In the recent Court of Session case of Clinical Solutions International Ltd v NHS 24 and Capgemini UK plc, NHS 24 were successful in their application for an interim order under Regulation 47(10) of the Public Contracts (Scotland) Regulations 2006 (the Regulations) bringing to an end a prohibition from entering into a contract with its preferred bidder, Capgemini UK.
Background
NHS 24 had invited tenders for the provision of services for their telephone and online medical services. Clinical Solutions International Ltd (CSL) was the current incumbent provider for one of the Lots tendered, but was ultimately unsuccessful in its bid. They brought an action against NHS 24 alleging a breach of Regulation 4(3) which required NHS 24 to ensure equal treatment between bidders and to act fairly, transparently and without discrimination. CSL argued that NHS 24 had not been transparent around the contract start date and transition arrangements and had acted favourably towards the successful bidder in allowing an extended transition period. The bringing of the action triggered an automatic prohibition on NHS 24 entering into a contract.
NHS 24 then sought an interim order, under Regulation 47(10), to bring to an end the prohibition from entering into a contract. NHS 24's arguments included that CSL had failed to send a suitable "pre-action letter" in terms of Regulation 47(6).
Decision
Lord Hodge was satisfied that CSL's case was, at best, weak:
- there was a strong case that CSL had not complied with Regulation 47(6). The purpose of the pre-action letter was to give the contracting authority an opportunity to remedy the default and to indicate the seriousness of the complaint. The letter had been served at 5.13pm on 15 December and the summons served at 7.20pm that same evening;
- the procurement documentation did not stipulate that the new contractor must commence the provision of services on a particular date and it was for each bidder to state when it could commence the services;
- although tenderers were invited to seek clarification from NHS 24 of any ambiguity in the documentation, CSL did not do so.
The Court was satisfied that the balance of convenience and the public interest favoured granting the interim order and allowing NHS 24 to enter into a contract with Capgemini UK. The Court considered that if NHS 24's decision to award the contract was set aside, the procurement process would be considerably delayed, and this would not be appropriate for the improvement of this important public health service.
Comment
The decision provides another example (following the decision in the Elekta case) of the Scottish Courts judging that the balance of convenience, including public interest considerations, lay with allowing the contract to be entered into, leaving potential damages as an adequate remedy for the challenging bidder to pursue.
The decision also serves as a reminder that a letter before action must be served on a contracting authority sufficiently in advance of raising proceedings and not merely "within a short period of time on the same day".
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
