Bechtel Ltd v High Speed Two (HS2) Ltd ((No.2) Costs of the Interested Party)

Costs are discretionary, but an interested party in procurement litigation must ordinarily show either a separate issue on which it was entitled to be heard or an interest requiring separate representation. Winning the procurement does not itself justify joinder or a costs order.

The court must consider the terms of any order defining the interested party’s participation. Participation at one procedural stage does not automatically extend to later stages or entitle the party to costs for the proceedings generally. Unusual features, including the scale and importance of the project and the sensitivity of information requiring protection, may justify recovery of costs. Costs incurred on an issue outside the party’s authorised participation are not recoverable merely because that issue could materially affect it.

Bechtel challenged HS2’s award of the contract to the BBVS consortium for construction work at Old Oak Common. The procurement challenge failed on liability and was dismissed in the earlier judgment, [2021] EWHC 458 (TCC). BBVS, which had been joined as an interested party for issues concerning disclosure and inspection of its confidential information, applied for two categories of costs.

The first comprised costs of complying with confidentiality-ring provisions and protecting its confidential information. The second comprised costs incurred in considering Bechtel’s claim for a declaration of ineffectiveness concerning the contract. The central issue was whether either category was recoverable under the court’s discretionary costs jurisdiction.

1. Applicable principles. The court had power under section 51 of the Senior Courts Act 1981 to determine by whom and to what extent costs should be paid. That discretion had to be exercised in accordance with the Civil Procedure Rules 1998, particularly CPR Part 44 and rule 44.2.
2. An interested party would ordinarily need to show a separate issue on which it was entitled to be heard, not covered by the contracting authority, or an interest requiring separate representation. Winning the procurement did not automatically confer interested-party status or an entitlement to costs. The order granting that status defined the permitted participation, and participation at one stage did not automatically extend to subsequent stages.
3. The approach in Bolton MDC v Secretary of State for the Environment [1995] 1 WLR 1176 supported those principles. The court retained a broad discretion, and unusual features could justify a second set of costs. The scale and importance of the project, the reputational consequences, and the need to protect commercially sensitive tender information were relevant features.
4. Group M UK Ltd v Cabinet Office [2014] EWHC 3863 (TCC) concerned an interested party that had been authorised to give evidence and make submissions on an application to lift an automatic suspension. It could not be applied generally to BBVS, which had not participated in the substantive hearings and sought no costs for that application.
5. BBVS’s costs of complying with the confidentiality-ring provisions were within the express scope of the order joining it as an interested party. Its separate interest in protecting highly sensitive information justified representation, and those costs were recoverable subject to detailed assessment on the standard basis if not agreed.
6. The costs concerning the declaration of ineffectiveness were not recoverable. No order permitted BBVS to participate on that issue, and the issue had not reached the stage at which BBVS had applied for or obtained such participation. Its interests in resisting the remedy substantially matched HS2’s interests, so no separate issue or distinct need for representation had been established. The application therefore succeeded on the confidentiality costs and failed on the ineffectiveness costs.

First-instance decision. The related liability judgment was [2021] EWHC 458 (TCC), in which Bechtel’s procurement claim was dismissed.