Medequip Assistive Technology Limited v The Mayor and Burgesses of the Royal Borough of Kensington and Chelsea & Ors

In a procurement challenge under the Public Contracts Regulations 2015, the court applies the American Cyanamid Co v Ethicon Ltd approach to an automatic suspension. The claimant must show a serious issue and then that damages would be inadequate, assessed broadly and in the round. If that threshold is crossed, the court considers the defendant’s position and the balance of convenience. Public-interest arguments do not create a separate presumption for maintaining the suspension absent corruption. The decisive question is which course carries the lesser risk of irremediable harm. Here, the claimant narrowly showed possible difficulty quantifying damages, but the balance favoured the public authority and successful tenderer. The suspension was lifted, and expedition was refused for want of real urgency.

The claimant challenged the defendant’s procurement of a new framework agreement for community equipment services on behalf of twenty-one London boroughs. The interested party was the only other tenderer and had been selected as the intended contractor.

The claim triggered the automatic suspension under the Public Contracts Regulations 2015. The defendant applied under regulation 96(1) for the suspension to be lifted. The claimant applied for expedition of the trial. The issues were whether the suspension should remain in place pending trial and, if so, whether the claim should be expedited.

1. Outcome. The application to lift the automatic suspension was granted. The claimant’s application for expedition was refused.
2. Applicable approach. The question whether to lift the suspension under regulations 95 and 96(1) was approached as the question whether an interim injunction restraining placement of the contract would be granted. The principles derived from American Cyanamid Co v Ethicon Ltd [1975] AC 396 therefore applied sequentially.
3. The claimant accepted, and the court found, that there was a serious issue to be tried. This was a low threshold and did not involve a mini-trial. The apparent strength or weakness of the claim could be considered only exceptionally, where undisputed evidence showed a disproportionate difference between the parties’ cases. That was not established here.
4. The claimant had to show that damages would be inadequate, or that it would be unjust to confine it to damages. The inquiry was broad and concerned the circumstances in the round. Difficulty quantifying a lost chance could make damages inadequate, but most alleged losses were either quantifiable, speculative or modest. The claimant narrowly surmounted this hurdle because the allegation that undisclosed criteria had been used could create difficulty in quantifying the loss.
5. Damages would not ordinarily be adequate for a public authority where maintaining the suspension prevented it from providing public services in the form or on the terms it had chosen. The consortium’s inability to implement the new service arrangements was therefore not adequately compensable in damages.
6. The balance of convenience required the court to select the course creating the least risk of irremediable harm if the merits were later decided differently. Relevant considerations included the claimant’s modest risk of irreparable loss, the public authority’s inability to implement its chosen arrangements, the successful tenderer’s mobilisation difficulties, the likely duration of the suspension, the public interest in allowing lawful decisions to take effect, and the status quo ante. The public interest in proper procurement and the possibility of double payment did not, without corruption, justify maintaining the suspension.
7. Expedition required objectively viewed real urgency, having regard to good reason, the due administration of justice, prejudice to the other party and any special factors. Once the suspension was lifted, the claimant’s risk was modest and there was insufficient urgency to justify expedition.