Counted4 Community Interest Company v Sunderland City Council

On an application to lift an automatic suspension under the Public Contracts Regulations 2015, the court applies the ordinary interim-relief approach. The threshold is low: a claim need only raise a serious issue, not be frivolous or vexatious. The balance of convenience requires assessment of the least irremediable prejudice, including the adequacy of damages and the public interest. A procurement conflict may be arguable where a contract manager’s personal interest could be perceived to compromise impartiality. A claimant’s loss of a uniquely trained workforce may make damages inadequate. Suspension should remain where existing services protect the public, no immediate safety risk is shown, and an expedited trial is available.

The claimant, an incumbent not-for-profit provider, challenged the defendant local authority’s procurement for substance-misuse treatment and harm-reduction services. Proceedings triggered the automatic suspension under regulation 95 after the authority notified the claimant of its intention to award the contract to another provider.

The defendant applied under regulation 96(1)(a) to lift the suspension, relying on the alleged weakness of the claim, the adequacy of damages, and the urgency of replacing the existing service. The claimant relied on an arguable conflict of interest under regulation 24, alleged scoring irregularities, the irreversible impact on its workforce, and the availability of an expedited trial. The central issues were whether there was a serious issue to be tried and where the balance of convenience lay.

Application refused. The automatic suspension was maintained, subject to the claimant’s limited undertaking to cover reasonable additional management costs arising from the continued use of three providers until trial.

1. Under regulations 95 and 96 of the Public Contracts Regulations 2015, the court applied the ordinary American Cyanamid v Ethicon Limited [1975] AC 396 principles. The exercise was not weighted in favour of maintaining suspension. The question was whether, absent the suspension, an interim injunction requiring the authority to refrain from entering the contract would have been appropriate. This approach was consistent with Exel Europe Limited v University Hospitals Coventry and Warwickshire NHS Trust [2010] EWHC 3332 (TCC).
2. The application involved two stages: whether there was a serious issue to be tried, followed by the balance of convenience. Adequacy of damages formed part of the second-stage assessment, consistently with NATS (Services) Limited v Gatwick Airport Limited [2014] BLR 697 and Bristol Missing Link Limited v Bristol City Council [2015] EWHC 876 (TCC).
3. The serious-issue threshold was low. It was inappropriate to conduct an extensive merits assessment where disclosure and evidence remained incomplete. There was a serious issue concerning both the alleged conflict and the scoring allegations. Under regulation 24, the phrase other personal interest was broad. It was properly arguable that a contract manager’s interest in protecting his professional reputation or role might be perceived to compromise impartiality and independence.
4. Although lost profits or overhead contributions, including loss of a chance, could be assessed in damages, damages were not adequate for the claimant. The evidence showed that lifting suspension could result in the loss of its uniquely trained workforce and undermine its ability to continue the claim and its remaining business.
5. The public interest was important, including the safety of vulnerable service users and compliance with European procurement obligations. However, the existing service was operating, the evidence did not establish an immediate safety risk requiring urgent replacement, and an expedited trial was available. The balance therefore favoured maintaining suspension. The relative strength of the claim was neutral.