Damages instead of suspension?

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Lancashire Care NHS Trust v Lancashire County Council [2018] 177 ComLR 246 TCC

Facts

The Trust had a contract to supply mental health services to children and adolescents in the Council area.  The Council went out to tender under the Public Contracts Regulations 2015.  The Trust put in a bid but lost out to a competitor.  The Trust issued proceedings challenging the decision as flawed and by Regulation 95 the procurement process had to be suspended.

The Council made an urgent application to the court to lift the suspension under Regulation 96, arguing that damages would be an adequate remedy if the Trust was correct in its challenge, and therefore there was no point continuing the suspension.

Held

  1. Generally if damages are an adequate remedy, the suspension of the procurement process should be set aside and the decision should be implemented. This is by analogy with the rules on claims for injunctions.
  2. The severe disruption that would be imposed upon the Trust by losing its contract to provide these services, and the damage done to the human infrastructure which it had developed for supplying these services (not just to Lancashire County Council but to other public authorities) was such that damages would not be an adequate way of addressing the Trust’s grievance if it proved to be correct.

Comment

It is normal when challenging public procurement decisions to commence proceedings, which automatically trigger Regulation 95 so that the procurement process is suspended.  It is also normal to claim additionally or in the alternative for damages.  Sometimes damages are a more attractive remedy.  In this case however, the claimant’s main concern was not financial, rather, it was the dismantling of its structure and reduction in its capacity, since it would have seriously affected its services to other public bodies, which also had sensitive mental health needs.

For more specialist legal advice call Keith Bishop, Head of Construction & Engineering, on 0191 211 7983 or email [email protected]