London borough fails in application for strike-out of part of social care procurement claim

Roger Ter Haar KC, sitting as a deputy High Court judge, had been asked by Tower Hamlets to strike out parts of a claim made by social care contractor Apasen.

Apasen had provided services in Tower Hamlets and in the autumn of 2023 was the subject of anonymous whistleblowing allegations of alleged corruption and financial impropriety.

Tower Hamlets asked accountancy firm PricewaterhouseCoopers (PwC) for advice and none of the allegations were upheld.

But the council later asked PwC to investigate its contracts with Apasen related in part to an alleged overpayment .

In October 2024, Tower Hamlets awarded one new contract to Apasen but then said the contract award depended on the outcome of the investigation.

The following month, Apasen issued proceedings under Regulation 91 of the Public Contracts Regulations 2015 for breach of those Regulations.

Tower Hamlets then abandoned the procurement until March 2025 when it issued a transparency notice under the provisions of the Procurement Act 2023 Act, stating it intended to make seven direct interim contract awards justified by urgency. Only two were for Apasen.

On the same day, it published an intended contract award notice that made no mention of the direct award justification on which the council relied.

Mr Ter Haar said: ”By a decision taken on 18 June 2025, the [council] performed a volte face from the March decision and decided that it would not in fact make a direct award of any contract to the claimant. The other direct awards proceeded.”

This was said to be because of the results of the audit.

Apasen sought disclosure of the documents concerned which Tower Hamlets provided after Apasen began judicial review proceedings challenging the earlier decisions.

Mr Ter Haar said: “An important issue dividing the parties is the correct approach to sub-section 105(4) which renders a contract award notice which does not provide ‘accurate’ information equivalent to a contract award notice which has not been published.

“If a contract award notice has not been published, then a set aside condition in Section 105 has not been met with the consequence under Section 104(2)(a) that the relevant contract must be set aside.”

This meant the issue before him was what was meant by ‘accurate’ information?

He said: “Whilst this is a novel issue under the 2023 Act, there is authority under previous legislation to which both parties drew my attention.

“It seems to me that the problem for [Tower Hamlets] is the requirement that the contract award notice should contain ‘accurate’ information.”

Mr Ter Haar said he could not see how inaccuracy could usually be identified from the face of a notice, and it would be necessary to consider evidence going behind it on the nature of the work concerned.

He said his judgment should not be taken as stating what approach a court should take in deciding whether a contract award notice was accurate or not, which depended on specific considerations.

“If in truth a justification of ‘urgency' was not factually well-founded, then it is at the least arguable that a notice asserting that the urgency criterion was satisfied would not be ‘accurate’”, he said,

A further complication in this case was that ‘urgency’ was mentioned only on the transparency notice, not the contract award notice.

Mr Ter Haar explained: “I accept the point…that the urgency justification had to be contained in the contract award notice, not just in the transparency notice, is arguable.

"Whilst this is not clearly pleaded in the particulars of claim, that deficiency can be cured by amendment, and it is well established that a pleading should not be struck out where it can, without injustice to the party seeking a strike out, be cured by amendment.”

Tower Hamlets has been approached for comment.

Mark Smulian