The King (on the application of the Good Law Project Limited) v The Secretary of State for Health and Social Care v Abingdon Health Plc [2022] EWHC 2468 (TCC) – Part Two: Procurement principles

In the second in a two-part series on a recent procurement challenge brought by the Good Law Project, Juli Lau looks at the procurement principles considered by the court.

Earlier this month, the High Court handed down its judgment on the latest in the line of ‘Good Law Project’ (‘GLP’) procurement challenges. (The King (on the application of the Good Law Project Limited) v The Secretary of State for Health and Social Care v Abingdon Health Plc [2022] EWHC 2468 (TCC))

This challenge related to the decision by the Department of Health and Social Care (‘DHSC’) during the Covid-19 pandemic to award contracts for the development of antibody lateral flow tests to Abingdon Health (‘Abingdon’).

In the first of our two-part series on this 100-page judgment, Joe Walker, Senior Associate in our Litigation team, explored how the judge arrived at the conclusion that the GLP did not have standing to bring the judicial review, and its implications for future procurement cases brought for judicial review.

Underpinning the decision on standing was the judge’s conclusion that the claimant had failed on all the substantive grounds of public procurement principles that it had raised. In this second part of our series, I highlight key snippets on procurement principles.

Procurement principles under the judicial review spotlight

The factual context of the pandemic was a crucial feature in the judge’s findings that the DHSC had not breached any of the procurement principles on which the GLP had mounted a challenge.

The first reminder is therefore that when the actions and omissions of contracting authorities are being judicially reviewed, the factual matrix within which they have taken those decisions is key.

Rationality

Where a procurement challenge is judicially reviewed, the rationality of the contracting authority’s decisions and processes is scrutinised, including what information was rational for the contracting authority to require in order to satisfy its public law duties. In this case, the judge considered that this scrutiny had to be conducted “by reference to the constraints imposed by the urgent need to respond as swiftly as possible to the pandemic”, and on the facts, the judge found that there was no ground giving rise to irrationality.

A reminder nevertheless to contracting authorities to consider an overarching public law principle such as rationality, that may not be obvious from purely considering the PCR.

Conflict of Interest

In deciding that there was no conflict of interest arising from certain individuals’ involvement in the contract award, the judge looked at both the legislation (PCR Reg 24) and the contracting authority’s own policies on conflicts of interest.

A practical reminder to contracting authorities, therefore, to ensure that they comply not only with the legislation (which is being enhanced so far as conflicts of interest is concerned, by the Procurement Bill 2022) but also their own conflict of interest policies.

Unlawful Nationality Preference

The DHSC accepts that in entering into the relevant contracts, it took into account the fact that Abingdon was a British company. (This was disclosed in internal messages – see our article on the court’s decision ordering the disclosure of personal email and WhatsApp messaging accounts).

The judge was clear that any discrimination on the grounds of nationality would constitute a breach of Reg 18 PCR, if it applied here. However, the judge considered that if there had been a breach here, it was justified by the context.

The context here was firstly the global supply chain situation at the height of the pandemic. Secondly, it was the distinction that the judge drew between the DHSC’s stated intention to scale up diagnostic and manufacturing capacity in the UK, as opposed to holding a position that only British companies could be considered (which the judge considered was not DHSC’s intention).

The judge went on to say that: “…in these extreme circumstances, I cannot see why a policy which favours a company with a base in the UK (whether incorporated here or not) which had the facility to develop and manufacture some or all of the necessary tests was not plainly justified on the grounds of public health”.

It will be interesting to see what other circumstances might provide sufficient justification for a preference towards contracting with UK-based suppliers.

Equal Treatment and Transparency

Although the GLP’s claim on equal treatment grounds also failed, the judge was of the view that the legal principles of equal treatment, transparency and proportionality as contained in PCR Reg 18 are not automatically disapplied simply because direct award (PCR Reg 32(2)(c)) grounds existed.

This is another important reminder to contracting authorities that a justification to use a direct award procedure or other grounds which permit deviation from the full raft of procurement rules, does not negate the compliance with the overarching procurement principles.

State aid

It should be noted that the GLP had also claimed that state aid had been granted as a result of the contracts awarded to Abingdon, but this ground, too, was held by the judge to have entirely failed.

Conclusion

Our final thoughts on the procurement aspects of the judgment are that  it is important to bear in mind contracting authorities’ wider public duties, and the overarching procurement principles that underlie the legislative requirements; and to give consideration to how these might be scrutinised in judicial review. The recent string of GLP cases shed some light on how the courts are likely to approach these.

Juli Lau is a Legal Director at Sharpe Pritchard.

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