Sysmex (UK) Ltd v Imperial College Healthcare NHS Trust (Defendant/Applicant)
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Coulson |
| Judgment Date | 21 July 2017 |
| Neutral Citation | [2017] EWHC 1824 (TCC) |
| Docket Number | Case No: HT-2017-000046 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 21 July 2017 |
[2017] EWHC 1824 (TCC)
The Hon Mr Justice Coulson
Case No: HT-2017-000046
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
RollsBuilding, Fetter Lane, London, EC4A 1NL
Ms Sarah Hannaford QC (instructed by Bevan Brittan LLP) for the Claimant/Respondent
Mr David Sears QC (instructed by Capsticks Solicitors LLP) for the Defendant/Applicant
Hearing dates: 19 and 21 July 2017
JudgmentApproved
INTRODUCTION
By these proceedings, the claimant ("Sysmex") seeks to challenge the decision of the defendant ("the Trust") to award a managed services contract ("MSC") in respect of pathology services to Abbott Laboratories Limited ("Abbott"). Sysmex specialise in the provision of haematology and coagulation services and participated as a specialist sub-contractor in the unsuccessful bid for the MSC led by Roche Diagnostics Limited ("Roche").
The commencement of these proceedings on 24 February 2017 triggered an automatic suspension of the Trust's ability to enter into the MSC with Abbott, pursuant to Regulation 95 of the Public Contracts Regulations 2015. The Trust now applies under Regulation 96(1)(a) to lift that automatic suspension.
I set out a brief history of this dispute in Section 2 below. I identify the applicable principles of law in Section 3. Thereafter I deal in turn with each of the three questions which arise on an application such as this: (i) Is there a serious issue to be tried? ( Section 4); (ii) Are damages an adequate remedy? ( Section 5); and (iii) What is the balance of convenience? ( Section 6). There is a short summary of my conclusions in Section 7. I am very grateful to leading counsel for their helpful written and oral submissions.
BRIEF HISTORY
On 4 November 2015, the Trust advertised the procurement for the MSC in respect of pathology services in the Official Journal of the European Union, on behalf of itself and three other NHS Trusts/Foundation Trusts. One of the main aims of the MSC was to ensure that the Trust had one provider who would in turn manage and be responsible for the numerous specialist sub-contractors and suppliers involved in the Trust's pathology services.
The procurement was carried out over a period of 14 months, between 4 November 2015 and 27 January 2017. There were four separate stages of the Invitation to Submit Detailed Solutions ("ISDS"). Thereafter, there was an Invitation to Submit Final Tenders ("ISFT"). By the end of the tender process there were two bidders only: Abbott and Roche.
The Roche bid was rejected on 27 January 2017 when the Trust notified them that it intended to award the MSC to Abbott.
Sysmex commenced these proceedings on 24 February 2017. The original Particulars of Claim were served on 31 March 2017. At that point, the only allegation which was made concerned the equipment which Abbott were intending to supply as part of their winning tender: it was alleged that the Trust could not lawfully accept a bid based on prototype products that had yet to be CE marked, and had therefore wrongfully accepted Abbott's bid, which was based on a full blood count analyser (called Alinity Hs) which was not CE marked.
The Particulars of Claim has been amended on two subsequent occasions, following the provision of further documents from the Trust. In consequence, the allegations made by Sysmex are now broader in scope, and go to the detailed evaluation and scoring of the Abbott tender, insofar as it related to haematology and coagulation services.
I am told that there were settlement discussions that began in April and continued until 12 June 2017. As part of that process, on 24 May 2017, by consent, Fraser J stayed the proceedings for four weeks "to allow the parties to attempt to settle the dispute through alternative dispute resolution." There were two express exceptions to the stay: the making of any application by the Trust to lift the suspension, and by Sysmex for specific disclosure. On 16 June 2017, 4 days after the negotiations came to an end, the Trust duly made an application to lift the automatic suspension. A defence was served on behalf of the Trust on 26 June.
The evidence served in connection with the (disputed) application to lift the suspension fills 4 lever arch files. There were three statements originally served on behalf of the Trust (from Mr Dubery, who was the Trust's Procurement Business Partner at the relevant time; Sir Stephen Bloom, a Professor and Chairman at the Trust; and Mr Bubb, who was the interim Finance Director for the Trust). There were then three statements in response on behalf of Sysmex (from Mr Pattinson, a director; Mr Howes, the managing director; and Ms Heard, their solicitor); and two further statements in reply from the Trust from Sir Stephen and Mr Bubb. Not to be outdone, Sysmex sought to rely on a second statement from Mr Pattinson, served only one clear day before the hearing. Following argument, I allowed that statement into the evidence. These nine statements contain a total of 501 lengthy paragraphs, run to 141 pages, and exhibit almost 1000 pages of documentation.
As I pointed out to the parties, that was an absurd amount of evidence and documentation; it seemed designed for a three week substantive trial, rather than a one day hearing and an application of the rough and ready principles to be derived from American Cyanamid. In view of the requirement for the court to address the issue of suspension speedily, the production of evidence on such an industrial scale was counterproductive. It took almost a day just to read carefully through these statements. If I do not refer to them (or their 501 paragraphs) individually below, that is not because I have not taken into account what they say.
THE APPLICABLE PRINCIPLES
American Cyanamid
It is well-settled law that, in approaching an application to lift an automatic suspension, the court should apply the principles set out in American Cyanamid Co v Ethicon Limited [1975] AC 396. There are a number of authorities which make clear that this is the correct approach in procurement cases: see, for example, Group M UK Limited v Cabinet Office [2014] EWHC 3659 (TCC) and Openview Security Solutions Limited v London Borough of Merton Council [2015] EWHC 2694 (TCC).
Although it is sometimes pointed out that the damages question is really an element of the balance of convenience, it is useful to identify the three separate issues to be considered which derive from American Cyanamid:
(a) Is there a serious issue to be tried?
(b) If there is, are damages nonetheless an adequate remedy?
(c) If damages are not an adequate remedy, where does the balance of convenience lie?
As to the practical application of these three stages, I have always derived considerable assistance from the judgment of Chadwick J (as he then was) in NottinghamBuilding Society v Eurodynamics Systems [1993] FSR 468 where he said that:
"…the overriding consideration is which course is likely to involve the least risk of injustice if it turns out to be "wrong", in the sense of granting an interlocutory injunction to a party who fails to establish his rights at trial (or would fail if there was a trial) or, alternatively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial."
In my judgment, this neatly encapsulates the court's principal task on the current application, namely to identify which of the two options (to continue or to lift the suspension) is likely to involve "the least risk of injustice".
The Procurement Authorities: General
There have been a number of procurement cases in recent years in which the court has refused to lift the automatic suspension. One example is Covanta Energy Ltd v Merseyside Waste Disposal Authority [2013] EWHC 2922 (TCC), where the delays of 5 years in the procurement process itself, the extended period over which the contract was to run (30+ years), and the fact that an expedited trial could conveniently be accommodated in the court's diary, led to a refusal to lift the suspension. In another example of the court maintaining the suspension, Bristol Missing Link Ltd v Bristol City Council [2015] 876 (TCC), the court was very critical of the Council's conduct during and after the tender process and was concerned that, in part because the contractor was a non-profit making organisation which provided a range of care services for the victims of domestic abuse, damages for the contractor would not be an adequate remedy.
By contrast, there have been two recent cases in which the suspension was lifted. In Perinatal Institute v Healthcare Quality Improvement Partnership [2016] EWHC 2626 (TCC), Jefford J concluded that the claimant could be compensated in damages. Perhaps more significantly, when dealing with the balance of convenience, she said:
"57. On the other hand, there is a clear public interest in this project proceeding as soon as possible. It is a data collection and review project aimed at the reduction of perinatal mortality rates. Prof Gardosi's evidence is that this is a project that PI has for some years been advocating should be undertaken. PI (or perhaps more accurately its predecessor) produced a report in 2010 emphasising the need to standardise the review process, also setting up a stakeholder group with clinical and patient representatives to develop an electronic tool for standardised review which was then piloted in England and Wales. Further, the apparent success of PI's SCOR tool, about which Prof Gardosi gives evidence, demonstrates that the standardised collection and review of data can have significant benefits.
58. This type of...
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