Braceurself Limited v NHS England

In a procurement damages claim, a breach is not sufficiently serious merely because it caused the wrong tenderer to win the competition. The court must assess the matter objectively and in the round, applying the non-exhaustive Factortame factors. The importance and clarity of the procurement rule, and the fact that the breach changed the outcome, may carry substantial weight, but no single factor is decisive. The court may also consider whether the error was excusable, inadvertent and made in good faith, the purpose of the authority, the impact on the losing bidder and the wider public, and the scale and quality of the procurement. A minor and excusable evaluation error in a close competition may therefore fail the sufficiently serious threshold even where the claimant would otherwise have won the contract.

The claimant, the incumbent orthodontic services provider, claimed damages under the Public Contracts Regulations 2015 after NHS England awarded a seven-year contract to another bidder. In an earlier judgment, the court found that NHS England had made a manifest error in evaluating the claimant’s accessibility proposal. Correcting the score would have changed the winner.

The remaining issue was whether that breach was sufficiently serious to satisfy the second Francovich condition and justify damages. The court therefore considered the relevant authorities and the eight non-exhaustive factors identified in Factortame.

1. Applicable test. Liability for procurement damages required infringement of a relevant right, a direct causal link to the loss, and a breach sufficiently serious to justify damages. The assessment was objective, fact-sensitive and subject to a fairly high threshold. The eight Factortame factors were a useful, non-exhaustive framework, but their weight varied and no factor was necessarily decisive.
2. Importance and clarity. The obligation to award the contract to the tenderer offering the most economically advantageous tender was an important and clear procurement principle. It was wrong to analyse the issue only at the level of the individual scoring discretion. However, those factors could not alone establish sufficient seriousness.
3. Excusability and state of mind. The manifest error was minor, understandable and at the excusable end of the spectrum. It was inadvertent and committed in good faith. The authority’s purpose of maximising access to publicly funded orthodontic services for disabled patients was a relevant mitigating consideration.
4. Impact. The claimant’s loss of the contract was significant but not existential. The wider public was almost equally well served by either bidder, and the effect on access to orthodontic services was very limited. The court was entitled to consider both the impact on the losing bidder and the absence of material impact on wider groups.
5. Outcome and final order. The fact that the error changed the competition’s outcome was highly material but not determinative, particularly because the score difference was only 0.25 percentage points after correction. The breach was not sufficiently serious to justify Francovich damages. The claim for damages was dismissed. Consequential matters, including costs, were left for further hearing.

The judgment was a first-instance decision determining the remaining liability issue after an earlier split trial. The court had previously found a manifest evaluation error and that the claimant would have won the contract absent that error, but reserved the question whether the breach was sufficiently serious for damages.