Court Of Appeal Rules On Damages Award Following A Breach By The NHS Of Its Procurement Obligations – Braceurself Limited v NHS England
Author: Jared Ursell
Key Contact: Jared Ursell & Aisha Wardell
On 30 January 2024, the Court of Appeal handed down judgment in the case of Braceurself Limited v NHS England [2024] EWCA Civ 39, an appeal concerned with whether a manifest error by the NHS in the tender evaluation process for a procurement bid was “sufficiently serious” to warrant an award of damages to the appellant. This follows an earlier decision in July 2023 concerning the use of a Respondent’s Notice, reported on here by Jared Ursell. The Acuity Law team was led by Aisha Wardell and Jared Ursell.
Background
Braceurself Limited (“Braceurself”) is a provider of dental services based in Hampshire. In February 2019, a competitive tender process was opened to award a contract to provide orthodontic services in East Hampshire. Braceurself was the incumbent provider and one of the two bidders for the contract. Braceurself’s bid was ultimately unsuccessful due to what is says was a scoring error on the part of the NHS in respect of the accessibility of Braceurself’s premises.
Braceurself appealed the initial decision to the High Court, with two judgments given in respect of liability and quantum respectively. In terms of liability, the judge at first instance held that there had been a breach by the NHS of its obligations under the Public Contract Regulations 2015 and, but for the mistake, Braceurself would have been the successful bidder . However, in its second judgment on quantum (i.e. the “Francovich” judgment), the judge at first instance held that the manifest breach was not “sufficiently serious” to award damages. Braceurself obtained permission to appeal from the Court of Appeal.
Judgment
The Court of Appeal (LJ Coulson, LJ Dingemans, LJ Snowden) found that the error by the NHS was not “sufficiently serious” to grant an award of damages. Braceurself’s appeal centred on three main submissions, namely:
- Is the finding that, but for the breach, the contract would have been awarded “sufficiently serious” in its own right; or
- Is the excusability/ culpability of the NHS relevant for the purposes of considering whether the breach was “sufficiently serious”; or
- Does the principle of effectiveness require an award of damages?
The first two issues in this case were premised on a list of factors set out in the earlier leading House of Lords case of Reg v Secretary of State, Ex p. Factortame (“Factortame”).
For the first ground, the court found that the “nature and quality” of the breach was of “paramount importance” rather than just the effect of the breach itself, drastic as that may be in this instance (i.e. it denied the appellants the contract). The Court of Appeal therefore concluded that no individual factor alone taken from Factortame was determinative in considering if a breach was sufficiently serious.
For the second ground, Braceurself sought to argue that excusability and state of mind- two of the factors listed in Factortame– did not apply to this case: Factortame was only concerned with the excusability of errors of law and therefore an error of fact, such as the one in this case, could not be excused in principle. In terms of state of mind, it was argued that this should not be a relevant factor absent incidents of clear bad faith by the infringing authority.
Finally, in respect of the third ground, Braceurself argued that the decision reached by the High Court denied Braceurself an effective remedy. This was because, at an earlier hearing, it was held that damages were an adequate remedy for the alleged breach in question and that, therefore, the actual award of the contract could not be challenged, and the automatic stay was lifted.
The Court of Appeal rejected all of these grounds. The Court of Appeal were of the view that (i) a factual error leading to the wrong bidder receiving a contract was not automatically sufficiently serious in principle and would depend on an evaluation of the facts before the court; (ii) the degree of culpability of an infringer was of the ‘utmost importance’, and rejected the idea that the absence of bad faith rendered this issue irrelevant; and (iii) in terms of effectiveness, there was no breach of this principle; this concept is intended to ensure that a party who is entitled to a remedy can obtain it and does not ‘provide a guarantee of success’.
In addition, and more unusually, the court overturned the High Court’s finding of fact that the bid by Braceurself had been scored incorrectly. Coulson LJ found that, based on the evidence before him, it was more likely than not that the right score had been reached by the assessor.
A copy of the judgment can be found here.
Aisha Wardell and Jared Ursell of Acuity Law, and Philip Moser KC of Monckton Chambers and Amardeep Dhillon of Serjeants Inn Chambers were instructed on behalf of Braceurself.
