Do not pass go?
There have been a number of cases on the lifting of an automatic suspension of the award of a contract. Manish Soni analyses a recent ruling.
In a recent case The Pirbright Institute (Pirbright) [1], made an application for the lifting of an automatic suspension that had been imposed by the Public Contracts Regulations 2006 (the Regulations) 2].
Circumstances of the application and approach taken by the Court
Pirbright is a registered charity concerned with the research of virulent diseases primarily in farm animals and the nature of the spread of viral infection from animals to humans. Pirbright receives its funding from a mixture of government and Research Council grants. The claimant, Advanced Business Software and Solutions Ltd (ABS) is a software company and a provider of financial procurement software for UK public services providers.
The proceedings, centred around a dispute over the public tender of a single, integrated, IT software system by Pirbright to replace their two existing software systems (the IT Contract).
As a result of the commencement of the proceedings by ABS on 12 November 2014, alleging breaches of the Regulations following the award of the IT Contract to another bidder, the IT Contract award was suspended pursuant to the Regulations. This left Pirbright in 'limbo', without the installation of any new system pending the first instance court hearing.
As is common in cases involving suspension-lifting applications, the general criteria from the case of American Cyanamid [3] applied in meeting the requirements of the Regulations [4]. The Court had to decide whether there is a serious issue to try, whether damages are adequate as a remedy and where the balance of convenience lies, that is, whether in favour of injunctive relief.
In this case, the Court had little doubt that the case was sufficiently serious but damages were an adequate remedy since in these proceedings there was clear quantification of damages recoverable, despite some arguments to the contrary by ABS. The Court considered the 'balance of convenience' issue. In the circumstances, the Court recognised that Pirbright performed an important public function and was a registered charity. Pirbright researchers and scientists would be forced to continue using old and outdated software systems and, as such, that the balance of convenience lay in lifting the suspension. The application by Pirbright was therefore granted and the suspension was lifted enabling the authority to award the contract.
Comment
There has been a clear trend towards lifting automatic suspensions invoked by the Regulations, often as a result of public interest requiring that a contract be awarded and the general availability of an adequate alternative remedy via damages.
It is important, however, to be clear on reasons which might lead to the continuation of suspension, such as indistinct quantification of damages and an assessment of the balance of convenience towards keeping an injunction in place. There is case law where suspensions have been maintained and authorities will want clear, pragmatic advice on the merits of such a claim.
Manish Soni is a solicitor in the Commercial Team at Veale Wasbrough Vizards. He can be contacted on 020 7665 0918 or This email address is being protected from spambots. You need JavaScript enabled to view it..
[1] Advanced Business Software and Solutions Ltd v Pirbright Institute [2014] EWHC 4651 (TCC)
[2] Regulation 47G
[3] American Cyanamid Co v Ethicon [1975] AC 396
[4] Regulation 47H deals with the requirements for the lifting of automatic suspensions
