The High Court has adopted a permissive approach to amendments in a procurement dispute, write Emily Heard and Kyle Duggan.
On 21 April 2020 the High Court handed down a surprising decision on a party’s ability to amend its statement of case in a procurement dispute. The case concerned a challenge to how a contracting authority (the NHS Commissioning Board, known as NHS England (NHSE)) had evaluated and scored bids submitted in a procurement for orthodontic referral services.
The judge concluded in Accessible Orthodontics (O) Limited v National Health Service Commissioning Board; Accessible Orthodontics LLP v National Health Service Commissioning Board  EWHC 785 (TCC) that the Claimants’ amendments were simply additional particulars of the existing pleaded case rather than a new claim. Accordingly, the Defendant was unable to persuade the Court that the amendments were time barred.
This judgment is a surprising one which does not reflect the common practice in procurement disputes of claimants amending their statements of case within the 30 day limitation period as disclosure is given. In this case the court adopted a liberal approach towards allowing amendments to the statement of case to bring in new complaints even when a considerable period had elapsed since the grounds for the complaint had been known about. The ruling would appear to allow aggrieved economic operators to plead generally that a contracting authority’s scoring was wrong (as long as they bring their claim in time) but amend their statement of case at their leisure many months down the line, even when the amendment appears to bring in new complaints that would appear to be out of time in their own right. The judgment can be contrasted with the stricter approach to limitation taken in other judgments at the same level, see for example the recent case of Riverside Truck Rental Ltd v Lancashire County Council  EWHC 1018 (TCC) in which the Court struck out a claim issued after the 30 day limitation period. A strict approach was also adopted by Mr Justice Fraser in the case of SRCL v NHS England  EWHC 1985 (TCC). Together these cases demonstrate the vital importance of adhering to the deadlines contained in the PCR. However, the Orthodontics cases suggest that, as long as the claim is issued in time, claimants may benefit from a more liberal judicial approach to amendment thereafter.
The applications to amend were heard by Mr Roger ter Haar QC Sitting as a Deputy High Court Judge. The substantive claim related to the conduct and outcome of two procurement processes run by NHSE for the provision of NHS orthodontic referral services.
The NHS contracts in question were for a seven year period due to commence on 1 April 2019. The Claimants are both small orthodontic service providers and each was the incumbent provider of the relevant services in Oxford City and Thame respectively. It appears that the Claimants are linked in that a Dr Davey is a shareholder in the first Claimant and a member of the second Claimant. The Claimants were notified by way of “standstill letters” that they had been unsuccessful (by a considerable margin) in each of the Lots for which they had bid. The standstill letters contained reasons for the scores awarded to the Claimant and the scores obtained by the winning bidder as well as the characteristics and relative advantages of the successful bid for the Lots in question.
The Claimants each brought a claim under the PCR within the 30 day period required by regulation 92. Both Claimants brought challenges on similar grounds, alleging breaches of the PCR and manifest errors in the scoring of their own bids. Although, by the time the claims were issued, both Claimants knew the scores that had been awarded to the winning bidder(s) for their Lots, and the characteristics and relative advantages of the winning bids, no allegations were made in the claim as originally pleaded about the scoring of the winning bid(s). The claims were issued some months apart (in September and November 2018 respectively) but each was brought within 30 days of the standstill letter that the Claimant in question had received.
In the Defences to both claims NHSE pleaded that there was a great disparity in scores between successful bidder(s) and Claimants and that the Claimants would be unable to demonstrate (and indeed they did not plead) that they would have won the bid but for the alleged breaches. In other words the alleged breaches, even if proved, had not caused the Claimants to suffer or risk suffering loss. NHSE also denied the substantive allegations relating to the evaluation and scoring of bids.
The disputed amendments
The majority of the Claimants’ amendments for which permission was sought related to new matters arising out of evaluator and moderation notes relating to the bids which were disclosed by NHSE in September 2019. NHSE had also provided some information on a without prejudice basis in June 2019. The Claimants did not apply to amend their pleadings until 2 March 2020, some 5-6 months after the grounds upon which their amendments were based became known to them.
In addition, for the first time, the Claimants sought to challenge the scores awarded to the winning bidder(s). NHSE’s position was that the Claimants’ challenge in this regard was based upon the contents of the standstill letters, dating from September and October 2018, some one and a half years’ earlier (and was therefore out of time).
Rules on limitation
Under regulation 92 of the PCR, proceedings must be started within 30 days beginning with the date on which the economic operator first knew, or ought to have known, that the grounds for starting proceedings had arisen. This period can be extended up to a maximum of three months,.
When it comes to amending an already-issued case to introduce particulars of a new breach the position differs depending upon whether the claimant is seeking to bring a new claim or is simply advancing further particulars of an already-pleaded breach. In the former case in a claim under the PCR the 30 day deadline applies and the court may use its discretion to extend time up to a maximum of 3 months from the claimant’s date of knowledge, but only where there is good reason to do so. In the latter case the court has a broader discretion to allow the amendment.
The question for the Court
The question for the Court was whether the amendments constituted a new breach of the PCR which would have required a new claim to be brought under regulation 91, or whether the amendments simply amounted to further particularisation of an existing breach which the Court had discretion to allow. If the former then the new allegations would have been time barred (being raised for the first time more than three months after the standstill letters).
NHSE argued that the challenge to the scoring of the winning bidder(s) bid for the first time was a clear demonstration that the complaint was of a new breach. No challenge had previously been raised in relation to the scores awarded to the winning bidder, despite those scores (and their reasons) having been included in the standstill letters.
The judge found that the amendments did not amount to a new claim. In his view, they amounted to an expansion of the existing pleaded case. The judge defined the existing case in very broad terms as an allegation of the contracting authority’s failure to evaluate the tenders transparently. Given the judge’s finding on that issue he had discretion to permit the amendments, and did so. The judge’s decision appears to have been influenced by the Defendant’s argument on causation (i.e. that the Claimants’ scores were so far below what they required to win the contract that they would have failed regardless of whether the alleged breaches had not occurred). The judge took the view that documents relating to the evaluation and scoring of the winning bids would have fallen within the scope of disclosure in light of that part of NHSE’s Defence.
The judgment is surprising and does not reflect the common practice in procurement disputes of claimants amending their statements of case within the 30 day limitation period as disclosure is given. While that practice can give rise to the need for repeated rounds of amendments (Re-Re-Amended statements of case are not unusual) it has been adopted in response to the court’s hitherto strict interpretation of the time limits provided for in the PCR. This judgment suggests that a pleaded case that is narrowly focussed on the evaluation of one particular bid (for example the winning bid) would be construed for the purposes of amendments as a much broader claim that would permit additional arguments (for example around the scoring of the claimant’s bid) to be raised much later. This could cause practical difficulties with disclosure. A contracting authority may be required to undertake (and the parties would have to agree the scope of) a new search for documents relating to the new claim.
The court in this case was willing to take a very broad view of what the existing pleadings covered rather than adopting the more forensic and narrow approach that has characterised the earlier approach to these questions. It remains to be seen whether this presages a more permissive approach to limitation and amendments generally.
By way of comparison, the recent case of Riverside Truck Rental Ltd v Lancashire County Council  EWHC 1018 (TCC) concerned a claim that was issued after the expiry of the 30 day primary limitation period, and whether the court should exercise its discretion to extend time. In that case Judge Eyre QC adopted a strict interpretation of the time limits and what would amount to a “good reason” to extend time, applying the principles set out in the earlier cases of SRCL Ltd v NHSE  and Jobsin v Department of Health . The claimant in Riverside Truck Rental put forward a range of factual explanations for the delay in bringing the claim, including delays caused by, amongst other things, Christmas holidays, attempts at alternative dispute resolution, and that the claimant lacked the necessary information to enable it fully to formulate its claims. The Claimant also alleged that an extension ought to be allowed in circumstances where doing so would not prejudice the contracting authority (in this case because it had already entered into the contract, but we have equally seen this argument deployed in circumstances where the contract has not been entered into by the time the claim is issued). The Judge gave these arguments short shrift, noting:
“it is relevant that the Claimant was not pointing to matters outside its control as having prevented it from commencing proceedings in time. The reality is that the Claimant failed to start the Procurement Claim in time because it adopted a mistaken view of the appropriate line of challenge and of the applicable time limits and because it was not minded to commence proceedings until it knew whether or not it would have been the successful tenderer if it had not been excluded because until then there was a prospect that the proceedings would not be worthwhile commercially. None of that amounts to a good reason for an extension and I have concluded that even when the matter is viewed in the round there is no good reason for an extension and so the application for an extension must fail.”
The judge endorsed the comments of Mr Justice Fraser in SRCL Ltd v NHSE in which he suggested that there “can, and potentially should, be multiple proceedings in relation to the same procurement exercise” and that different grounds of complaint arising from different deficiencies in a procurement exercise will mean that there are different dates for the start of the 30 day limitation period under regulation 92(2) of the PCR. He referred to the regulations which specify a short limitation period in public procurement and he emphasised the good policy reasons that challenges be brought promptly to minimise disruption and delay to public service contracts.
Factors that a court will consider when exercising discretion
While each case will turn on its own particular facts, there is some guidance in the earlier cases as to the factors that the court will take into account when determining whether to exercise its discretion to extend time. It is submitted that these factors should also be considered when determining an application to amend a statement of case to include new allegations, rather than further particularise an already pleaded one.
Fraser J. in SRCL v National Health Service Commissioning Board  considered the following factors at para. 154:
- There must be a good reason for extending time.
- Whether there was a good reason for the claimant not issuing within the time required, e.g. illness or something out of the claimant's control which prevents compliance.
- Consideration of all the circumstances of the particular case.
- Prejudice to the defendant. Delay alone could constitute prejudice (this is not a determinative factor).
- There may be other features relevant to public policy which are integral to strict time limits
Stuart-Smith, J. in Amey v West Sussex  at para 35:
- The importance of the issues in question.
- The strength of the claim.
- Whether a challenge at an earlier stage would have been premature, the extent to which the impact of the infringement is unclear and the claimant's knowledge of the infringement.
- The existence of prejudice to the defendant, third parties and good administration.
Dyson LJ in Jobsin v Department of Health , explained that commercial considerations on the part of the claimant were not a good reason when assessing the reasonableness of not starting proceedings by a claimant.