Newlyn Plc v London Borough of Waltham Forest (Rev 2)

A procurement for enforcement agency services was a services concession contract and was therefore outside the Public Contract Regulations 2015. A claim founded solely on an alleged breach of those Regulations was consequently unsustainable.

A claim issued under CPR Part 7 could not generally be converted into judicial review proceedings. In any event, the contractual award decision was not amenable to judicial review because it lacked a sufficient public law element. References to procurement regulations did not create a legitimate expectation unless they amounted to a clear, unambiguous and unqualified representation. The pleaded challenges were also incapable of establishing irrationality and were struck out.

Newlyn, the incumbent provider of enforcement agency services for the London Borough of Waltham Forest, challenged the rejection of its tender in a procurement exercise. It brought a claim under the Public Contract Regulations 2015 and sought to prevent the authority from contracting with the successful tenderers.

The authority applied to strike out the claim. The issues were whether the Regulations applied, whether the claim could be amended or transformed into judicial review proceedings if they did not, and whether the proposed grounds were more than fanciful or better than arguable.

1. The claim was struck out. The proposed enforcement agency services contract was a services concession contract within Regulation 2(1) of the Public Contract Regulations 2006. The contractor retained monies recovered through enforcement, giving it the right to exploit the services. Following JBW Group Ltd v Ministry of Justice [2012] EWCA Civ 8, the contract was outside the scope of the Public Contract Regulations 2015 by virtue of Regulation 117.

2. Because the pleaded claim depended entirely on breach of those Regulations, that conclusion was fatal to it. A claim commenced under CPR Part 7 could not generally be converted part way through the proceedings into a judicial review claim. The court accepted the principle stated in R (on the application of Townsend) v Secretary of State for Work and Pensions [2011] EWHC 3434 (Admin), consistently with O’Reilly v Mackman [1983] 2 AC 237.

3. The proposed award decision was not amenable to judicial review. The procurement was essentially commercial and lacked the additional public law element required where a public body enters into a contract. The court applied the principles in R v Lord Chancellor’s Department ex parte Hibbit and Sanders [1993] COD 326, R (on the application of Menai Collect Ltd and others) v Swift Credit Services Ltd [2006] EWHC 724 (Admin), and R (on the application of Gamesa Energy UK Ltd) v National Assembly for Wales [2006] EWHC 2167 (Admin). Any proposed judicial review claim would therefore have been bound to fail.

4. The references to the Regulations in the tender documents did not amount to a legitimate expectation. They were insufficiently clear and unqualified, and there was no evidence of actual or detrimental reliance. The requirement identified in R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs [2009] 1 AC 453 was not met.

5. Even assuming that judicial review were theoretically available, the individual complaints were not arguable. The authority was entitled to disregard material exceeding the specified page limits, was not obliged to take up every reference, applied the stated 0–4 scoring range despite a typographical 0–5 reference, and was entitled to consider price where commission was payable. There was no basis for irrationality.

6. Since the Regulations did not apply, no automatic suspension prevented the authority from contracting with the successful tenderers.