BY Development Ltd & Others v Covent Garden Market Authority [2012] EWHC 2546 (TCC)

As part of a challenge to the procurement process for a development contract for New Covent Garden Market, BY sought leave to rely on expert evidence in relation to both planning and finance matters. BY said that the evaluation of the tenders contained a number of manifest errors and that the decision was unfair and/or arose as a result of the unequal treatment of their bid. The question for Mr Justice Coulson was whether the expert evidence was either admissible or relevant.

Under the 2006 Regulations as amended, the principal way in which an unsuccessful bidder can challenge the proposed award of a contract to another bidder is to show that the public body’s evaluation of the rival bids either involved a manifest error, or was in some way unfair, or arose out of unequal treatment. The Judge said that this means that the court’s role is a limited one. The court will not be tasked with undertaking a comprehensive review of the tender evaluation process nor is it to substitute its own view as to the merits or otherwise of the rival bids for that already reached by the public body.

The Judge considered that the correct approach to the test of “manifest error” in public procurement cases is that the court must carry out its review with an appropriate degree of scrutiny to ensure that the basic principles for public procurement have been complied with, that the facts relied upon by the contracting authority are correct and that there is no manifest error of assessment or misuse of power.

If the contracting authority has not complied with its obligations as to equality, transparency or objectivity, then there is no scope for it to have a “margin of appreciation” as to the extent to which it did, or did not, comply with its obligations. The court will not carry out a re-marking exercise, in order to substitute its own view for that of the local authority. The task for the court is to ascertain if there is a manifest error, something which is not established merely because a different mark might have been awarded. That said, there have been procurement cases where expert evidence has been allowed. See for example, the Henry Brothers case we reported in Issues 96 and 101. Mr Justice Coulson considered that:

where the issues are concerned with manifest error or unfairness, expert evidence will not generally be admissible or relevant in judicial review or procurement cases. That is in part because the court is carrying out a limited review of the decision reached by the relevant public body and is not substituting its own view for that previously reached; in part because the public body is likely either to be made up of experts or will have taken expert advice itself in reaching the decision; and in part because such evidence may usurp the court’s function.”

This does not mean that expert evidence can never be admissible in public procurement cases concerned with manifest error. For example, sometimes technical explanatory evidence is required. Is the claim one where the technical background is so complex that explanatory expert evidence is required, and/or the claim an unusual case where expert evidence on some or all aspects of the tender evaluation process is required in order to allow the court to reach a proper view on the issues of manifest error or unfairness? In the case here, all the issues went to elements of the evaluation itself. In these circumstances, the need for such evidence to explain background technical matters was not made out.

The Judge recognised that in these cases, claimants who are almost invariably the party whose bid has been unsuccessful, can often be at something of a disadvantage in mounting a challenge to the decision. That claimant has had no involvement in the detailed evaluation, so does not know precisely why its bid was unsuccessful. In the first instance, it is entirely dependent on the information which it is given by the defendant. Even once the proceedings have commenced, and further information has been provided (usually with a greater or lesser degree of reluctance) the claimant often remains unclear as to precisely what happened during the evaluation exercise. However, whilst against that background, the Judge could see that the possibility of being able to rely on a detailed expert’s report dealing with all aspects of the evaluation, and out of which a case as to manifest error or unfairness might emerge would be at least superficially attractive to a claimant, he reconfirmed that:

I consider that such an approach is wrong. Given the limited nature of the court’s review function, such expert evidence will not generally be admissible unless there are particular reasons why, on the facts of the case in question, the costs, time and effort required to present such opinion evidence could be justified.”

Here the Judge was concerned that the instruction of the expert would lead to a complete re-run of the evaluation process, with the experts commenting on each element of the tenders and their evaluation, and seeking to substitute their views for those held, and the decisions taken at the time. To do this would be to ignore the limited review task for the court at trial, and erroneously assume that a complete replay of the whole evaluation process will be allowed. Further, there was a danger that the experts were also being asked to usurp the function of the court. The experts were being asked not only whether it was their view that, for example, the claimant’s bid did not represent an unreasonable planning risk but also whether, in reaching the contrary conclusion, they were of the opinion that the authority’s evaluation was manifestly wrong.