The Technology and Construction Court (the TCC) - the generally preferred forum for procurement challenges in England and Wales - has adopted a Guidance Note (the Note) on the conduct of procurement challenges. The Note was launched recently at a Procurement Lawyers’ Association event hosted by Mr. Justice Coulson at the TCC in London. Mr. Justice Coulson confirmed that parties will be expected to have regard to the Note when litigating procurement disputes before the TCC.
The Note acknowledges that procurement cases tend to raise very specific issues. The short standstill and limitation periods mean claimants often find themselves forced to issue proceedings without having sufficient evidence or documentation to make out their claim. Recognising that this can mean proceedings ‘are necessarily issued hastily’ the Note provides guidance on the management of these claims.
In this briefing we highlight the following key points, which will be relevant to practitioners and their clients:
- pre-action process and ADR;
- the institution of proceedings;
- specific and early disclosure;
- confidentiality and confidentiality rings; and
- the position of interested parties.
Pre-action process and ADR
The Note acknowledges that due to the short limitation periods inherent in most procurement claims a full pre-action process is often simply not possible. It does though recommend pre-action should include:
- the potential claimant sending a letter before claim to the contracting authority identifying: (a) the procurement process being challenged; (b) the grounds then known for the claim (both factual and legal); (c) any information sought from the authority; (d) the remedy required; (e) any request for an extension of the standstill period and/or period of time within which the authority will not enter into the contract; and (f) proposing an appropriate, short time-limit for a response;
- the authority should acknowledge receipt of the letter promptly, notify the claimant of its solicitors details and (if requested) indicate whether the standstill period will be extended and if so, for how long; and the authority should then provide any information which the claimant may be entitled to as soon as possible and send a substantive response within the timescale proposed by the claimant, or as soon as practical thereafter;
- having exchanged correspondence and information, the parties should continue to make appropriate and proportionate efforts to resolve the dispute without the need to commence proceedings this should be done as soon as practically possible.
The Note goes on to stress the importance of the parties acting co-operatively and reasonably. A point not explicitly recognised in the Note is that in practice, where challenges are made to contract award decisions (as is typically the case in procurement challenges), the scope for detailed pre-action correspondence will generally be limited by the 30-day rule. While the Note encourages the parties to consider ADR it is likely in practice that this will have to take place once proceedings have been served on the authority and been stayed by the Court.
Institution of proceedings
The Note confirms that the Claim Form must be served on the defendant within 7 days of the date of issue and Particulars of Claim served no later than the latest time for the service of the Claim Form (so in practice within a week of issuing proceedings). A point recognised in the Note is that in practice it is very difficult for the claimant to meet these deadlines with a fully particularised claim.
The Note makes the further point that where the Particulars of Claim (or other pleadings) contain confidential information a non-confidential version of the pleading in redacted form should be submitted to the Court together with an unredacted version marked confidential and sealed in an envelope also marked confidential. An order should be sought by letter, copied to the other party and any relevant third parties, that access to the Court file be restricted. This reflects the position more generally on confidentiality.
Specific and early disclosure
On this key issue the Note states that ‘contracting authorities are encouraged to provide their key decision making materials at a very early stage of proceedings or during any pre-action correspondence' (at para. 25). It adds that this may include the documentation authorities are required to keep to justify decisions taken in all stages of a procurement procedure (referencing Regulation 84 of the PCR 2015).
Questions of disclosure are to be considered at the first Case Management Conference (CMC). Applications that are likely to be contested must be brought promptly, with the possibility to make use of the general provisions on disclosure and the TCC protocol for e-disclosure. On disclosure generally, and the extent of the duties on authorities, the Note echoes the judgments of Mr. Justice Coulson in the 2013 Roche Diagnostics v Mid Yorkshire Hospitals NHS Trust case (please see here for a full report of the case and more recently in the Alstom v London Underground (please see here for a full report of the case and Bombardier v Merseytravel (please see here for a full report of the case cases earlier this year.
In practice, this may mean authorities will be expected to have provided information that is relevant to any alleged breach (with redactions to cover privileged and/or confidential information) within fairly short order of any pre-action letter. Limitation periods may mean proceedings need to be issued before this can be achieved during any pre-action correspondence. However, the Note strongly suggests that the Court will be minded to allow specific and early disclosure ahead of any automatic suspension lifting hearing provided there is some prima facie concern with the process and the documents requested can reasonably been viewed as relevant. Mr. Justice Coulson's recent judgment in Alstom v London Underground (please see above for the link to a full report of the case) provides a practical example of this.
Confidentiality and confidentiality rings
On confidentiality generally, the Note makes the clear point that the need to protect confidential information needs to be balanced by the basic principle of open justice. The Note explains that the Court will seek ‘to manage proceedings so that confidentiality is protected where genuinely necessary but ensuring that the issue of confidentiality does not give rise to unnecessary cost or complexity’ (at para. 27). It is worth noting that paras. 27-31 of the Note were quoted by Mr. Justice Coulson when the Note was in a draft form in his judgment in the Bombardier v Merseytravel (please see above for the link to a full report of the case).
Confidentiality rings are increasingly common in procurement cases. The Note states that ‘agreements or proposals for confidentiality rings, their scope and limitations should be put before the Court at the first CMC or application for specific disclosure, whichever is the earlier, with explanations as to why they are justified’ (at para. 35).
In addition to external legal advisors (solicitors and counsel) the Note sets out a series of relevant factors likely to be considered should the claimant (or any other party) wish its own employees to be included in the ring: ‘the party's right to pursue its claim, the principle of open justice, the confidential nature of the document and the need to avoid distortions of competition and/or the creation of unfair advantages in the market (including any retender)' (at para. 39). These considerations will be applied with specific reference to the particular person and his/her role and responsibilities and the Court may consider a “two-tier” ring in which first tier external advisers may apply for an employee representative in the second tier to have access to a particular document.
The obvious interested party in a procurement challenge is the preferred bidder, who is expecting to be awarded the contract. The Note sets out the Court's position that whilst an interested party may apply to become a full party to proceedings, ‘its interests can usually be considered and addressed by the Court without that being necessary’ (at para. 53).
The claimant and the defendant (authority) should however take steps to ensure an interested party is on notice of matters which affect its interests. For this to happen, the Note recognises that it may be necessary to provide it with copies of any pleadings, redacted if necessary, any relevant application (e.g. for disclosure), supporting evidence and/or relevant documentation (at para. 55). If it wishes to be represented, the interested party should apply to the Court as soon as practicable, indicating its interest and proposed involvement (at para 56).