Ryhurst Ltd v Whittington Health NHS Trust
| Jurisdiction | England & Wales |
| Judge | Stephen Davies |
| Judgment Date | 28 February 2020 |
| Neutral Citation | [2020] EWHC 448 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2018-000212 |
| Date | 28 February 2020 |
[2020] EWHC 448 (TCC)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QB)
Rolls Building,
London, EC4A 1NL
His Honour Judge Stephen Davies sitting as a High Court Judge
Case No: HT-2018-000212
Sarah Hannaford QC & Tom Coulson (instructed by Hempsons, Solicitors, Newcastle upon Tyne) for the Claimant
Jason Coppel QC & Rupert Paines (instructed by Bevan Brittan LLP, Solicitors, Bristol) for the Defendant
Hearing dates: 10, 11, 12, 19 December 2019
Approved Judgment
I direct that pursuant to CPR PD 39A paragraph 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
His Honour Judge Stephen Davies
His Honour Judge Stephen Davies
| Section title | Paras |
| Introduction and Decision | 1 – 10 |
| Relevant legal principles | 11 – 67 |
| The parties | 68 – 73 |
| The witnesses | 74 – 82 |
| Other parties | 83 – 85 |
| Strategic Estate Partnerships | 86 – 90 |
| Background to the procurement | 91 – 95 |
| The procurement | 96 – 136 |
| Events leading up to the abandonment | 137 – 181 |
| The decision to abandon the procurement | 182 – 195 |
| The reasons advanced for the abandonment | 196 – 243 |
| Breach | 244 – 255 |
| Causation | 256 – 262 |
| Sufficiently serious breach | 263 – 265 |
| Glossary of acronyms | 266 |
Introduction and Decision
This is a public procurement case in which the claimant, Ryhurst Limited (“ Ryhurst”), complains about the decision by the defendant, Whittington Health NHS Trust (“ the Trust”), to abandon a procurement exercise for a 10 year strategic estates partnership (“ SEP”) contract, in circumstances where the Trust had previously made a decision to award the contract to Ryhurst.
Ryhurst claims that the central reason for the decision to abandon was pressure exerted upon the Trust from various individuals and entities, primarily a local campaigning group and a number of local MPs, including Jeremy Corbyn and Emily Thornberry, as well as the Trust's regulator, NHS Improvement (“ NHSI”).
Ryhurst claims that this pressure was exerted solely or primarily because it is part of the Rydon group of companies of which one company, Rydon Maintenance Ltd (“ Rydon Maintenance”), had been responsible for the refurbishment, including the supply and installation of the cladding, at Grenfell Tower in London where the devastating fire with tragic consequences occurred on 14 June 2017. Ryhurst contends that this ostensible connection with Grenfell was illusory and in any event of no relevance whatsoever to this procurement exercise, so that the Trust could and should never have allowed itself to be swayed by political pressure into abandoning the procurement for that reason.
Ryhurst claims that in abandoning the procurement in such circumstances the Trust was in breach of the duties which it owed to Ryhurst under the Public Contract Regulations 2015 and otherwise. It claims by way of compensation for such breaches damages for the loss which it says it has suffered as a result of such breaches.
The Trust contends that its decision to abandon the procurement was lawful and was taken for a number of proper reasons, as explained in the formal notification of its decision to abandon. It accepts that one of these reasons was the risk that some stakeholders would not engage in or support plans developed with Ryhurst. It also accepts that one of the reasons which motivated those stakeholders was the connection, real or perceived, between Ryhurst and with Grenfell but it denies that this was the sole or indeed the primary reason for its decision.
The Trust also contends that even if, contrary to that primary factual case, the sole or primary reason was the connection with Grenfell, on a proper analysis of the law that did not make its decision to abandon unlawful.
The scope of this trial is limited to the issues of liability, causation and whether or not any breaches made out under the Public Contracts Regulations are sufficiently serious to justify an award of damages. As the case has developed, it has become apparent that the key issues I will have to determine are:
i) What was the real reason, or the real reasons, for the decision to abandon the procurement?
ii) If the real reason, or one of the real reasons, was Ryhurst's connection with Grenfell, did the Trust act unlawfully in abandoning the procurement on that ground?
In the course of this trial I have been referred to voluminous contemporaneous documentation and have received evidence from a number of witnesses called by Ryhurst and by the Trust. I have also had the benefit of excellent written and oral submissions from leading and junior counsel for both parties for which I am very grateful.
Having considered the evidence and the arguments my decision is that Ryhurst has not succeeded in making out its case on liability so that its claim must fail. Had I found for Ryhurst on its primary case in relation to liability it would have succeeded in establishing causation and sufficiently serious breach.
My reasons for reaching those conclusions appear in the following sections of this judgment.
Relevant legal principles
Although there is common ground as to the fundamental principles, there are also a number of important disputes between the parties as to the precise nature and extent of the obligations owed by a contracting authority such as the Trust to a bidder such as Ryhurst in the context of the abandonment of a procurement exercise which I shall have to resolve.
Beginning with what is common ground, it is agreed that the Public Contracts Regulations applied to the procurement conducted by the Trust in this case. The Public Contracts Regulations offer various procurement options. In this case the Trust elected to use the competitive procedure with competitive dialogue option for the procurement, the rules for which appear at regulation 30. In very outline summary: (a) the Trust as the contracting authority begins the procurement process by issuing a contract notice which identifies its needs and requirements and its chosen award criteria; (b) interested economic operators (also referred to as bidders) submit a request to participate and provide the information requested; (c) the contracting authority assesses the information provided and invites selected bidders to participate in a dialogue; (d) the purpose of the dialogue is to identify and define the best means to satisfy the contracting authority's needs; (e) during the dialogue the contracting authority is obliged to ensure equality of treatment and not to provide information in a discriminatory manner; (f) following the dialogue process those bidders who wish to continue are then invited to submit final tenders; (g) the authority may ask for such tenders to be clarified, specified or optimised, but without changing the essential aspects of the procurement; (h) the authority assesses the tenders on the basis of the award criteria; (i) the authority may negotiate with the best tenderer to confirm financial commitments and to finalise the contract terms, but again without changing the essential aspects of the procurement or causing discrimination; and (j) the contract is awarded, on the sole basis of the award criterion of the best price-quality ratio in accordance with regulation 67.
It is also common ground that it is open to an authority to abandon a procurement exercise at any stage of the process. That is of course a right which any party undertaking a tender process enjoys, in the absence of a contractual or statutory prohibition or restriction on its so doing. There was nothing in the tender information published by the Trust nor in any subsequent communications between the parties which imposed any such contractual prohibition or restriction. Nor do the relevant EU Directives nor the Public Contracts Regulations impose any such restriction. Indeed, the right to abandon is acknowledged in the Public Contracts Regulations, since regulation 55 imposes an obligation on an authority “as soon as possible to inform each candidate and tenderer of decisions reached concerning the … award of a contract … including the grounds for any decision … (b) not to award a contract for which there has been a call for competition”. This obligation is a specific statutory reflection of the transparency obligation imposed by general EU law and by regulation 18 of the Public Contracts Regulations (discussed below).
Moreover, the Trust is under a statutory obligation by virtue of section 26 of the National Health Service Act 2006, titled “General duty of NHS trusts”, to “exercise its functions effectively, efficiently and economically”. It follows, as Mr Coppel submitted, that if a NHS trust decided that a procurement exercise would, if carried through to completion, result in it exercising its functions ineffectively, inefficiently or uneconomically, then it would be under a statutory duty to abandon the procurement so long, I would add, as it could lawfully do so.
I add that rider because it is common ground that there are limitations upon the right to abandon. Pursuant to regulation 89 of the Public Contracts Regulations a contracting authority is under a specific obligation to comply with the provisions of Part 2 of the Regulations and with any enforceable EU obligation in the field of public procurement in respect of a procurement exercise falling within the scope of Part 2.
These obligations include the obligation imposed by regulation 18 of the Public Contracts Regulations which, consistent with the fundamental principles of EU procurement law, requires the Trust as a contracting authority to...
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