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London borough gets enforcement agencies procurement challenge struck out

The London Borough of Waltham Forest has successfully applied to the High Court for a procurement challenge to be struck out.

The case of Newlyn Plc v London Borough of Waltham Forest (Rev 2) [2016] EWHC 771 concerned the council’s arrangements for contracting out to bailiffs and enforcement agencies its collection and enforcement obligations in relation to council tax, national, non-domestic business rates and business improvement district levy debts.

Waltham Forest’s original arrangements expired on 2 February 2016. Newlyn, the claimant, was the incumbent provider.

The local authority commenced a procurement exercise in order to put in place new contractual arrangements. On 12 January 2015, YPO placed a full notice in the OJEU for a dynamic purchase system. On 16 September, they placed a simplified notice in the OJEU. On 26 October, WF issued an invitation to tender.

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In January this year the council wrote to Equita and Marston Group to say that their tenders had been successful. It also informed the other tenderers, including Newlyn, that they had been unsuccessful.

Newlyn commenced legal proceedings on 29 January 2016, arguing that the council had failed to comply with the Public Contracts Regulations 2015 (PCR). The council then felt unable to enter into contracts with Equita and Marston.

According to Mr Justice Coulson, the real issues between the parties arising out of the council’s application to strike out the claim were as follows:

(a) Issue 1: Did the PCR apply to this procurement exercise?

(b) Issue 2: If not, what were the consequences for Newlyn's pleaded claim?

(c) Issue 3: Was Newlyn's claim more than fanciful or better than arguable?

Mr Justice Coulson found that:

  • On the face of it, it did not seem possible to distinguish this case from the Court of Appeal case of JBW Group Limited v Ministry of Justice [2012] EWCA Civ 8. The judge said he was obliged to conclude that the proposed contract for enforcement agency services in this case was a services concession contract and therefore outside the PCR.
  • He could not – as a matter or law – accede to a request by the counsel for Newlyn that either because the claimant had a legitimate expectation that the PCR would govern the procurement exercise and/or in any event, the court should not strike out the claim, but instead permit Newlyn to make amendments, so as to bring a claim for judicial review. “There are both procedural and substantive authorities that make plain that the court could not and should not turn this Part 7 claim into a claim for judicial review”.
  • Having concluded that the decision was outside the PCR, and having regard to the particular nature of the proposed contract in this case, any application for judicial review in this case “would be doomed to fail as a matter of law. Thus, there would be no purpose in permitting this claim to continue in a new, but fatally flawed, guise”.

Mr Justice Coulson concluded that Newlyn’s claim was “unarguable in law and on the facts”. He struck out the claim.

Joseph Barrett of 11KBW appeared for the London Borough of Waltham Forest.

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