Braceurself v NHS England: "sufficiently serious breach" requirement for procurement claim damages upheld

We’ve been following the progression of Braceurself v NHS England closely – you may have seen Jenny Beresford-Jones’ previous articles here and here.

Case background

As a brief summary of the facts, this case centres around a procurement process undertaken by NHS England (NHSE) for an orthodontics contract, in which there were only two bidders. The successful bidder in the process won by an extremely narrow margin. Braceurself commenced proceedings against NHSE, taking issue with the outcome of the procurement and, among other things, the evaluation of its bid response.

The contract specification included requirements for disability access. It was found at first instance that the evaluators had misunderstood the distinction between a “stair climber” and “stair lift” and as such, had made an error in the scoring of Braceurself’s bid. The court made it clear that the evaluators could easily have checked this information and avoided the error.

It’s well established that the courts will not interfere with evaluation decisions unless there has been a breach of the core procurement principles, or the authority has made a “manifest error”. In this case, the court agreed that the evaluators had made such an error and determined that Braceurself would have won the contract had this error not been made.

However, at a subsequent remedies hearing, the court decided that the mistake made by the evaluators was not “sufficiently serious” enough to warrant the award of damages.

Grounds of appeal

Braceurself appealed to the Court of Appeal on the following grounds:

1. If a breach resulted in the “wrong” bidder being awarded the contract, this would automatically be deemed a “sufficiently serious” breach, resulting in damages.
2. The “excusability” or “inadvertency” of the errors made are irrelevant.
3. That they were left without an effective remedy.

The Court of Appeal dismissed all three of these grounds of appeal, confirming that the “sufficiently serious” test was concerned less with the consequences for the damaged party than it was the nature and quality of the breach itself. Therefore, the mere fact that a bidder suffered adversely due to the breach has “little weight” in determining whether the sufficiently serious test has been met. This shift in focus away from the consequences of the breach to the damaged party will mean that going forward, the concept of “excusability” of the authority will be highly relevant in the assessment of the merits of any procurement claim.

What does this mean for the future?

For authorities, the errors identified by the court serve as a warning for evaluators in ensuring careful consideration is taken over bids – the misunderstanding over the type of accessibility measure in place was a minor point upon which the whole outcome of the procurement pivoted, and which arguably could have been avoided. It also highlights the importance of running an efficient and well organised process, as the court deemed this to be an important mitigating factor in its assessment of the “seriousness” of the mistake and the excusability/culpability of the authority. In manifest error cases like Braceurself, notes of evaluation and moderation processes are likely to be key in the assessment of the nature and quality of any breach and the excusability of it.

For tenderers, the finding in Braceurself steps away from the position that was understood in practice around recoverability of damages and reemphasises how difficult it is for tenderers in reaching a decision on whether to litigate bearing in mind the risk involved in doing so. When making a decision on whether to litigate, it will now be essential for tenderers to give due consideration to the conduct of the procurement as a whole and not just the breach of the Public Contracts Regulations 2015 (PCR) which it has identified. This will also need to involve assessment of whether any alleged breach of the PCR is likely to be considered unintentional and excusable (regardless of the damage the tenderer may have suffered as a result of any such breach).

A further consideration for both authorities and tenderers will be how Braceurself may be used going forward in the context of the automatic suspension. There is conceivably the risk of a situation where the automatic suspension is lifted at the interim stage, on the basis that damages are an adequate remedy, but where damages are not then awarded at trial. This may well affect the position taken by parties in respect of any application to lift the automatic suspension and could mean that the issue of whether alleged breaches are “sufficiently serious” to justify an award of damages, will be aired between the parties at early stage of the proceedings. It’s currently unknown whether Braceurself will attempt to appeal to the Supreme Court, but it is speculated that this is unlikely due to the authoritative tone of the Court of Appeal’s judgment.