Solent NHS Trust v Hampshire County Council

In an application to lift the statutory suspension in a public procurement challenge, the court applied the established interim-injunction approach: serious issue to be tried, adequacy of damages, and the balance of convenience. The court should not conduct a premature detailed assessment of the procurement merits where the evidence is limited. Damages may be adequate even where a tenderer alleges lost reputation, operational disruption or loss of related work, if those consequences are insufficiently established or can be compensated. Public interest in compliance with procurement rules is relevant but not conclusive. The balance must be assessed across all the circumstances, including the effect of delay on vulnerable service users and the timely delivery of improved public services.

Hampshire County Council sought to lift the statutory suspension preventing it from entering into a new contract for county-wide integrated adult substance misuse recovery services. Solent NHS Trust, the incumbent provider, had come second in the tender competition and challenged the evaluation, alleging errors in marking, departure from the published criteria, undisclosed criteria, and the failure to reject the winning tender after it scored zero for price and cost.

The court accepted that there was a serious issue to be tried, although the complaint concerning the zero price score appeared weak because the tender documents reserved a discretion not to proceed against a tenderer receiving that score. The application therefore turned principally on whether damages were an adequate remedy and where the balance of convenience lay.

1. Application granted. The statutory suspension was lifted immediately.
2. The court applied the principles in American Cyanamid Co v Ethicon Ltd [1975] AC 396, as developed in subsequent authority. There was a serious issue to be tried. The court could not responsibly decide on the limited evidence whether the complaints about the marking of six questions were strong or weak. The complaint that the successful tender should have been rejected for scoring zero on price and cost appeared very weak, since the tender documents reserved a discretion not to proceed, but that did not remove the serious issue arising from the marking complaints.
3. Damages were an adequate remedy. Any lost profit or wasted tender costs could be quantified. The alleged reputational loss was unpersuasive, particularly because the incumbent had performed well and could still pursue its liability claim. The alleged effects of staff transfers under TUPE on related contracts were not established by convincing evidence. Nor was it shown that the loss of guaranteed bed provision would make the existing treatment facility unviable.
4. In accordance with Iraci v Fallon [2011] EWCA Civ 668, the question was whether, in all the circumstances, it was just to confine the claimant to damages. Public interest considerations could be taken into account, including the effect of delay on vulnerable service users and the delivery of planned improvements. That interest was relevant but not conclusive, and the court had to assess the whole spectrum of factors.
5. The balance of convenience firmly favoured lifting the suspension. Maintaining it would delay the integrated and improved service, potentially for several months, while the incumbent could continue providing the existing service pending an expedited trial. The application was allowed, with an expedited trial in June 2015 identified as manageable if required.