Scott & Co (Scotland) LLP v Aberdeenshire Council

Case Summary

In Scott & Co LLP v Aberdeenshire Council [2016] CSOH 64, the Court of Session in Edinburgh refused to lift an automatic prohibition preventing the Council from concluding a contract for sheriff officer services. The judgment is suggestive of a reluctance of the Scottish Courts to lift automatic suspensions in procurement challenges where there is a prima facie case of a breach of the Regulations and where the authority (and wider public interest) will not be prejudiced by delaying the conclusion of the contract until a full hearing.

The Facts

Aberdeenshire Council (the defender) ran a public procurement under The Public Contracts (Scotland) Regulations 2012 (“the Regulations”) for the provision of sheriff officer services. Up to October 2015, those services had been provided by Scott & Co (Scotland) LLP (the pursuer). The pursuer was advised on 5 January 2016 that it had been unsuccessful. Following correspondence with the defender, the pursuer served proceedings on the defender, claiming that it had breached the Regulations in several respects. The effect of serving proceedings was that the defender was prohibited from concluding the contract with the successful tenderer (Regulation 47(9)). The defender enrolled a motion for an interim order in terms of Regulation 47(9)(b) to bring the automatic prohibition to an end. 

The pursuer’s challenge and its submission in response to the defender’s motion was based on two grounds, as follows:

  1. The first ground of challenge was that the defender had breached Regulations 30(3) and 4(3). It was claimed that the defender had used undisclosed criteria and weightings in its evaluation of the tenderers (i.e. a transparency breach).
  2. The second ground of challenge was that there had been manifest errors in scoring the pursuer’s bid. The pursuer submitted that the defender had ignored material information provided by the pursuer in its tender submission and at a site visit (i.e. a manifest error in conducting the scoring).

The Decision

In determining whether to grant the interim order, Lord Doherty considered the factors referred to in Regulation 48(2), the strength of the pursuer’s prima facie case, the balance of convenience and whether damages would be an adequate remedy for the pursuer. 

It was stated by Lord Doherty that the court’s views can only be preliminary, based on the documents and upon the relatively brief submissions made at the hearing of the motion. 

When giving an overall assessment and looking at the balance of convenience and public interest, Lord Doherty’s opinion was that the pursuer’s first ground of challenge was not likely to succeed. By contrast, he held that the pursuer did have a prima facie case of breach of Regulation 4(3) in respect of the second “manifest error” ground of challenge. He said that it was not possible to say at this stage that one party’s prospects on that ground are stronger than the other’s. 

On balance of convenience he made the following points:

  • Lifting the prohibition would result in the removal of uncertainty concerning the validity of the award, with resultant benefits for the defender and successful tenderer.
  • It is in the public interest that there is not a prolonged period of uncertainty, and that the defender (and through it, the public) enjoys the cost advantages of the new contract sooner rather than later.
  • It is also in the public interest that an award is not made in breach of the Regulations. There is obvious prejudice to the pursuer if it is. The fall out of the pursuer’s operations in the north of Scotland may be significant.
  • The consequences for the defender and the winning tenderer of the prohibition continuing for a short period seemed to be much less severe.

On whether damages would be an adequate remedy, Lord Doherty was not persuaded that the assessment of damages would be especially difficult; however he accepted that setting aside the award would be a more satisfactory remedy for the pursuer. He also accepted that the defender could make interim arrangements which could reflect the same cost advantages as the winning bid; and that if those arrangements were for a short period the contract value would be very unlikely to exceed the minimum threshold for a regulated public supply contract. Lord Doherty stated that a full hearing could be held in 2 weeks’ time and this factor tipped the balance in favour of leaving the prohibition in force. Having an early hearing facilitates the effective and rapid review of the award decision. 

Lord Doherty considered that it was right and proportionate that the motion be refused in hoc statuand that the prohibition should remain in place.

Comment

At first blush this case appears to depart from a line of case law in Scotland where the courts favoured the lifting of the automatic prohibition. However, it appears that the key element was the fact that a very early hearing could be fixed. In fact, the judgment stated that had the date of a full hearing been distant, that would have tipped the balance of convenience towards lifting the prohibition. It was considered that in the circumstances, the negative consequences of an order lifting the prohibition were likely to outweigh the benefits of the order being lifted. 

In the future, where it is possible to fix an early hearing, it may be that this case will be used as a basis to argue that a prohibition should remain in place, especially if the facts of the case otherwise tip the balance in favour of the pursuer. 

A new set of Scottish procurement regulations took effect from 18 April 2016, completing the new “Scottish Model of Procurement”. CMS will be holding breakfast seminars on “Winning Public Sector Contracts in Scotland” on 9 June 2016 in our Glasgow office and 15 June 2016 in our Edinburgh office.

In this breakfast briefing, Ruth Crawford QC and our procurement experts Graeme Young, Lynsey Brown and Helen Fyfe will consider the effect the changes will have on bidding for and winning public sector work. We will also look at recent case law including the Scott & Co LLP v Aberdeenshire Council [2016] CSOH 64 case and examine the options available to bidders when the outcome of a procurement process is not as expected.