30 Aug 2017

Procurement Guidance Note

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What you need to know

The Technology & Construction Court (TCC) has released a Guidance Note on dealing with public procurement cases.  

Procurement law raises its own unique set of issues when it becomes the subject of litigation and the Guidance Note aims to provide clarity to parties and to help them to meet this particular set of challenges, especially in relation to the short time periods for challenging contract awards, the need for early disclosure from contracting authorities and the protection of confidentiality and other third party interests.

The Guidance Note is now in force and will become Appendix H of the Technology & Construction Court Guide.  

Background

There has been a steady increase in the number of procurement disputes being heard in the TCC and it has now become the natural home for this type of case. Coulson J, presenting the Guidance Note at a launch event at the Rolls Building on 17 July, welcomed this development. The Guidance Note has been developed over a number of years and has been produced in collaboration with the Procurement Lawyers' Association.

Publication of the Guidance Note comes at a time when procedural issues in public procurement cases have been under the spotlight in the TCC, in particular with regard to confidentiality. In a decision given in March 2017, Coulson J considered whether statements of case in procurement claims should be marked private on the court file and found that to do so without good reason would be contrary to the principle of open justice (Bombardier Transportation Limited v Merseytravel [2017] EWHC 575 (TCC)).

Key provisions

  • Pre-Action: The Guidance Note sets out a pre-action process, which aims to function within the short mandatory standstill period of 10 days for public contract awards. This involves the exchange of letters and relevant information between the claimant and the contracting authority and agreement of any extension to the standstill period. ADR is encouraged and litigation should be viewed as a last resort.
  • Judicial review: Where claimants bring judicial review proceedings in the Administrative Court as well as issuing a claim under the Public Contract Regulations in the TCC, the Guidance Note provides that normally both claims should be heard together in the TCC and sets out the procedural framework for doing so.
  • Provision of documents: Parties are encouraged to exchange information proportionately at an early stage to avoid the need for specific disclosure applications, and to aid settlement discussions. The idea is that claimants ought to have sufficient information about the tender evaluation process so that an informed assessment can take place about the fairness and legality of the contract award decision. The Guidance Note states that this may include contracting authorities disclosing the report that they have prepared in accordance with Regulation 84 of the Public Contracts Regulations 2015.
  • Applications to lift automatic suspension: These must be brought expeditiously in the TCC and the Guidance Note sets out the grounds for seeking a stay of the order lifting a suspension of a contract award where an appeal is made.
  • Interested parties: There are often third parties in procurement claims who have a special interest in proceedings, for example a successful bidder who may be affected by any challenge to a contract award. The Guidance Note indicates that such parties will not normally need to be joined to the proceedings, but their interests should be considered and the parties should ensure they are given notice of a challenge. Interested parties may apply to the court to be represented and the court will normally expect to hear from parties who are affected by a claim or application.

Confidentiality vs open justice

Much of the Guidance Note is dedicated to the balance between the competing principles of confidentiality and open justice and the note sets out how this balance is to be achieved in the TCC. The following key points are worth highlighting:

  • Practicalities: To reduce the risk of accidental disclosure, papers and documents should be passed directly to the clerk of the allocated judge and should be marked confidential where relevant. Pages containing confidential information should be printed on coloured paper and different colours may be used to indicate tiers of confidentiality.
  • Pleadings: Where these contain confidential information, two copies must be filed, one with the confidential information redacted and one unredacted version contained in a sealed envelope marked confidential.
  • Restricted access to the court file: The court may order this in order to protect confidential information, but only where necessary and any member of the public may seek an order to vary the restriction. In the interests of serving open justice, redacted documents may be placed on the court file rather than imposing blanket restrictions.
  • Confidentiality rings: These should be established as early as possible to protect confidential information and the individuals within them must give appropriate undertakings to preserve confidentiality. The Guidance Note details some considerations for who should be included within the ring. Confidentiality rings may also be set up with two tiers, one for employees of a party and one for external representatives.
  • Redactions: These may be justified in order to protect privileged or confidential information. Where there is a confidentiality ring, redaction of confidential information may allow wider disclosure outside the ring. A schedule of redactions must be kept, stating the reason confidentiality is claimed over the redacted section.
  • Trial and judgment: The court will require the trial to be conducted on an open basis as far as possible, but in the interests of confidentiality, consideration will be given to what restrictions may need to be placed on attendance and reporting of the proceedings. Judgments will be handed down as open documents except in "the most exceptional circumstances"; and confidential information will generally be contained in a separate schedule.

Conclusion

The Guidance Note is a welcome clarification of the approach that should be adopted by parties in seeking to challenge or defend contract awards. It encourages the early disclosure of relevant information by contracting authorities and seeks to strike a sensible balance between the legitimate interest of the parties in keeping commercially sensitive information confidential and the public interest in open justice. It also provides a useful reminder that parties should attempt to resolve disputes out of court and treat litigation as a last resort.

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KEY CONTACT

Paul Thwaite

Paul Thwaite
Partner

T:  +44 20 7809 2341 M:  +44 7881 913 246 Email Paul | Vcard Office:  London

Ian Lister

Ian Lister
Associate

T:  +44 20 7809 2654 M:  Email Ian | Vcard Office:  London