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Social Welfare Update: Health Secretary acted unlawfully by not publishing details of pandemic contracts within stipulated period breaching his own Transparency Policy

Friday 26 February 2021

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The issue in this claim was not an individual challenge to individual procurement decisions related to decisions to award contracts for goods and services following the onset of the COVID-19 pandemic, but rather a failure on the part of the Secretary of State to comply with the transparency requirements, as to notification of the award of such contracts.

The target of this claim for judicial review was the failure of the Secretary of State to comply with:
(a) regulation 50 of the Public Contracts Regulations 2015 (SI 2015/102) “the PCR 2015” which required the Secretary of State to publish a contract award notice (“CAN”) no later than 30 days after the award of contract with a value over the applicable limit; and
(b) the policy and principles set out in the Crown Commercial Service documents summarised as “the Transparency Policy” and “Transparency Principles” which require publication of the provisions of any contracts with a value over £10, 000.

The Factual Background

The Claimants claimed that it was “apparent” the Secretary of State either personally or through his civil servants had made and approved a decision to deprioritise the compliance with regulation 50 and with the Transparency Policy and Principles, a “de-prioritisation policy”. The Claimants claimed and sought to amend their grounds that the Secretary of State had also systematically failed to comply with regulation 108 of the PCR 2015 which is an obligation to publish a shorter form of the CAN on the Government’s “Contract Finder”.  This publication must be uploaded within 90 calendar days of the award date. The Claimants were stating the Secretary of State was systematically failing to publish many contracts within the specified time limit.

The Secretary of State resisted the Claimants’ application to amend their grounds in respect of the section 108 argument. On the substantive claim the Secretary of State submitted:
(a) The Claimants lack the standing to bring the claim;
(b) The Secretary of State had now complied with the obligation to publish the CAN in 100% of cases, with regulation 108 in 97% of cases and the policy of publishing the provisions of contracts in 85% of cases therefore the litigation served no useful purpose;
(c) There was no “de-prioritisation policy”;
(d) Any remedy would be academic and of no practical value given the government’s compliance;
(e) There would be no substantial difference and relief should they be refused under the s31(2A) of the Senior Courts Act 1981.

The Decision and Remedy

The judgment is lengthy and complex with the court being required to set out the chronology and evidence at paragraphs [28 – 76] of the judgment. The starting point appears to relate to the award of three contracts which are each subject to a separate legal challenge and include contracts which fall into the “VIP lane” where companies appear to have been given preferential treatment for contracts, the three contracts mentioned at paragraph [31] are:
(f) To Ayanda Capital Limited for face masks worth £252 million (VIP lane);
(g) To Candeboye Agencies Limited for the supply of gowns worth £108 million. The company had only previously supplied confectionary products;
(h) To Crisp Websites Limited (Pestfix) for supply of personal protective equipment (PPE) worth £32 million but with other contracts worth a total of £313. Pestfix had never previously supplied PPE and benefitted from the VIP lane.

On the issues the judge determined the following:
(i) Standing [77 – 108]: The judge provides a useful and precise analysis as to the standing in judicial review and as applied in this claim. The judge identified that standing is acutely sensitive to the context of the claim as the question of whether to confer standing to vindicate the rule of law depends, amongst other things, on the availability in principle and in practice of alternative challengers and alternative remedies [97]. Drawing on principles from the Court of Appeal in the case of Chandler [99] the judge found that, in respect of the challenge to the transparency obligations under the PCR 215 and its policies, that the position of the first claimant was analogous to the claim in R v Secretary of State for Foreign and Commonwealth Affairs ex p. World Development Movement [1995] 1 WLR 386 as it has a sincere interest, and some expertise, in scrutinising government conduct in this area [104] and held the Claimant had standing to bring the claim [105]. Whereas the second to fourth claimants did not on the basis there was a better placed challenger on the issues of costs (see Jones [2020] 1 WLR 519). In particular, the judge was astute to cases where politicians are added as parties, and the reasons why they are added, but in a case with a Claimant already with standing, it may lead the public to consider the claim would be to advance a political cause.

(j) Permission to amend [109 – 119]. The judge refused the Claimants permission to amend the claim for the three reasons identified at paragraphs [116 – 118] of the judgment.

(k) De-prioritisation [120 – 124]. The judge identified that this claim was not made out and identified the principle that the court in judicial review proceeding accepts the written evidence of the Defendant unless exceptionally there is a conflict with written evidence before the court, or exceptionally the application is made to cross-examine a statement maker. The judge accepted the Secretary of State’s evidence.

(l) Failure to comply with transparency policy and principles [125 – 136]. Here the judge reviewed the wording of the policy in respect of the publication of the contract within 20 days following an award or at the end of the standstill period, and that the construction of the policy was a matter for the court to determine using normal aids for construction. The court held the 20-day time limit is framed in precise terms by reference to the award date or at the end of the standstill period. The judge held this is part of the Government’s policy commitments to publish such contracts to support competition and open markets. The judge held the aims would be significantly undermined if the time limits were to be understood as imposing no legal constraint at all on the Government even in the absence of a good reason from departing from it [131]. The judge held the Secretary of State had a common law duty to comply with the Transparency Policy absent from good reasons to depart from it. Further, there was no evidence the Government took steps to dis-apply or extend the 20-day period for compliance because of difficulties caused by the COVID-19 pandemic. The judge held the Secretary of State had acted unlawfully by failing to comply with the Transparency Policy [133 – 135].

(m) In respect of the remedy [137 – 160] the court held that as the First Claimant succeeded on grounds 1 and 2 of the claim they were entitled to the declaratory relief sought, but not the mandatory relief sought at paragraph [73] in the judgment requiring compliance. In respect of the section 31(2A) Senior Court Act 1981 argument the court reasoned at paragraphs [156 – 159] that there is an exception whether the court considers it is appropriate to disregard the requirement “for reasons of exceptional public interest" s31(2B). The judge identified that it was easy to apply these provisions where a claimant is challenging a decision which affects them personally but it is more difficult to apply in cases such as this where the First Claimant is bringing a public interest challenge of repeated failures by a public body. Here the “conduct complained of” is the failure to publish the contracts within the stipulated timescales. The state requires the court to consider a hypothetical scenario in which this conduct had not occurred. That must mean one in which publication occurred on time. Here the judge considered that the outcome for the First Claimant would have been substantially different if there had been publication on time. The argument identified would be to scrutinise, question, raise issues with oversight bodies and Parliament and within the time scales provided by law. The judge held compliance with the transparency obligations was the issue in this case and application of s31(2A) would make it effectively impossible for a public interest challenger ever to obtain relief for a breach of transparency obligations. Although it was deemed unnecessary to consider the application of s31(2B) the judge held it did apply that the matters at paragraph [137- 140] would constitute “reasons of exceptional public interest” so as to disregard s31(2A).

Comment

This judgment has been the subject of much political and journalistic comment, most of it ill-informed and inaccurate.

The evidence to date identifies that at the outset of the COVID-19 pandemic there was poor preparedness for the pandemic and there were clear shortages and problems with supply of Personal Protective Equipment (PPE), specifically with the provision of inadequate or inappropriate PPE for both hospital staff and staff at care homes. The subsequent award of contracts and supply of PPE has remained controversial and to a large extent lacking in scrutiny given the large amount of tax payers money involved. It is not the case that the determination in the case is “minor” or “merely technical” but demonstrates a major failure on accountability and compliance with the law by the Secretary of State in the middle of the pandemic. The evidence before the court from the Secretary of State does not state that the pandemic itself was a reason for the non-compliance with policy. This case is likely to be part of a series examining the problems with the Government approach to the pandemic and securing PPE for hospital and social care, in advance of any public inquiry, and are likely to inform the ambit of such an inquiry. The judgment also highlights some important principles on the standing and application of section 31(2A) Senior Courts Act 1981 on judicial review claims examining compliance with policy within a wider public interest.

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