High Court judge lifts automatic suspension of award of clinical waste contracts by integrated care boards

Mr Justice Waksman said in his judgment that Stericycle, the incumbent contractor, had failed to convince him that damages would be an inadequate remedy should it win and “the application to lift the suspension must succeed”.

The court heard the ICBs had awarded 13 contracts to Sharpsmart and 9 contracts to Personnel Hygiene Services.

Stericycle alleged Sharpsmart should have been excluded from tendering because it had failed the economic and financial standing test which formed part of the tendering process.

This claim was made following disclosures by the ICBs of issues which had arisen in connection with their treatment of Sharpsmart in connection with the EFS test.

The integrated care boards then applied to the court to lift the automatic suspension imposed on their contract awards.

The procurement was for healthcare waste collection and disposal services for primary care facilities. They had the potential to run for nine years, with a total value according to Stericycle of £168m. The ICBs argue that the correct figure is significantly less.

Stericycle alleged breaches of transparency and failures to provide information; failure to determine that Sharpsmart did not meet the economic and financial standing test threshold; failure to provide reasons; failure to verify the tenders submitted; failure to conduct a lawful process of clarification.

The applications to lift and the proceedings generally are governed by the Public Contracts Regulations 2015, not by the Procurement Act 2023. “While the latter is now in force, it only governs procurements which commenced on or after its commencement date, being 24 February 2025,” the judge noted.

The ICBs argued the claim amounted to a 'root and branch' challenge to almost every aspect of their decision making and should also be regarded as a complex claim requiring a decision under the ‘balance of convenience’.

Waksman J said the rankings achieved by Stericycle meant the question of causation “in the sense of what would have happened in any counterfactual (ie absent the alleged unlawfulness) is far from straightforward”.

Stericycle argued that losing the contracts would affect its ability to maintain its facilities and transport fleet and harm its reputation.

But the judge said Stericycle had failed to provide “cogent evidence that damages would not be an adequate remedy so far as closure of facilities is concerned”.

He said points argued about reducing its vehicle fleet were “highly speculative and uncertain, as is the notion that [Stericycle] will become less resilient. I do not consider that there is cogent evidence here.”

On loss of reputation, the judge said the ICBs had argued that any loss would be short-lived if Stericycle succeeded on liability at trial, even if confined to damages.

Stericycle’s only response was that this would not remedy the position pre-trial. The judge said: "I doubt there is such a risk anyway but in any event I do not think there is anything in the loss of reputation point to begin with”.

Waksman J concluded that damages would be an adequate remedy for Steriycle should it win at trial, and “the application to lift the suspension must succeed.

“No exceptional circumstances were advanced to suggest that this usual consequence should not occur here.”

He said this meant the balance of convenience exercise had become academic but would have been settled in the integrated care boards’ favour because the retention of the suspension for well over a year would cause a real problem for the mobilisation required for the new contracts and significant delay to the introduction of improvements.

Law firm Knights acted on behalf of Sharpsmart.

Partner, Michael Peacock, said: “We’re delighted to help our client with this landmark procurement in which success was a vital part of its future strategy. I anticipate that this is going to be a real springboard for its future growth and we are excited to see how the business continues to develop and flourish.”

Stericycle has been contacted for comment.

Mark Smulian