High Court Allows Amendment to Dental Procurement Challenge
Given the high level of litigation in connection with dental procurement in the last 12 months, it is perhaps unsurprising to see a reported case involving the challenge of a dental procurement run by NHS England.
In a recent decision, the High Court has ruled that a dental provider may amend its claim brought under the Public Contracts Regulations 2015 (PCR), after the claim had been issued and despite the strict limitation deadlines that apply to the commencement of procurement challenge claims.
What Was the Original Claim?
Two linked dental providers, Accessible Orthodontics Ltd and Accessible Orthodontics LLP (AO), each bid unsuccessfully for contracts for the provision of NHS orthodontic referral services. AO was the incumbent provider for both contracts, yet scored only 47.75% (winning bidder scored 80.25%) and 44.75% (winning bidder scored 65.25%).
AO issued two court claims against NHS England within the strict 30 day time limit for bringing such claims (breach of PCR claims must be made within 30 days of the date on which the claimant knew or ought to have known that grounds for starting the proceedings had arisen). The two claims were so similar that the parties agreed that they should be considered together.
AO alleged breaches of the PCR (relating to transparency and equal treatment) and manifest errors in the scoring of its bids. It did not allege that there were errors in the scoring of other bidder's bids.
What Was the Amended Claim?
AO applied to amend its claims to include an allegation that the manifest errors in scoring applied not just to AO's bids, but to the evaluation of other tenders. These new allegations arose from the disclosure of evaluator and moderation notes relating to the scoring of AO's bids, and training materials. The application to amend the claim was made more than 30 days after disclosure had been made, and therefore outside the strict time limit for issuing such a claim.
What Did the High Court Rule?
The High Court considered whether the amendments amounted to an allegation of a new breach of the PCR, which would be caught by the 30 day time limit or simply provided further details of an existing breach. It concluded that the new allegations were "additional particulars of the existing pleaded case. The core case was and remains an allegation of a failure to evaluate the tenders in a transparent manner."
NHS England had raised concerns that allowing the allegations would lead to additional disclosure of confidential documents relating to the winning tenders and the tenders themselves. This would increase the scope of disclosure and witness evidence required, adding time and cost to the trial. The High Court's response was that, given that NHS England had cited the large gap between AO's scores and those of the winning bidders as a causation defence, similar investigations would have been required in any event.
Was This Decision Unexpected?
Yes. Generally the courts take a very strict approach to the 30 day deadline for issuing claims. This can be seen in another recent case, brought by Riverside Truck Rental Limited (Riverside) against Lancashire County Council.
Riverside delayed issuing its PCR claim, which stemmed from its allegation that it had been inappropriately excluded from the evaluation process, until it had received disclosure of the scoring and price of the winning bidder's tender. At that point Riverside discovered that, but for the exclusion, it would have been the 'Most Economically Advantageous Tenderer'.
The High Court ruled that it must consider the date when Riverside had knowledge of the breach that had caused loss or the risk of loss. Riverside could not delay issuing proceedings until it knew that the breach had in fact caused loss and that it was worthwhile, commercially, to pursue a legal claim.
Having concluded that the claim was out of time, the court considered whether it could exercise its discretion to extend time (up to three months) for a claim under PCR. The PCR provides that an extension may be granted when the court "considers there is a good reason for doing so." The court confirmed that commercial factors for the claimant will not amount to a good reason. There is no definitive list of the types of reason that would be accepted, but a successful argument would usually relate to a factor, outside of the control of the claimant, that impacted upon the ability of the claimant to issue the claim.
Disclosure Decision
The High Court also considered whether to order disclosure of the marks of other tenderers and the reasons for those marks. The High Court's decision illustrates the restricted approach that the courts take to disclosure.
The High Court ruled that disclosure should not be granted for the following reasons:
- Disclosure of commercially sensitive documents should only be ordered if necessary in the interests of justice - a high hurdle.
- Much of the information requested should already be in the standstill letter.
- In relation to one claim, there was no pleaded claim "which directly opens up an examination of the marks of the other bidders."
Implications of Coronavirus (COVID-19)
In light of restrictions related to COVID-19, AO's hearing was conducted by telephone and Riverside's hearing by way of a Skype video call. This is in line with our experience in other cases. The courts are keen for justice to prevail and for hearings to go ahead virtually wherever possible.
What Does This Mean for You?
These two recent cases provide another reminder that bidders should be aware of the 30 day time limit for pursuing a claim for breach of the PCR. If you have any concerns about a procurement process or decision, you must act quickly to avoid losing the opportunity to commence a legal challenge. Time starts to run from the date that you become, or should have become, aware of a problem with the procurement process. This may well mean contacting a solicitor prior to the commissioner making an award decision. It is also important to give full disclosure of your concerns to the solicitor to ensure that any legal claim captures all relevant concerns at the outset.
In the case of AO, while the dental provider was ultimately permitted to amend its claim at a relatively late stage, it came close to missing out on the opportunity to argue its full claim.
The case also highlights the court's reluctance to disclose commercially sensitive documents, which means that it can be difficult to gain access to other bidder's bids and scoring data.