Teleperformance Contact Ltd v The Secretary of State for the Home Department
| Jurisdiction | England & Wales |
| Judge | Mr Justice Constable |
| Judgment Date | 06 October 2023 |
| Neutral Citation | [2023] EWHC 2481 (TCC) |
| Court | King's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2023-000241 |
and
[2023] EWHC 2481 (TCC)
Mr Justice Constable
Case No: HT-2023-000241
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (KBD)
Royal Courts of Justice
Strand, London, WC2A 2LL
Sarah Hannaford KC and Ben Graff (instructed by Bird & Bird LLP) for the Claimants
Michael Bowsher KC and Ewan West (instructed by TLT LLP) for the Defendants
Joseph Barrett (instructed by DAC Beachcroft LLP) for the Interested Party
Hearing date: 22 September 2023
Approved Judgment
This judgment was handed down by release to The National Archives on 6 October 2023 at 2pm.
Introduction
This is an application brought by the Defendant, the Secretary of State for the Home Department (‘SSHD’) to lift the automatic suspension which, pursuant to regulation 95(1) of The Public Contracts Regulations 2015 (as amended) (‘PCR 2015’), precludes SSHD from entering into the contracts whose award has been challenged by the Claimant, Teleperformance Contact Limited (‘TCL’).
TCL's claim concerns a challenge to the conduct by SSHD of a procurement for five contracts for the provision of visa and citizenship application services (‘the Procurement’). The services are to include the provision of the infrastructure and people for the required Visa and Application Centres (‘VACs’), appointment booking, priority / added-value services, fees, identity check and document verification, document upload, biometric capture, digital interviewing, vignette services, HMPO specific requirements, and complaints and customer insight. The provision of services is required across a global network of locations and SSHD therefore sought to procure five individual contracts, each covering one of the following five geographical lots:
Lot 1: Africa and Middle East
Lot 2: Americas, Canada, Australasia and Europe
Lot 3: China and Taiwan
Lot 4: Asia and Asia Pacific
Lot 5: The UK.
The Procurement was advertised by way of a Contract Notice published on 8 December 2021. The estimated total value of the contract was £1.2 billion with the estimated value of the individual lots being: Lot 1 (£316 million), Lot 2 (£303 million), Lot 3 (£147 million), Lot 4 (£271 million) and Lot 5 (£163 million). TCL submitted an initial tender for all five Lots on 30 May 2022. On 9 August 2022, TCL was provided with its scores and feedback and was notified that it had proceeded to the negotiations stage (which took place between 15 August 2022 and 7 October 2022). On 25 October 2022, the Claimant was invited to submit a best and final offer (‘BAFO’). It submitted its BAFO on 5 December 2022. On 15 June 2023, TCL was notified (a) that it had been awarded the contract for Lot 5 but (b) had been unsuccessful in its bids for Lots 1 to 4 and that each of these contracts had been awarded to VF Worldwide Holdings Ltd (‘VFW’), who was joined to the proceedings as an Interested Party by the Order of Eyre J dated 10 August 2023.
TCL commenced proceedings on 12 July 2023, challenging SSHD's decisions to award the contracts for Lots 1, 2 and 3 (‘the Proposed Contracts’) to VFW and in particular, to the Authority's evaluation of these Lots at the BAFO stage.
The witness evidence served in support of each parties' positions, and considered by the Court, comprises:
(1) On behalf of SSHD, the applicant, two statements from Keren Locke, the Deputy Director of Transformation Delivery and two statements from Jonathan Hainey, Partner at TLT LLP (solicitors for SSHD);
(2) On behalf of TCL, two statements from Simon Peachey, Chief Sales Officer at TLScontact (the trading name used for all TLS Group S.A. entities, including TCL, as set out further below), and one statement from Jeremy Sharman, Partner at Bird & Bird LLP (solicitors for TCL).
(3) On behalf of VFW, one statement from Chris Dix, Head of Business Development for the VFS Global Group and one statement from John Edward Williams, Legal Director at DAC Beachcroft LLP (solicitors for VFW).
Principles to be applied
Given that they are now well established, there was no dispute before me as to the legal principles to be applied when determining an application to lift the automatic suspension. The Court has to apply the test set out in American Cyanamid v Ethicon [1975] AC 396 per Lord Diplock at pp.407G–408H. As summarised by O'Farrell J in Camelot UK Lotteries Ltd v Gambling Commission [2022] EWHC 1664 (TCC), the questions for the Court are as follows:
(1) Is there a serious issue to be tried?
(2) If so, would damages be an adequate remedy for the claimant if the suspension were lifted and they succeeded at trial; is it just in all the circumstances that the claimant should be confined to a remedy of damages?
(3) If not, would damages be an adequate remedy for the defendant if the suspension remained in place and it succeeded at trial?
(4) Where there is doubt as to the adequacy of damages for either of the parties, which course of action is likely to carry the least risk of injustice if it transpires that it was wrong; that is, where does the balance of convenience lie?
Serious Issue to be tried
There is no dispute on the application before me that there is a serious issue to be tried. Neither party seeks to persuade me to reach any view on the relative strength of the claim or take any such view into account, and I do not do so.
Adequacy of Damages for TCL
The basis of TCL's claim that damages would be an inadequate remedy should TCL succeed at trial is based upon irremediable losses it says will be suffered by it and, more particularly, by the wider visa and consular services business in the Teleperformance group.
Ms Hannaford KC, for TCL, does not contend that TCL's financial loss by way of loss of profit that would have been earned on the contracts had TCL's tender been successful would be excessively difficult to quantify in itself.
The reasons advanced succinctly by Ms Hannaford, based principally upon the evidence of Mr Peachey, are:
(1) Closure of at least 64, and up to 67, of the 156 VACs operated by TLScontact around the world;
(2) A resulting reduction in TLScontact's presence and cessation of operation;
(3) A resulting reduction in TLScontact's prospects of securing future business in upcoming procurements;
(4) Redundancies in excess of 750 employees;
(5) A 71% reduction in TLScontact's revenue, inhibiting its ability to compete in upcoming procurements; and
(6) Loss of reputation.
There lies, at the heart of the submissions, an important point of principle relating to the extent to which TCL can pray in aid losses to ‘TLScontact’. As explained by Mr Peachey in his first witness statement, the Teleperformance group is a global digital services business which provides a range of services split between business services and specialised services. Business services include back office processing, advanced analytics and artificial intelligence while specialised services include collection services and healthcare support. The visa and consular services provided to governments are part of Teleperformance's specialised services. These services include the provision of physical and digital infrastructure necessary to run visa application systems.
The structure of the relevant entities within the Teleperformance group is summarised by Mr Peachey as follows:
(1) Teleperformance SE is the ultimate holding company (registered in France) of the entities within the Teleperformance group;
(2) Teleperformance Holdings Limited (‘THL’) is a wholly owned subsidiary of Teleperformance SE;
(3) Teleperformance Limited is a wholly owned subsidiary of THL;
(4) TLS Group S.A, a holding company registered in France, is a subsidiary of Teleperformance SE; and
(5) TCL, the Claimant, is a wholly owned subsidiary of TLS Group S.A.
He explains further that the visa and consular services business is delivered through TLS Group S.A. and its subsidiaries (including TCL). These companies are also referred to collectively by the trading name, TLScontact (or TLS). The delivery of services by TLScontact to the Authority and other governments is through the use of special purpose vehicles incorporated across the key trading regions: Central and Western Europe; North and West Africa; sub-Saharan Africa; the Middle East and Turkey; Russia and the CIS Region; and Asia Pacific. The local TLScontact entities are engaged to manage the on-the-ground aspects of visa and consular operations, for example, hiring staff, entering into lease agreements and complying with any requirements of local law.
Mr Peachey's evidence is that it is primarily the other trading entities within what is called TLScontact which will between them sustain the claimed financial losses and redundancies caused by the closure of VACs as a result of failing to win the bid, and such reduction in TLScontact's prospects of securing future business in upcoming procurements is, again, a loss to other SPVs within the group and, ultimately, the parent company. The claimed 71% reduction in revenue is not TCL's revenue, but the aggregate revenue of the TLScontact groups. Ms Hannaford readily accepts that these losses, irrespective of whether they are tangible and quantifiable, will not be recoverable against SSHD by TCL. They are not TCL's losses. However, Ms Hannaford contends that the position of the group may nevertheless be taken into account by this Court when considering whether damages are an adequate remedy. Put at its highest, Ms Hannaford contends that if an SPV in the position of the Claimant cannot pray in aid the irrecoverable impact upon the wider group to which it belongs, it will never be able to identify an inadequacy in damages...
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