oldham (instructed by Thompsons Solicitors LLP) for the Claimant

Charles Béar QC (instructed by DAC Beachcroft LLP) for the Defendants

Michael Bowsher QC and Valentina Sloane (instructed by Bird & Bird LLP) for the First Interested Party

Kassie Smith (instructed by DWP/DH Legal Services) for the Second Interested Party

Hearing dates: 7 and 8 March 2012

Mr Justice Eady
1

Following a directions hearing before Haddon-Cave J on 10 February 2012, I am to determine certain threshold issues for the purposes of this application for judicial review. For convenience, they were referred to as the "delay issue" and the "standing issue". One of the reasons for ordering a two stage process, rather than a rolled up hearing, was that it might save a good deal of money, in particular, if the Claimant should be unsuccessful in relation to either. On that hypothesis, the proceedings would effectively be at an end and there would be no need to address the substantive issues (subject to any appeal).

2

The claim is brought by the Union ("Unison") to challenge the decisions of the ten Defendants, which are primary care trusts ("PCTs") in the south west of England. Those decisions were to enter into contracts with the First Interested Party, NHS Shared Business Services Ltd ("SBS"), as described in their letter to the Claimant dated 14 December 2011, with a view to the provision of what are called Family Health Services ("FHS"). These have hitherto been provided in-house, but the decision was taken to outsource them as part of the Defendants' ongoing efforts to reduce costs.

3

The essence of the challenge is that the Defendants were at some point in breach of the Public Contract Regulations 2006. (As it happens, Mr Bowsher QC for SBS submits that those Regulations are inapplicable, in any event, because the PCTs purported to be entering into the contracts pursuant to a Framework Agreement of 2004, to which the 2006 Regulations would not apply, but that is not for me to resolve at this stage.)

4

The first question to be decided, in the submission of Mr Giffin QC on behalf of Unison, is whether, arguably, the Defendants' challenge based upon the 2006 Regulations sounds in public law at all. As is well known, it is provided in Regulation 47 that they give rise to duties on the part of public bodies to "economic operators" who, in the event of breach, may have a statutory civil remedy available. Mr Giffin points out that nowhere is there any express exclusion of judicial review and, accordingly, it is right to proceed on the basis that public law remedies can exist alongside those private law remedies provided for in the statute: see e.g. R (Law Society) v Legal Services Commission [2007] EWHC 1848 (Admin)per Beatson J.

5

Furthermore, that submission would accord with the observations of Arden LJ in R (Chandler) v Secretary of State for Children, Schools and Families [2010] LGR 1 at [77]:

"The judge accepted the submission that a failure to comply with any of the regulations gives rise only to a private law claim (see [2009] LGR 417 at [138]-[140]). Such a conclusion has potentially far-reaching implications. It means that a person who is not an economic operator entitled to a specific remedy under reg 47 can never bring judicial review proceedings in respect of that failure unless he can bring himself within the exceptional type of claimant in R (on the application of the Law Society) v Legal Services Commission. We consider that the judge's proposition goes too far. The failure to comply with the regulations is an unlawful act, whether or not there is no economic operator who wishes to bring proceedings under reg 47, and thus a paradigm situation in which a public body should be subject to review by the court. We incline to the view that an individual who has a sufficient interest in compliance with the public procurement regime in the sense that he is affected in some identifiable way, but is not himself an economic operator who could pursue remedies under reg 47, can bring judicial review proceedings to prevent non-compliance with the regulations or the obligations derived from the Treaty, especially before any infringement takes place (see generally Mass Energy v Birmingham City Council [1994] Env LR 298 at 306, cf Kathro's case [2001] 4 PLR 83, where Richards J held that that the claimants were not affected in any way by the choice of tendering procedure). He may have such an interest if he can show that performance of the competitive tendering procedure in the directive or of the obligation under the Treaty might have led to a different outcome that would have had a direct impact on him. We can also envisage cases where the gravity of a departure from public law obligations may justify the grant of a public law remedy in any event. … "

6

Mr Béar QC for the Defendants goes so far as to submit that the Court of Appeal "nodded" on this point and that actually such a breach as is alleged in this case should not sound in public law at all. In particular, he argues that it is unfortunate that the Court of Appeal in Chandler did not address two relevant cases, namely R v Brent LBC, ex parte O'Malley (1997) 30 HLR 328, 355–356 (Schiemann J) and 373–374 (Court of Appeal) and Risk Management Partners Ltd v Brent LBC [2010] LGR 99 at [250]. This, however, must be an argument for another day. It seems to me that the answer to the first question must be in the affirmative. In certain circumstances, a breach of the 2006 Regulations may give rise to public law remedies. This is fundamentally important, of course, so far as Unison is concerned, since it is not an economic operator and would have no right to enforce any statutory duty, whether owed to itself or to its members. Its only possible means of challenge is by way of public law.

7

Mr Béar also submits, in the alternative, and assuming the law to be accurately stated in the passage I have cited from the Chandler case, that the Claimant is unable to satisfy the criteria for standing contemplated by Arden LJ. Mr Béar urges me to determine that question, rather than merely its arguability, since it was one of the purposes of Haddon-Cave J's order to have the issue disposed of at this stage.

8

I was, however, reminded by Mr Giffin of the words of Lord Wilberforce in R v IRC ex parte National Federation of Self-employed and Small Businesses [1982] AC 617. It was there made clear that the issue of standing should normally be disposed of at the permission stage only in those cases where the lack of sufficient interest is obvious. Mr Giffin suggests that standing should only be determined against a claimant where his or her status is that of a "busybody": see e.g. the summary of the law by Sedley J (as he then was) in R v Somerset County Council, ex parte Dixon [1998] Env LR 111. On the other hand, this is a very specific context; that is to say, the relationship between the 2006 Regulations and the availability of public law remedies.

9

Given the statutory structure of the Regulations, and the underlying policy as embodied in the corresponding European Directive, it is likely that breaches of the Regulations are more often going to give rise to private rather than public law remedies, which are going to be relatively rare. It is thus important to focus carefully upon the suggested criteria in the Chandler case and not to interpret them too freely. Mr Béar submits that it plainly cannot extend to permitting any trade union, or any individual worker, to have a potential public law remedy every time it is proposed that a particular service in the NHS, or in any other public sector, should be outsourced. There is a general disinclination to permit challenges to commercial decisions by public bodies: see e.g. the discussion in R (Menai Collect Ltd) v Dept of Constitutional Affairs [2006] EWHC 727 (Admin). Moreover, in the particular context of procurement, there has apparently been a decision by the legislature to confine the specified remedies to commercial competitors. That too needs to be borne in mind when attempting to give effect to the obiter dicta in Chandler.

10

Mr Bowsher QC gave examples of entities which might bring themselves within the words of Arden LJ. He suggested regular suppliers of an economic operator, who might themselves be significantly affected by the grant or withholding of a particular public contract. He also posited the possibility of a trade association which might need to take steps in a case in which (say) there had been discrimination against a class of economic operators.

11

There seems to be no previous example of a trade union seeking a public law remedy in the context of these Regulations or their predecessors, but that is no reason to suppose that it is not legally possible. One can envisage circumstances in which a breach of the Regulations could so affect the members of a union that the law should afford a remedy in public law. I am not concerned at this stage, however, to speculate about possible scenarios, but rather to investigate whether the Court of Appeal criteria have been shown to apply on the present facts. I remind myself, in doing so, that I am not construing a statute but trying to give...

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