Millbrook Healthcare Limited v Devon County Council

On an application to lift the automatic suspension of a public procurement contract, the court must apply the established interlocutory adequacy-of-damages test. The possibility that damages may ultimately be unavailable because a breach is not sufficiently serious for Francovich purposes is generally not part of that assessment. The court should not conduct a premature merits inquiry or project forward to the likely final remedy. Quantification difficulties do not make losses irrecoverable where they can fairly be assessed by evidence and expert analysis. If damages are adequate for the claimant, it is just to confine the claimant to that remedy. The court may nevertheless consider the defendant’s position and the balance of convenience where appropriate.

Millbrook Healthcare Limited challenged Devon County Council’s decision to award a contract for community equipment and technology-enabled care services to Nottingham Rehab Limited. The procurement was closely contested. Millbrook alleged breaches of the Public Contracts Regulations 2015 and sought declaratory relief, set-aside relief, a re-run or award of the contract, damages and interest.

The Council applied under regulation 96(1) to lift the automatic suspension. Millbrook applied for an expedited trial instead. The central questions were whether damages would adequately compensate Millbrook, whether the risk of failing to obtain Francovich damages should affect that assessment, and where the balance of convenience lay.

1. Automatic suspension. The court applied the four-stage approach summarised in Camelot: whether there is a serious issue to be tried; whether damages are adequate for the claimant; whether damages are adequate for the defendant; and, if necessary, where the balance of convenience lies.
2. There was a serious issue to be tried. Millbrook had not, however, provided cogent or compelling evidence that the alleged losses would be significant and irrecoverable. Loss of profits from the lost contract would be quantifiable from the bid projections, internal documents and expert evidence. Difficulties of calculation were ordinary features of damages claims. Wider alleged effects on reputation, staffing, market position, economies of scale and future bids were speculative or insufficiently evidenced. The alleged rushed transition was also unsupported, particularly given the agreed extension of the existing contract and the anticipated transition period.
3. The risk that Millbrook might establish a breach but fail at trial to satisfy the sufficiently serious breach requirement for Francovich damages did not alter the interlocutory conclusion. Braceurself demonstrated that adequacy of damages at the interim stage and recoverability at trial involve different exercises, governed by different principles and evidence. The court could not conduct a premature merits assessment of the alleged breaches or their seriousness. Effective remedies and fair process did not guarantee a preferred set-aside remedy.
4. Damages were therefore adequate for Millbrook, and it was just to confine it to that remedy. That conclusion was sufficient to determine the application. The court nevertheless observed that continued suspension risked non-compensable harm to the Council, vulnerable service users and the public interest by delaying service improvements and budget savings, and that the balance of convenience favoured lifting the suspension.
5. The application to lift the automatic suspension was granted. The application for expedition was dismissed.