High Court rejects union bid to challenge outsourcing on procurement grounds

A High Court judge has refused a union permission to bring a judicial review challenge to a proposed outsourcing on the basis of an alleged breach of EU public procurement rules.

In Unison, R (on the application of) & Anor v NHS Shared Business Services Ltd & Anor [2012] EWHC 624 Unison sought to challenge the decisions of ten primary care trusts in the south west of England to enter into contracts with NHS Shared Business Services, a joint venture between the Department of Health and private sector firm Steria.

The provision of family health services had previously been provided in-house, but the PCTs chose to outsource them as part of efforts to find costs savings.

The union argued that the defendant PCTs were at some point in breach of the Public Contract Regulations 2006.

Mr Justice Eady said there seemed to be no previous example of a trade union seeking a public law remedy in the context of the Regulations or their predecessors. However, he added that there was no reason to suppose that it is not legally possible.

“One can envisage circumstances in which a breach of the Regulations could so affect the members of a union that the law should afford a remedy in public law,” the judge said.

But Mr Justice Eady went on to refuse Unison permission to bring the case on the basis that the union did not have standing.

“Can Unison show that performance of the competitive tendering procedure might have led to a different outcome that would have a direct impact on it or its members?” he asked.

“Not surprisingly, Mr Giffin (counsel for Unison) emphasizes the world ‘might’, selected by Arden LJ rather than ‘would’. That is a fair point to make but, even so, I apprehend that in order to show even what might have happened the burden would rest upon an applicant to support the proposition by some evidence, presumably related to the particular facts of the case before the court, rather than to generalities or mere speculative possibilities.”

Mr Justice Eady said in this case it was not known what might have happened if the procedures contemplated under the Regulations had been meticulously carried out.

“There are no known candidates who could have expected to present themselves as bidders; nor can one speculate as to the terms which possibly have been offered to provide the relevant services,” he said.

“It is thus extremely difficult to see how the Claimant could discharge the burden contemplated in the passage of Arden LJ's judgment from which I have quoted. Contemplation of any such hypothetical scenario is bound to be speculative.

The judge said he could not conclude on the limited evidence before him that Unison was capable of discharging that burden.

He added that Unison had not demonstrated that its members were “affected in some identifiable way” – the test set out by Arden LJ in R (Chandler) v Secretary of State for Children, Schools and Families [2010] LGR 1 – by the decision to outsource with NHS Shared Business Services as opposed to going down the route prescribed by the 2006 Regulations. “It has not established a ‘sufficient interest’,” he added.

Mr Justice Eady said his decision was made very much in the specific context of the 2006 Regulations and of the obiter remarks of the Court of Appeal relating to them.

“It is thus not necessary for me to go so far as to apply the terminology used by Sedley J in Dixon and to hold that the Claimant is a ‘busybody’,” he continued.

“That would be inappropriate and unnecessarily offensive. I confine myself to concluding that I cannot see how Unison can fulfil the specific criteria identified by Arden LJ.”

Mr Justice Eady also ruled that Unision was out of time in bringing the claim.