Welsh health board secures summary dismissal of procurement claim over award for mental health sanctuary service

Bidders can no longer sue in England and Wales for breach of general principles of European Union law governing the award of below-threshold contracts, the High Court has ruled.

The case of Adferiad Recovery Ltd v Aneurin Bevan University Health Board [2021] EWHC 3049 (TCC) involved a claim by Adferiad Recovery against Aneurin Bevan University Health Board after it was unsuccessful in a tender process for a mental health sanctuary service. 

The claimant sued for damages for alleged breaches of the Public Contracts Regulations 2015, of general principles of EU law and of an implied contract.

The board was represented by barrister Jorren Knibbe, of No5 Chambers, and applied successfully for summary judgment and/or strike out of the claim, on the grounds that the procurement was for a below-threshold contract - so that no action could be brought under the Public Contracts Regulations 2015 - that no action could be brought in post-Brexit domestic law for breach of EU general principles on the award of below-threshold contracts; and that no tender process contract arose on the facts.

HHJ Keyser QC allowed the application on all grounds and dismissed the claim.

Mr Knibbe said the judgment addressed in detail the interpretation of the Common Procurement Vocabulary contained in Regulation (EC) No. 2195/2002 and the correct approach to classifying services for which there is no specific code.

The judge accepted the board’s argument that the services in question were “social and other specific services listed in Schedule 3” to the 2015 Regulations with the consequence that a higher financial threshold applied.

Mr Knibbe said the judge also found that bidders can no longer sue in England and Wales for breach of general principles of EU law governing the award of below-threshold contracts, for reasons that included actions for breach of EU general principles being precluded by Schedule 1 to the European Union (Withdrawal) Act 2018.

HHJ Keyser further found that a ‘tender process contract’ will only be implied where there is an “objectively demonstrated intention to undertake the contractual obligations relied on” – and not where the contracting authority expressly states in the procurement documentation that it does not intend for such a contract to arise.