Energy Solutions Eu Ltd v Nuclear Decommissioning Authority

Failure by an unsuccessful tenderer to trigger the statutory suspension under regulation 47G does not automatically break the chain of causation or bar recovery of damages. The defendant must prove both that the claimant acted unreasonably and that reasonable action would have avoided the loss.

Regulation 47J(2)(c) does not confer a general discretion to withhold damages, or to award less than the loss assessed under ordinary principles, where breach and causally consequential loss are established. The claimant’s conduct remains relevant through causation, avoidable loss and the ordinary assessment of damages.

The claimant, a member of a consortium bidding for a nuclear decommissioning contract, challenged the procurement process after the defendant awarded the contract to another bidder. The claimant issued proceedings after the ten-day standstill period and after the contract had been entered into, seeking damages under the Public Contracts Regulations 2006.

The court tried preliminary issues concerning whether the claimant’s failure to trigger the automatic suspension affected causation and whether regulation 47J(2)(c) gave the court a discretion to withhold or reduce damages. The court also considered the uncertainty arising from the consortium’s unincorporated status and the non-party status of its other member.

1. The claimant’s failure to issue proceedings during the standstill period could not, on the pleaded facts, be determined as breaking the chain of causation. The rule against avoidable loss requires the defendant to prove that the claimant failed to act reasonably and that reasonable action would have avoided the loss. A possibility that the claimant might have avoided the loss is insufficient. Whether those requirements were met was a factual question for trial.

2. The position was further complicated by uncertainty over whether the defendant would have sought to lift an automatic suspension, whether such an application would have succeeded, whether an adequate cross-undertaking would have been offered, and whether the claimant’s consortium could have continued without Bechtel. These matters reinforced the conclusion that causation could not be resolved as a preliminary issue.

3. Regulation 47C creates a cause of action based on breach of the relevant duty and loss or risk of loss caused by that breach. It contains no requirement that the breach be sufficiently serious. This was a domestic claim under the Regulations, not a claim for Francovich or Norbrook damages against a Member State.

4. Regulation 47J(2)(c) uses the word “may”, but that wording does not create a novel general discretion to refuse damages or limit them below the ordinary measure once breach and causally consequential loss are proved. The wording may accommodate causation, avoidable loss, or cases where damage is unproved or unquantified. It does not justify a general discretion based on the gravity of the breach or wider public-interest factors.

5. The answer to preliminary issue b(i) was No. Issue b(ii) therefore did not arise. The court did not finally determine the claimant’s causation or damages entitlement.

First-instance decision. The judgment does not state any subsequent appellate history.