Manchester City Council

Cheshire East Council

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Procurement challenges, the automatic suspension and expedited trials

Madeleine Nankervis examines a recent procurement case where the High Court had to consider the defendant's application for the automatic suspension to be lifted and the claimant's application for an expedited trial.

In a judgment handed down on 4 August 2021 Mrs Justice O’Farrell refused the contracting authority’s application to lift the automatic suspension in circumstances in which damages would be inadequate for both the contracting authority and the economic operator. In reaching her decision, Mrs Justice O’Farrell had to weigh up important public interest considerations against the backdrop of the recent inquiry into the Grenfell tragedy and the Court’s ability to order an expedited trial.

Background

The case of Draeger Safety UK Ltd v London Fire Commissioner [2021] EWHC 2221 (TCC) concerned a procurement conducted by the London Fire Commissioner (‘LFC’) in respect of respiratory protective equipment (“RPE”). Draeger Safety UK Limited (‘Draeger’) was the incumbent provider under a contract awarded in 2010. LFC wished to upgrade its existing equipment to improve the safety of its firefighters and its ability to effectively respond to emergencies in London. It issued a contract notice in August 2020 for a ten year contract for the supply of RPE with repair and maintenance services. Draeger submitted a bid but lost out to the successful bidder, MSA Britain Limited (“MSA”).

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On 23 April 2021, Draeger commenced proceedings against LFC alleging breaches of the Public Contract Regulations 2015 (‘PCR’) triggering the automatic suspension under regulation 95(1) of the PCR, thus preventing LFC from entering into the contract with MSA.

Application to lift

In determining whether to lift the automatic suspension the Court must ask itself four questions (American Cyanamid v Ethicon [1975] AC 396):

  1. Is there a serious issue to be tried?
  2. 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?
  3. If not, would damages be an adequate remedy for the defendant if the suspension remained in place and it succeeded at trial?
  4. 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?

The Court was satisfied that there was a serious issue to be tried as it was satisfied that the claim met the low threshold of not being frivolous or vexatious. Therefore, the key questions were whether damages were an adequate remedy for both parties and if in doubt, where the balance of convenience lies.

Adequacy of damages

Draeger’s position was that damages would not be an adequate remedy for it, were the suspension to be lifted and it went on to succeed at trial. Draeger argued that there was a substantial risk to its reputation as this was a significant contract and LFC had a very high profile as a fire service, and the market for such equipment was limited.

Mrs Justice O’Farrell did not consider the procurement to be unique or high value. However, as it was being watched by other fire and rescue services and was “likely to be perceived as setting the standard for improved protective equipment in the sector” it was considered “arguable” that if the automatic suspension was lifted, Draeger could suffer reputational damage for which damages would not be adequate.

LFC similarly argued that damages would not be an adequate remedy for them were the suspension to remain in place and it went on to succeed at trial. Its main argument was that the procurement arose against the backdrop of the inquiry into the Grenfell disaster, and delaying the replacement of outdated RPE and the associated improvements to LFC’s operations could not be quantified or fairly compensated by way of damages. It was noted that there have been great advancements in RPE technology with newer models being lighter and smaller. Crucially, the weight of RPE contributes to heat strain and has a detrimental effect on weight-bearing joints of firefighters. Whilst the current RPE was not said to be unsafe, LFC argued that newer, lighter RPE would result in significant operational benefits.

The Court accepted the evidence provided by LFC and concluded that it was likely that damages would not be an adequate remedy for LFC were it to succeed at trial.

Balance of convenience

One might expect then, if damages would only arguably be inadequate for Draeger but damages would be inadequate for LFC, that the balance of convenience would lie in favour of LFC and the automatic suspension would be lifted. However, this was not the conclusion reached by the Court.

The Court considered that the public interest in the timely introduction of new protective equipment was a significant factor in favour of lifting the suspension. However, in this case, as the Court was able to offer the parties an expedited trial to take place in October 2021, the impact on LFC’s overall implementation strategy would be limited. Mrs Justice O’Farrell concluded that as the new RPE equipment was due to be in operation by May 2022, a short delay to resolve the procurement challenge would not have any significant impact on the timetable for implementing the improvements. As such, the automatic suspension was maintained pending an expedited trial of the dispute.

Key points for contracting authorities and bidders

  1. Whilst the public interest will be taken into account by the Court, it will be weighed against other factors such as how long the suspension might have to be kept in force.
  2. The Court’s timetable and ability to order an expedited trial will be a factor in the court’s consideration of whether to lift the automatic suspension. This may create uncertainty as practitioners will be unware of whether the Court has capacity to order an expedited trial, but early enquiries of the listing offices (in all Registries) would be advisable.

Parties that request an expedited trial should ensure that they have the expertise and resources to meet the tight timescales involved.

Madeleine Nankervis is a trainee solicitor at Bevan Brittan.

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