The High Court (Kerr J) has today handed down a landmark judgment on liability and remedy in Consultant Connect Limited v (1) NHS Bath ICB (2) NHS Gloucestershire ICB and (3) NHS Bristol ICB (Interested Party: Monmedical Limited) [2022] EWHC 2037 (TCC), following a five-day trial in June.
The Defendants were NHS clinical commissioning groups in the South West of England. They ran a joint procurement for a contract to provide “advice and guidance” services, by which GPs use an app to seek advice from hospital consultants about their patients. Following a product demonstration event at which the Defendants scored the Claimant’s and Interested Party’s products against undisclosed criteria, the Defendants decided to award the contract using a framework agreement, of which the Interested Party was a member but the Claimant was not. The Defendants then purported to conduct a mini-competition under the framework, inviting a bid only from the Interested Party. Following direct negotiations with that supplier as to various commercial terms, the Defendants awarded the contract to the Interested Party.
The Court made wide-ranging findings of breach, including that:
- The Defendants decided to use the framework in order to effect the direct award of the contract to the Interested Party, in breach of the principles of equal treatment and transparency given effect by reg. 18 Public Contracts Regulations (“PCR”) 2015 (§242).
- The mini-competition was unreal, in breach of the requirements of equal treatment and transparency and in breach of the required procedures for mini-competitions in reg. 33 PCR 2015, because only one operator was invited to bid, the Defendants’ requirements were tailored to that bidder, and the pricing agreed with that bidder bore little resemblance to the pricing in the framework agreement (§§212-216, 249).
- Two relevant staff members involved in the procurement had conflicts of interest, and the Defendants took no appropriate measures to prevent, identify and remedy them, in breach of reg. 24 PCR 2015 (§§260-265).
The Court rejected the Defendants’ central defence, that the Claimant was not entitled to challenge the use of a framework agreement of which it was not a member. The Court found that a challenge to a call-off may be brought by a non-member of the relevant framework, if the facts show that the contract award breached a relevant duty owed to the non-member and that the non-member suffered or risked suffering loss in consequence (§150). That was the case here (§291).
The Court made an order shortening the contract with a view to giving the Defendants an opportunity to conduct a lawful procurement, for what is thought to be the first time in this jurisdiction (§314). The Court also ordered the Defendants to pay civil penalties to the Minister for the Cabinet Office (§§321-325). The Court further found that the breaches, giving rise to a claim for damages on loss of chance principles, were sufficiently serious to merit an award of damages (§353).
The judgment addresses a wide range of important issues in procurement law including, in particular: using a framework agreement to appoint a preferred supplier, the legal obligations applicable to ‘pre-procurement’ activity, the principles governing the conduct of mini-competitions under framework agreements and the nature and extent of the obligations imposed on contracting authorities to address conflicts of interest. The decision is required reading for all of those who practise and work in this field.
Joseph Barrett and Raphael Hogarth acted for the successful Claimant, Consultant Connect Limited. The judgment is available here.
