Procurement claims: practical insights on summary judgment and the automatic statutory suspension

Lynsey Oakdene sets out the lessons to be learned for contracting authorities and bidders from a recent procurement case concerning the award of a contract to provide an automatic number plate recognition system.

Any organisation involved in the bidding for or awarding of contracts via public procurement tender will be aware that the process can be highly complex and often involves the investment of significant time and effort from staff and senior management. In addition, tender outcomes can have a substantial commercial impact for many businesses.  The option for a bidder to obtain swift legal redress when things go wrong; and the ability for an authority to proceed with procurement without delay wherever possible, are equally essential.

Neology UK Ltd v Council of the City of Newcastle Upon Tyne & Ors [2020] EWHC 2958 (TCC) arose following Neology’s unsuccessful bid to provide a system for automatic number plate recognition (ANPR) to Newcastle. ANPR was required to support the enforcement of a forthcoming mandatory clean air zone in Tyneside. Neology issued proceedings challenging Newcastle’s decision, and applied for summary judgment [1.  Issue of the claim triggered an automatic stay [2] of Newcastle’s ability to proceed with the procurement contract.

The case (in which summary judgment was not allowed and in which the statutory stay was immediately lifted) will be of interest from both a bidder’s and an awarding authority’s perspective because it is a rare reasoned decision as to the application of summary judgment principles to Public Contract Regulations 2015 claims, and because it offers practical insights as to the operation of the statutory suspension on procurement which is automatically triggered by the issue of a legal claim.

What are the key takeaways?

The High Court confirmed that, to obtain summary judgment in this context:

• the claimant unsuccessful bidder has to establish that the defendant authority has no real prospect of resisting the claim to have the award decision set aside; and
• a claimant does not have to establish that it would necessarily have won the contract.

The court also made the practical observation that it would be unlikely for summary judgment to be granted if the issues could not be decided without disclosure [3] and/or without the court being fully appraised of the factual background and any technical concepts.

A case (such as this) which turns on, say, a factual, scoring or reasoning dispute is likely to be unsuitable for summary judgment.

It may be easier to obtain summary judgment in a case which is concerned, instead, with breaches of the principles of equal treatment, transparency or proportionality – that is, where the claimant can establish, without trial, obvious unfairness or manifest disparity of treatment as between tenderers.

Apart from in the clearest and strongest of principle-based cases, therefore, unsuccessful bidders should be wary of applying for summary judgment, at least at too early a stage.

The High Court also offered practical insights as to the operation of the automatic statutory stay:

• the ‘balance of convenience’ will be considered – that is, the court will consider the relative detriment to be suffered by each party in leaving or lifting the stay;
• where damages are an adequate remedy for an unsuccessful bidder, the stay should be lifted;
• for damages not to be an adequate remedy the contract in question would perhaps have to be of particularly high value, prestige or international renown; or it would have to be perhaps the only contract of that type available to the bidder;
• even where damages are not an adequate remedy, public interest in the procurement going ahead may weigh decisively in favour of the stay being lifted in any event.

Parties should be aware, therefore, that, in a significant proportion of cases, the Regulation 95 will not necessarily mean lengthy delays to the completion of procurement contracts.

Lynsey Oakdene is a Director in the Commercial Dispute Resolution team at Walker Morris.

[1] Summary judgment is the court’s early and swift resolution of a case, without a full trial

[2] Under Regulation 95, Public Contract Regulations 2015

[3] Disclosure is the litigation process by which parties provide documents to learn more about each other’s case and ensure that they have access to all relevant, and the same, information when preparing for trial