Mermec UK Ltd v Network Rail Infrastructure Ltd

In procurement challenges under the Utilities Contracts Regulations 2006, time begins when the unsuccessful tenderer knows the basic facts which would reasonably indicate an infringement. Certainty, complete evidence, legal advice or fully particularised pleadings are unnecessary. The tenderer must still serve the claim form within the applicable three-month period. The minimum standstill period does not extend that period. An extension requires a good reason, and unexplained delay will not suffice. Information failures may constitute regulatory breaches, but do not necessarily establish recoverable loss without a substantive failure such as unfair evaluation or incorrect scoring.

Mermec was an unsuccessful tenderer for Network Rail’s plain line pattern recognition project. Network Rail notified Mermec on 23 September 2010 that Omnicom had won, giving the award criteria, scores and brief reasons. Mermec sought further scoring information and later alleged failures to disclose information, incorrect scoring and failure properly to evaluate its proposed solution.

Mermec issued its claim on 22 December 2010 but served it on 30 December 2010. Network Rail applied for summary judgment, principally on the ground that the claim was out of time under regulation 45D of the Utilities Contracts Regulations 2006. The central issue was when time began to run and whether there was good reason to extend it.

1. Summary judgment granted. Mermec’s claim was bound to fail because the claim form was served outside the applicable limitation period.

2. Following the approach in Sita UK Ltd v Greater Manchester Waste Disposal Authority [2011] EWCA Civ 156, the relevant knowledge was knowledge of the basic facts which objectively indicated an arguable infringement. A claimant need not know the complete evidential case, obtain legal advice, or be certain that an infringement occurred. The distinction is between the grounds of complaint and the detailed particulars or evidence used to prove them.

3. The essential facts relied upon by Mermec were apparent from Network Rail’s notification of 23 September 2010. Mermec knew the scores, the award criteria and the relevant comparison with Omnicom. Its complaints about scoring and evaluation therefore crystallised on that date, or within one or two days at most.

4. Regulation 45D(2) required proceedings to be started promptly and in any event within three months. Under regulation 45D(5) proceedings were started only when the claim form was served. Regulation 45D(3) created a minimum period before which proceedings need not be started; it did not add ten days to the three-month period.

5. No good reason justified extending time. The claim was ready for service on 22 December 2010, but no explanation was given for the further delay until 30 December. The shortness of the delay was insufficient.

6. The court did not need to determine whether the notification contained all information required by regulation 33. It observed that failures to provide further scoring information might breach the Regulations but would not, without more, obviously cause recoverable loss. The unpleaded allegation of a rigged bidding process was unsupported and could not defeat the application.