Dukes Bailiffs Limited v Breckland Council

A contract’s label does not determine whether it is a public contract or a concession contract. The court must examine the substance of the contract, assessed prospectively from the procurement documents and the contract awarded.

A services concession requires an enforceable obligation to provide and manage services, consideration consisting of the right to exploit the services, and transfer of operating risk involving real exposure to market risk and more than nominal or negligible potential loss. Debt-enforcement contracts remunerated through fees recovered from debtors may satisfy those requirements even where the contractor is efficient and profitable.

The PCR 15 and CCR 16 must be interpreted consistently with the EU directives they implemented. A below-threshold concession contract falls outside the PCR 15. A commercial procurement decision outside those regimes is generally not amenable to judicial review, although apparent bias in a competitive adjudicative procurement may constitute a sufficient public-law element.

The claimant, an enforcement-agent company, had tendered for a debt-enforcement contract issued by the defendant council through a dynamic purchasing system. It lost to a rival bidder by 2.5 per cent and challenged the award in the TCC, alleging breaches of the PCR 15, including apparent bias, inadequate reasons and erroneous scoring.

It also brought judicial-review proceedings alleging apparent bias, inadequate reasons, legitimate expectation and an Ermakov challenge. The council contended that the awarded contract was a services concession under the CCR 16, below the applicable threshold, and that the decision was not amenable to judicial review.

The court determined whether the relevant contract was governed by the PCR 15, the CCR 16, or neither; whether the statutory procurement claim should proceed; and whether permission should be granted for judicial review.

1. Relevant contract. The relevant contract was the contract awarded to the successful bidder, adjusted to disregard labels inserted after the procurement where they changed form but not substance. The court could also consider the procurement documents, including the ITT and specification, viewed from the perspective of a reasonably well-informed and normally diligent tenderer. A prior DPS agreement was not the contract for the services ultimately procured.
2. Public contract. The adjusted contract was a written contract between an economic operator and a contracting authority, for pecuniary interest and having the provision of services as its object. It therefore fell within the PCR 15 unless excluded as a concession under the CCR 16.
3. Concession. The contract entrusted the provision and management of debt-enforcement services to the contractor. Consideration consisted solely in the right to exploit the services by recovering regulated fees from debtors. The absence of direct payment by the council did not prevent a concession.
4. Operating risk. The contract transferred operating risk. The contractor was not guaranteed any volume of liability orders, had to attempt enforcement without cherry-picking, and bore the risk that debtors would not pay sufficient fees to cover the costs of enforcement. The statutory fee structure did not guarantee recovery of costs.
5. Market exposure. Regulation 3(4)(b) CCR 16 focused on the risk transferred by the contract, not the incumbent’s actual profitability or its estimate of future profit. The contract exposed the operator to fluctuations in demand, non-payment, unrecovered costs and changing economic conditions. The potential loss was therefore more than nominal or negligible.
6. Authorities and interpretation. The reasoning in JBW Group v Ministry of Justice and Newlyn v Waltham Forest London Borough Council remained highly persuasive. The CCR 16 codified, rather than materially changed, the relevant EU-law approach. The PCR 15 and CCR 16 were interpreted consistently with the 2014 directives under the EUWA.
7. Disposition of TCC claim. The claimant had no realistic prospect of success on the PCR 15 claim. Summary judgment was granted and that part of the claim was struck out. The contractual claim, including the arguable possibility of an agreement to conduct the procurement as if the PCR 15 applied, remained for trial.
8. Judicial review. The legitimate-expectation and inadequate-reasons challenges were not amenable to judicial review, or were otherwise unarguable or barred by the statutory no-substantial-difference test. A competitive procurement decision could in principle be reviewable for apparent bias, but the pleaded facts did not give rise to a real possibility of bias and the outcome would not have been substantially different without the evaluator. Permission was refused.
9. The parties were invited to agree directions for the contractual claim, which remained limited to damages.

First-instance judgment. The judgment itself does not describe any prior appeal.