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Late publication of contracts

David Mitchell examines a recent ruling that the late publication of coronavirus contracts by the Department of Health and Social Care was unlawful.

On 18 February Chamberlain J handed down judgment in R (Good Law Project & others) v Secretary of State for Health and Social Care [2021] EWHC 346 (Admin), a challenge concerning the government’s compliance with procurement law and its own transparency guidance in the awarding of goods and services contracts during the COVID-19 pandemic. By reg. 50 of the Public Contracts Regulations 2015 the Secretary of State for Health and Social Care was obliged to send for publication a contract award notice (“CAN”) not later than 30 days after the award of a contract. By its transparency policy and principles it was obliged to publish details of any contract.

The challenge was brought by the Good Law Project and three opposition MPs (Labour, Liberal Democrat and Green Party). It was the claimants’ case that the Secretary of State had not only acted unlawfully but that he had done so as part of a deliberate policy (the so-called “de-prioritisation policy”).

The Secretary of State’s defence contended that the claimants lacked standing to bring the claim and that the challenge was academic in that the government had now complied with its obligations under reg. 50, albeit that publication had been delayed. It was denied that there had ever been a de-prioritisation policy. Further, relief should be refused under s. 31(2A), Senior Courts Act 1981 because the outcome for the claimants would not have been substantially different had the conduct complained of not occurred.

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The claimants’ evidence, commissioned from a procurement consultancy, showed that by October 2020, when the claim was filed, the Secretary of State had spent some £15 billion on contracts for personal protective equipment of which only £2.68 billion had been made public. The research showed that the deadline set by reg. 50 was likely to have been breached in a substantial number of cases [30]. The claimants further provided evidence of an award to a company called Ayanda Capital Limited for the supply of face masks with a contract value of £252 million at the end of April 2020. The CAN was not published until 2 July 2020 and the contract itself was not published until 4 September 2020. It was the claimants’ case that more than £160m of the masks purchased were unusable in the NHS and that the contract was agreed with a tiny company created by an associate of the Minister for International Trade and which had been given preferential treatment in competing for the contract through a so-called “VIP lane” [31(a)].

Chamberlain J first considered the issue of standing. The judge summarised the relevant principles in the context of procurement from R (Chandler) v Secretary of State for Children, Schools and Families [2009] EWCA Civ 1011; [2010] PTSR 749, concluding that whilst the Good Law Project did have standing, the three opposition MPs did not [99]-[108].

In terms of the substantive challenge, whilst Secretary of State had failed to comply with reg. 50 and the transparency policy and principles, the suggestion that this evinced a deliberate “de-prioritisation policy” was given short shrift [120]-[124]. There was no reason to go behind the Secretary of State’s clear denial that any such policy existed. Nevertheless, the failure to comply with its transparency policy was unlawful on the basis that, “the Secretary of State had a common law duty to comply with the Transparency Policy absent good reason to depart from it.” [132] & [135]

On the question of relief, at the outset of his consideration the judge recorded his view that:

“The obligations imposed by reg. 50 and by the Transparency Policy and Principles serve a vital public function and that function was no less important during a pandemic. The Secretary of State spent vast quantities of public money on pandemic-related procurements during 2020. The public were entitled see who this money was going to, what it was being spent on and how the relevant contracts were awarded. This was important not only so that competitors of those awarded contracts could understand whether the obligations owed to them under the PCR 2015 had been breached, but also so that oversight bodies such as the [National Audit Office], as well as Parliament and the public, could scrutinise and ask questions about this expenditure. By answering such questions, the Government “builds public trust and public confidence in public services”: see §1 of the Transparency Principles. One unfortunate consequence of non-compliance with the transparency obligations (both for the public and for the Government) is that people can start to harbour suspicions of improper conduct, which may turn out to be unfounded.” [140]

Whilst refusing a mandatory order declaratory relief was ordered in circumstances where the Secretary of State’s breach of reg. 50 was not isolated, but happened in a significant number of cases. More importantly, whilst “The Claimants must bear some responsibility for consistently putting the case higher than was warranted… the lion’s share of the blame lies with the Secretary of State” for not admitting until its trial skeleton argument its unlawfulness in breaching reg. 50 [153]. The claimants were therefore vindicated in pursuing the challenge to trial.

The Secretary of State was not saved by s.31(2A). Whereas the provision might be applicable in the case of a challenge brought by an individual against a decision affecting him or her personally, in the present case it was clear that the outcome would have been “substantially different” had the contract information been timeously and lawfully published:

“the First Claimant would have been able to scrutinise CANs and contract provisions, ask questions about them and raise any issues with oversight bodies such as the NAO or via MPs in Parliament; and it would have been able to do so within the timescales provided by the law. In the context of a case where compliance with transparency obligations is the object of the litigation, this would in my judgment have been a “substantially different” outcome. Any other reading of s. 31(2A) would make it effectively impossible for a public interest challenger ever to obtain relief for breach of transparency obligations. There is no indication that s. 31(2A) was intended to have such a radical effect.” [158]

In summary, whilst the case is of interest given the court’s assessment of the Secretary of State’s failures to comply with procurement law and the government’s own transparency guidance, it is likely to be of wider significance given the finding that the Good Law Project has standing. The Good Law Project is currently pursuing a number of other pandemic-related procurement challenges against government departments.

The other notable feature of the case is Chamberlain J’s deprecation of the government’s stance in only admitting its breach of reg. 50 late in the day. As noted by the judge, the Secretary of State was provided with a clear “way out” of the challenge at the permission stage when Mostyn J had held that, “If the defendant were to give formal binding undertakings to the court in respect of his intended timely compliance with his legal obligations, then consideration would have to be given by the claimant as to whether it is a proportionate use of the court’s resources for the claim to continue.” [49] How the Secretary of State is likely to rue that opportunity missed.

David Mitchell is a barrister at 39 Essex Chambers.

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