The Technology and Construction Court’s decision earlier in the summer to refuse an application to lift an automatic suspension in the context of a procurement challenge is a rare departure from the norm and provides a valuable summary of the issues the court will consider in similar cases.
Facts
In Draeger Safety UK Ltd v The London Fire Commissioner, Draeger was the incumbent supplier of respiratory protective equipment to The London Fire Commissioner (LFC) under a contract awarded in 2010.
LFC wished to upgrade its existing equipment to improve the safety of its firefighters and the efficacy of its services to the public. It published an OJEU notice for a ten-year contract for the provision of firefighting equipment and repair and maintenance services.
Draeger’s tender was unsuccessful, the contract was awarded to MSA Britain Limited (MSA). Draeger commenced proceedings against LFC claiming that it had breached the Public Contract Regulations 2015 (PCR). Because LFC and MSA had not yet entered into the new contract, Draeger’s claim meant the new contract was automatically suspended due to the PCR, and LFC was prevented from entering into the new contract with MSA.
LFC filed an application for the automatic suspension to be lifted. Draeger opposed the application and issued a separate application for an expedited trial to take place, which was supported by LFC to the extent that its application to have the suspension lifted was not granted.
Judgment
In determining whether to lift the automatic suspension, the Court had to consider the now standard four questions:
- Is there a serious issue to be tried?
- 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 its remedy of damages?
- If not, would damages be an adequate remedy for the defendant if the suspension remained in place and it succeeded at trial?
- 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?
On the first question, the court concluded that the low threshold for finding that there was a serious issue to be tried had been surpassed.
In relation to the second question, the Court noted evidence that “other fire and rescue services throughout the UK were watching this procurement” with a view to following LFC’s lead. As the incumbent supplier of respiratory equipment, Draeger risked harm to its reputation and other losses for which damages would not be an adequate remedy if it were to lose out on the contract.
On the third question, damages would not be an adequate remedy for LFC if the automatic suspension remained in place. Specifically, the Court noted recommendations following the Grenfell Tower Inquiry as well as the “significant operational benefits” that would result from the replacement of the current, sub-optimal equipment. Any delay in such replacement would not adequately be redressed by the payment of damages.
Finally, the Court considered where the balance of convenience lay. In the context of a procurement challenge, this involves determining “which course of action is likely to carry the least risk of injustice to either party if it is subsequently established to be wrong”. While the Court stated that: “the public interest in the timely introduction of new protective equipment to implement operational improvements would be a very strong factor in favour of lifting the suspension”, the option to offer the parties an expedited trial was more persuasive. Further, MSA’s obvious interest in the suspension being lifted was balanced against the interest of LFC and Draeger in resolving the dispute fairly.
On these grounds, it was ordered that the automatic suspension remain in place and that an expedited trial take place in October 2021.
Conclusion
This case is noteworthy for a number of reasons. Firstly, it is unusual for the Court not to find in favour of a contracting authority where that authority applies to have an automatic suspension lifted. This is even more unusual where there is a significant public interest involved, such as the timely provision of new protective equipment to improve the operations of emergency services. This ruling may signal the Court’s intended approach to the UK’s public procurement regime post-Brexit, as outlined in the recent Green Paper, ‘Transforming Public Procurement’.
That said, a key factor in persuading the Court not to lift the automatic suspension in this case was the feasibility of holding an expedited trial. Additionally, LFC had already expressly stated their conditional support for Draeger’s application for an expedited trial. Parties seeking to maintain – or indeed, challenge – an automatic suspension in a public procurement case should consider whether this option is a feasible alternative early on, and if not, why not.
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