In a recent High Court case, the court took a very different approach to previous case law and found that, despite making a manifest error when assessing the procurement, the error made by the Defendant was not sufficiently serious to justify an award of damages.
The case considered the Francovich test that any breach of procurement regulations must be shown to be sufficiently serious for the Claimant to be awarded damages.
Background
The case of Braceurself Ltd v NHS England [2022] EWHC 2348 (TCC) (“the Case”) relates to a procurement by the Defendant for the provision of orthodontic services. The Claimant was one of two bidders. The final bid scores were extremely close, there was only 2.25% between the two bidders and the Claimant’s bid was ultimately unsuccessful.
The Claimant submitted that a breach by the evaluators in their assessment of the bid scores had altered the outcome of the competition and argued that it was a sufficiently serious breach on the facts of the case. The Claimant sought damages for this breach in the sum of £4.7m for loss of profit, bid costs of £26,500 and loss of goodwill, which was not separately quantified.
During the hearing, the Court was impressed with the careful planning and organisation of the procurement and only found one of the Claimant’s complaints to be justified, which led to the Claimant being awarded a score of 3 in respect of one question rather than a score of 4. The Court found that mistakes were made by the Defendant in awarding this score and this mistake had a causative impact on the outcome. If the Defendant had scored correctly, the Claimant would have won the contract.
“Sufficiently serious”
The key question for the Court to consider was whether the breach by the Defendant was sufficiently serious to justify an award of damages.
In summary, the Court held that the breach was not sufficiently serious as to entitle the Claimant to a remedy in damages. The phrase ‘sufficiently serious’ indicated that a high threshold must be passed before it could be said that the test had been satisfied, but that was not the case here.
The Court accepted that the outcome of the competition would have been different but for the breach, but it could not necessarily be determinative. The Court found that having regard to all the facts and circumstances, they did not consider the breach to have been sufficiently serious. The reasons for this were summarised as:
- This was a single breach case in a very close competition where, because it was close, the single breach happened to have had a powerful impact on the outcome.
- The breach, arising because the evaluators made two errors in misreading the Claimant’s bid, was both at the excusable end of the spectrum and minor. It was the result of a misunderstanding.
- The breach was inadvertent, rather than deliberate, and self-evidently occurred in good faith.
- The Defendant’s purpose in carrying out the scoring of CSD 02 was to maximise access to publicly funded orthodontic services for those who have a disability. Its purpose was therefore a laudable one.
- Overall, the procurement itself was carefully planned and well organised, to the credit of the Defendant.
- The impact upon the Claimant was not existential, there was no, or no material impact on the wider public access to orthodontic treatment, the public would have been almost equally well served by either bidder.
Why is this significant
Prior to this judgement, the earlier case of Energy Solutions EU Limited v Nuclear Decommissioning Authority [2016] addressed a similar set of circumstances. In that case, the court indicated that any breach of the PCR 2015 affecting the outcome of a competition would be sufficiently serious to justify damages.
However, in this Case, the Court made a point of distinguishing between the facts of the two cases noting that in the Energy Solutions case, there were multiple errors and breaches of the regulations compared to the single error in this Case.
It will be interesting to see what direction the courts take in similar cases going forward. If they choose to take the same approach as in this judgement, Claimants in the same position as Braceurself Ltd may be left without a remedy for any losses suffered. This judgement is likely to be welcomed by contracting authorities who will hope to rely on this approach as a defence for minor errors. However it will be a concern for bidders when considering whether to challenge the outcome of a procurement process due to an error resulting in a small difference in the awarded scores.
For more information on public procurement issues or if you have any questions, please contact a member of our Public Procurement Team
