Automatic suspension of contracts: Six things the court suggests defendant authorities can learn from BMLL v Bristol City Council - DAC Beachcroft

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Automatic suspension of contracts: Six things the court suggests defendant authorities can learn from BMLL v Bristol City Council

Published 27 April 2015

Bristol Missing Link Limited v Bristol City Council [2015] EWHC 876 (TCC)

BMLL is the incumbent provider of a domestic violence and abuse support service in Bristol, commissioned by the Council. The Council set about re-procuring the service and declared that BMLL had lost. BMLL challenged, which resulted in the automatic suspension of contract and the Council applied to lift this.
 
Readers will recall that the American Cyanamid principles apply, so when considering whether to maintain or lift the stay the court will consider, firstly, whether there is a serious issue to be tried, and secondly, the balance of convenience, including  whether or not damages would be an adequate remedy.

BMLL successfully persuaded the judge to uphold the mandatory suspension with the key to that success being BMLL's genuine non-profit status, meaning that damages could not be an adequate remedy. That said, the Council's approach to the case did not help its cause and other authorities would be wise to take heed from the six key lessons from this case:

1.  Be consistent about disclosure

The Council refused to disclose information relating to the winning bid to BMLL. They then sought to rely on that same information in the hearing to argue that there was no serious issue to be tried, and that there would be prejudice to the Council and service users if the suspension was not lifted and the proposed contract delayed.

The judge described this approach as "unfortunate", "potentially unfair" and "what the authority should not do".

2.  Think carefully about whether to argue that there is no serious issue to be tried

The judge commented: "In the ordinary procurement case, where there may be points to be made on both sides, it will often be unproductive for the parties (and a waste of judicial resources) to spend a great deal of time arguing about the merits or otherwise of the underlying claim."

He also stated that in cases where there are clear issues arising out of individual scores, it will be difficult for the court to conclude that there is no serious issue to be tried.

3.  If you do argue that there is no serious issue, rebut credible claims in detail

The judge commented that "many important matters raised in their pleaded claim by BMLL had not been answered at all". He then concluded that it was "self-evident" that there was a serious issue to be tried, and that it was "rather surprising that the Council considered" that the opposite was arguable.

4.  Be careful what you say

The Council was haunted in the hearing by an admission made in its pre-action correspondence that "had [a challenged moderation process] not taken place...we would have been scoring according to incorrect criteria and would have left ourselves open to a legitimate challenge from an aggrieved bidder."

This was not addressed in the Council's evidence or pleadings, and again served to undermine its position that there was no serious issue to be tried.

5.  When considering the adequacy of damages, the court will be swayed by a genuinely non-profit claimant

The court accepted that BMLL had not included any amount for profit in its tender. There were therefore no (or minimal) damages to recover. The judge's view was that "a non-profit making organisation, which has bid for a contract making no allowance for profit at all, and a minimal amount for overheads, is entitled to say that, in such circumstances, damages would not be an adequate remedy."

The court distinguished BMLL's position from that of the recent Solent NHS Trust in its challenge to Hampshire County Council.  Although NHS Trusts are not themselves profit making organisations, in that case Solent had in its tender allowed a specific profit margin. For that and other reasons the judge there held that damages would in fact have been an adequate remedy for Solent.

6.  Do not ignore factual arguments about reputational damage

BMLL argued successfully that it would suffer "catastrophic harm" from losing the contract. The Council had not countered this but submitted that claims for reputational harm should be given little weight.

The judge disagreed and accepted that the reputational harm that BMLL would suffer was a further reason why damages would not be an adequate remedy, as it would arise from BMLL's inability to do their core work in their only market, rather than their failure to win the contract per se.

Authors

Alistair Robertson

Alistair Robertson

London - Fetter Lane

+44 (0)20 7894 6020

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