Kent Community Health NHS Foundation Trust v NHS Swale Clinical Commissioning Group & Anor

On an application to lift an automatic suspension in public procurement proceedings, damages are assessed by reference to the interests of the party seeking relief. A not-for-profit status, limited financial loss or a public-service mission does not, without more, make damages inadequate. Non-financial effects may suffice where they represent a real interest, such as catastrophic operational consequences, reputation or privacy. The public interest may affect the balance of convenience, but the court should not decide which of two public bodies has chosen the better model for delivering public services. Where there is merely a serious issue to be tried, the court should not assess intermediate degrees of merits. If damages adequately compensate the claimant and the balance is even, the suspension should be lifted, particularly where delay risks preventing timely implementation of the successful procurement.

The claimant NHS foundation trust challenged the defendants’ award of a contract for adult community services to Virgin Care. Proceedings triggered an automatic suspension under the public procurement regime. The defendants applied to set aside that suspension so that the new arrangements could be implemented.

The parties accepted that there was a serious issue to be tried. The principal questions were whether damages would be an adequate remedy for the trust, whether damages would be adequate for the commissioning bodies, how the public interest affected the balance of convenience, and what constituted the relevant status quo.

1. Application granted. The automatic suspension was set aside. The trust’s challenge raised a serious issue to be tried, but it was not a case in which the court could regard either party as virtually certain to succeed.
2. The adequacy of damages had to be assessed by reference to the interests of the party seeking injunctive relief. The trust’s not-for-profit status, public-service purpose and concern that patients might receive less integrated services did not make damages inadequate. Its financial loss could be quantified and compensated. The court would not determine whether the public interest was better served by the trust or Virgin Care.
3. Non-financial or consequential effects could make damages inadequate where they represented a real interest that could not properly be compensated. The evidence did not establish such consequences for the trust. Conversely, there was a significant risk that the commissioning bodies’ losses from continuing with the trust would be difficult to quantify.
4. The public interest was relevant to the balance of convenience. Once the defendants had chosen procurement, the public interests included both lawful competition and the prompt implementation of the arrangements selected by the commissioning bodies. The court could not resolve the competing public-interest assessments of two NHS bodies.
5. The balance of convenience did not substantially favour either side. The relevant status quo was that, after expiry of the trust’s contract, the defendants were free to contract with Virgin Care. In both a conventional and a rolled-up American Cyanamid analysis, it was just to confine the trust to damages.