DWF Llp v Secretary of State for Business Innovation And Skills

A proposed amendment does not add a new cause of action merely because disclosure enables a claimant to replace an inference that something went wrong with particulars explaining what went wrong. A pleading is construed objectively, against the background known to the parties, by asking what a reasonable opposing party would understand the pleader to convey.

In public procurement, equal treatment and transparency are distinct but closely intertwined duties. An unexplained scoring anomaly may support a complaint based on either or both.

When deciding whether to maintain an automatic suspension, the court may apply the American Cyanamid principles. It considers whether there is a serious issue to be tried, the adequacy of damages for each party and the practical balance pending an expedited trial.

The Insolvency Service conducted a procurement exercise for legal services in England and Wales and Scotland. DWF LLP was unsuccessful. Its scores appeared anomalous because its bid scored better in Scotland, where it lacked direct experience, than in England and Wales.

DWF commenced proceedings alleging breaches of the duties of equal treatment and transparency under the Public Contracts Regulations 2006. Later disclosure showed that its England and Wales score had been reduced after a presentation. DWF sought to amend its particulars to allege that unpublished criteria and an arbitrary moderation process had been used.

His Honour Judge Raynor QC refused permission to amend, holding that the amendments introduced a new, time-barred cause of action. He also ordered the automatic procurement suspension to be lifted. The issues on appeal were whether the amendments advanced the existing claim and, if so, to what extent the suspension should remain.

1. Appeal allowed. The proposed amendments did not introduce a new cause of action. They converted a case inferred from the unexplained scoring anomaly into a case particularised by the explanation subsequently disclosed. The amended case remained the same complaint that something had gone wrong in the tender evaluation in breach of duties owed to DWF (Sir Robin Jacob, Black and Arden LJJ agreeing) (paras [35]–[44]).
2. A pleading is construed according to the general principles governing documents. The question is what a reasonable reader would understand its author to convey, having regard to the background known to both sides. The principal reader is the opposing party, because the pleading tells that party the case it must meet. Here, the original pleading repeatedly stated that DWF lacked an explanation for the anomaly. The Insolvency Service's defence confirmed that it understood the pleading as a present challenge to whatever had caused that anomaly (paras [35]–[42]).
3. The duties of equal treatment and transparency under regulation 4(3) of the Public Contracts Regulations 2006 are distinct but closely intertwined. Transparency flows from equal treatment, and the same procurement conduct may breach both. The original references to regulation 4(3), limited available information and the anomalous result therefore encompassed a transparency complaint (paras [16]–[17], [43]).
4. Applying American Cyanamid principles, there was a serious issue whether the post-presentation reduction of DWF's score complied with the published tender criteria. The issue was arguable and required a trial (paras [45]–[49]).
5. Damages would not adequately compensate DWF. Its chance of securing the contract and consequential harm to its insolvency team and reputation could not fairly be quantified. Any loss to the Insolvency Service during the short period before an expedited trial was more readily quantifiable and protected by DWF's cross-undertaking. The suggested operational difficulties were unsupported or manageable by alternative arrangements (paras [50]–[54]).
6. The suspension was maintained only in relation to the proposed contract for Shepherd and Wedderburn. It was lifted for the Scottish contracts and the other successful bidders (para [55]).

1. Court of Appeal (Civil Division): Allowed DWF's appeal against refusal of permission to amend. It maintained the automatic suspension concerning the proposed award to Shepherd and Wedderburn, but lifted it for the other successful bidders: [2014] EWCA Civ 900 .
2. High Court, Technology and Construction Court: His Honour Judge Raynor QC, sitting as a Deputy High Court Judge, refused permission to amend because he considered that the amendments introduced a time-barred cause of action. He ordered the automatic suspension to be lifted, but stayed that order temporarily. No citation is stated.