Skip to Main Content

Find Case LawBeta

Judgments and decisions from 2001 onwards

Energysolutions EU Ltd v Nuclear Decommissioning Authority

[2015] EWCA Civ 1262

Case Nos: A1/2015/0468 & 0586

Neutral Citation Number: [2015] EWCA Civ 1262
IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN’S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

MR JUSTICE EDWARDS-STUART

Case Numbers HT-2014-000053 and HT-2014-000094

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 15/12/2015

Before:

THE MASTER OF THE ROLLS

LORD JUSTICE TOMLINSON

and

LORD JUSTICE VOS

Between:

ENERGYSOLUTIONS EU LIMITED

Appellant

- and -

NUCLEAR DECOMMISSIONING AUTHORITY

Respondent

Mr John Howell QC and Mr Ewan West (instructed by Freshfields Bruckhaus Deringer LLP) for EnergySolutions EU Limited

Mr Nigel Giffin QC and Mr Joseph Barrett (instructed by Burgess Salmon LLP) for the Nuclear Decommissioning Authority

Hearing dates: 26th and 27th October 2015

Judgment

Lord Justice Vos:

Introduction

1.

The Claimant, EnergySolutions EU Limited (“Energy Solutions”), was a member of the consortium that was one of the last 4 tenderers for a major nuclear decommissioning contract (the “Contract”) procured by the Defendant, the Nuclear Decommissioning Authority (the “NDA”). The NDA is a non-departmental public body established under the Energy Act 2004 with responsibility for 17 nuclear sites in the UK. The bidding consortium in question was called “Reactor Site Solutions” (the “RSS consortium”) and comprised Energy Solutions and Bechtel Management Company Limited (“Bechtel”). On 31st March 2014, the NDA informed the RSS consortium that its bid had been unsuccessful, and that the Contract was to be awarded to another consortium called “Cavendish Fluor Partnership” (“CFP”). The NDA also informed the RSS consortium that the standstill period provided for under regulation 32A of the Public Contracts Regulations 2006 (SI 2006 No. 5) (the “Regulations”) would end at midnight on 14th April 2014.

2.

On 6th April 2014, the RSS consortium wrote to the NDA expressing concerns about the adequacy of the procurement process, and seeking information. On 11th April 2014, the NDA responded to the RSS consortium declining to extend the standstill period and referring to the very significant cost that would be suffered by the NDA if there were any delay to the programme. It was open to the RSS consortium and to Energy Solutions as one of the members of the RSS consortium to issue proceedings against the NDA under regulation 47C of the Regulations, and to notify the NDA that they had done so, before the end of the standstill period and before the Contract was entered into between the NDA and CFP. Had the RSS consortium done these things, the NDA would have been required to refrain from entering into the Contract under regulation 47G(1) of the Regulations. In fact, however, the RSS consortium decided not to do them and instead wrote to the NDA reserving all its rights on the 14th April 2014.

3.

The Contract between the NDA and CFP was entered into on 15th April 2014. On 28th April 2014, Energy Solutions issued its original claim form claiming damages from the NDA of approximately £100 million in respect of the loss of profits that it would have earned had the Contract been awarded to the RSS consortium. The damages were sought for breach of the obligations in regulations 18(27) and 30(1)(a) to award the Contract to the most economically advantageous tenderer, and were, therefore, claimed under the provisions of regulations 47A-C and 47J, to the details of which I shall return. The parties agreed that the effect of regulation 47G was not, in these circumstances, to impose any automatic suspension on the Contract.

4.

Against this relatively straightforward background, two preliminary issues were tried by Edwards-Stuart J. Energy Solutions appeals the judge’s conclusion that it was inappropriate without a trial to decide whether or not it should be deprived of its damages because it had refrained from issuing legal proceedings before the Contract had been entered into and thereby deprived itself of the opportunity of maintaining the suspension of the making of the Contract pending the determination of the dispute. Energy Solutions argues that the judge ought to have decided as a matter of domestic law that it could not be deprived of damages simply because it failed to avail itself of the opportunity under the Regulations to issue the proceedings in time so as to maintain the suspension. The NDA argues that the judge was right to hold that it was not possible to decide this question as a preliminary issue, but that it needed to be decided at trial after evidence had been provided.

5.

The second issue that the judge decided concerned the principles applicable to the award of damages to an unsuccessful tenderer under Regulation 47J. The NDA contends that such an award is subject to the 3 conditions applicable to awards of damages in EU law explained by the Court of Justice of the European Union (“CJEU”) in Francovich v. Italy (C-6/90) [1991] ECR I-5357, as formulated by the CJEU in Brasserie du Pêcheur S.A. v. Federal Republic of Germany, Regina v Secretary of State for Transport ex parte Factortame Limited (Joined cases C-46/93and C-48/93) [1996] Q.B. 404 (the “Brasserie du Pêcheur” case) (the “Francovich conditions”), namely that (i) the rule of law infringed must be intended to confer rights on individuals, (ii) the breach must be sufficiently serious, and (iii) there must be a direct causal link between the breach of the obligation and the damage sustained by the injured party . Conversely, Energy Solutions contends that the judge was right to hold that ordinary English law principles were applicable to such awards of damages, and that once a breach of the Regulations was established the award of damages was not discretionary.

The precise terms of the preliminary issues that the judge determined

6.

As so often happens, the precise formulation of the preliminary issues was problematic. In this case, the difficulties that arose were addressed in paragraphs 19-25 of the judgment of Edwards-Stuart J. The judge was required to address what was really something of a moving target.

7.

The preliminary issues themselves together with the answers that the judge gave were as follows:-

“a. whether the fact that the Claimant did not issue a claim form and notify the Defendant that it had done so before the Defendant’s entry into the Contract means that, given regulation 47G of the Public Contracts Regulations 2006, any loss that the Claimant has suffered in consequence of any breach of its obligations by the Defendant is not attributable to any such breach [Answer: the issue is not appropriate to be determined as a preliminary issue].

b. if the Claimant has suffered any loss in consequence of any breach by the Defendant of its obligations:

i. whether the Court has any discretion not to make any award of damages in respect of that loss or a discretion to make only a partial award of damages in respect of any such loss [Answer: No]; and

ii. if so:

(1) on what basis any such discretion is to be exercised; and

(2) whether the fact that the Claimant did not issue a claim form before the Defendant's entry into the Contract and notify the Defendant that it had done so means that, given regulation 47G of the Public Contracts Regulations 2006, it would be inappropriate for the court to make any award of damages or one in relation to the full loss suffered by the Claimant [Answer: Does not arise].”

8.

We were told at the end of the argument that the liability trial of these proceedings is due to commence on 16th November 2015 with an estimate of 5 weeks. The parties have apparently agreed that our decision on the preliminary issues is not required for the start of the liability trial, and that, because of the possibility of further appeals, the trial judge will be asked to determine the factual issues on the alternative bases that either side is ultimately successful on these points.

9.

Before turning to the details of the judge’s decision and the arguments advanced by the parties, it is necessary to deal with the relevant European and domestic legislative background.

The Public Sector Directive

10.

The “Public Sector Directive” (Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts) replaced earlier directives on the same subject. Parts 1 to 8 of the Regulations (regulations 1-46) give it effect in England, Wales and Northern Ireland. Recital (2) of the Public Sector Directive makes clear that it seeks to guarantee the opening up of public procurement to competition and to draw up provisions of EU co-ordination of national procedures and to ensure that the award of such contracts respects principles of equal treatment, non-discrimination and transparency. The details of the Public Sector Directive are not material to the issue we have to decide.

The Remedies Directive

11.

Part 9 of the Regulations (regulations 47-47P) implements the “Remedies Directive” (Directive 89/665/EEC of the European Parliament and of the Council of 21 December 1989 (as amended by Directive 2007/66/EC of the European Parliament and of the Council) on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts).

12.

The recitals to the Remedies Directive include the following:-

“Whereas … effective and rapid remedies must be available in the case of infringements of Community law in the field of public procurement, or national rules implementing that law …

Whereas it is necessary to ensure that adequate procedures exist in all the Member States to permit the setting aside of decisions taken unlawfully and compensation of persons harmed by an infringement”.

13.

Article 1 provides as follows:-

“ … Member States shall take the measures necessary to ensure that, as regards contracts falling within the scope of [the Public Sector Directive], decisions taken by the contracting authorities may be reviewed effectively and, in particular, as rapidly as possible in accordance with the conditions set out in Articles 2 to 2f of this Directive, on the grounds that such decisions have infringed Community law in the field of public procurement or national rules transposing that law”.

14.

Article 2 provides as follows:-

“1.

Member States shall ensure that the measures taken concerning the review procedures specified in Article 1 include provision for the powers to:

(a)

take, at the earliest opportunity and by way of interlocutory procedures, interim measures with the aim of correcting the alleged infringement or preventing further damage to the interests concerned, including measures to suspend or to ensure the suspension of the procedure for the award of a public contract or the implementation of any decision taken by the contracting authority;

(b)

either set aside or ensure the setting aside of decisions taken unlawfully, including the removal of discriminatory, technical, economic or financial specifications in the invitation to tender, the contract documents or in any other document relating to the contract award procedure;

(c)

award damages to persons harmed by an infringement. …

3.

When a body of first instance, which is independent of the contracting authority, reviews a contract award decision, Member States shall ensure that the contracting authority cannot conclude the contract before the review body has made a decision on the application either for interim measures or for review. …

5.

Member States may provide that the body responsible for review procedures may take into account the probable consequence of interim measures for all interests likely to be harmed, as well as the public interest, and may decide not to grant such measures when their negative consequences could exceed their benefits.

A decision not to grant interim measures shall not prejudice any other claim of the person seeking such measures.

6.

Member States may provide that where damages are claimed on the grounds that a decision was taken unlawfully, the contested decision must first be set aside by a body having the necessary powers.

7.

Except where provided for in Articles 2d to 2f, the effects of the exercise of the powers referred to in paragraph 1 of this Article on a contract concluded subsequent to its award shall be determined by national law.

Furthermore, except where a decision must be set aside prior to the award of damages, a Member State may provide that, after the conclusion of a contract in accordance with Article 1(5), paragraph 3 of this Article or Articles 2a to 2f, the powers of the body responsible for review procedures shall be limited to awarding damages to any person harmed by an infringement. …”

15.

Articles 2a-2f of the Remedies Directive provide more detail in relation to review procedures, the standstill period, derogations from the standstill period, time limits for applying for review, ineffectiveness, infringements of the Remedies Directive and alternative penalties, and time limits. It is clear from all these provisions that the Remedies Directive is laying down minimum requirements for the measures which Member States are required to implement. In some areas, Member States are given an express discretion as to implementation (e.g. article 2.6) and in other areas matters are specifically left to be determined by national law (e.g. article 2.7).

16.

Moreover, it is to be observed at the outset that both the recitals and article 1 of the Remedies Directive make clear that the remedies that are to be made available are premised on situations where the decisions of public authorities have infringed Community law in the field of public procurement or national rules transposing (or implementing) that law. The scheme is, therefore, clear. Member States were to legislate to implement the minimum provisions of the Remedies Directive into their national laws.

The Regulations

17.

It was, as I have said, Part 9 of the Regulations that transposed or implemented the Remedies Directive into the law of England, Wales and Northern Ireland. Our attention was drawn to the thrust of the Explanatory Memorandum to the Regulations, to the Transposition Note and to a Consultation Document of April 2009, all of which make it reasonably clear that the Government’s intention was to do only what was necessary to implement the Remedies Directive without any “gold plating” save where such was expressly identified.

18.

Regulation 4(1) defines an “economic operator”. It was accepted that Energy Solutions was an economic operator for the purposes of the Regulations. Likewise, the NDA is a contracting authority within regulation 3.

19.

Regulations 32 and 32A in Part 5 of the Regulations provide the procedures to be followed by contracting authorities to inform tenderers of their decisions as to the award of contracts, and for the standstill period of 10 or 15 days that is to apply thereafter.

20.

Regulation 47A provides that it applies to the obligations (owed to economic operators) on a contracting authority to comply with both (i) the provisions of all the Regulations save for some specified exclusions (which are irrelevant for our purposes), and with (ii) any enforceable EU obligation in respect of a public contract or a framework agreement.

21.

Regulation 47C provides that a breach of the duty owed in accordance with regulation 47A is “actionable by any economic operator which, in consequence, suffers, or risks suffering, loss or damage”, and applies regulations to 47D to 47P to the High Court proceedings that must be started for that purpose.

22.

Regulation 47D imposes a 30-day time limit for proceedings from the date that an economic operator first knows that grounds have arisen for the start of proceedings. Regulation 47F provides that such proceedings must be served on the contracting authority within 7 days of issue.

23.

Regulation 47G is entitled “Contract-making suspended by challenge to award decision” and provides as follows:-

“(1)

Where-

(a)

a claim form is issued in respect of a contracting authority’s decision to award the contract;

(b)

the contracting authority has become aware that the claim form has been issued and that it relates to that decision; and

(c) the contract has not been entered into,

the contracting authority is required to refrain from entering into the contract.

(2) The requirement continues until any of the following occurs-

(a) the Court brings the requirement to an end by interim order under regulation 47H(1)(a) …”

24.

Regulation 47H is entitled “Interim orders” and provides as follows:-

“(1) In proceedings, the Court may, where relevant, make an interim order-

(a) bringing to an end the requirement imposed by regulation 47G(1);

...

(2) When deciding whether to make an order under paragraph (1)(a)-

(a) the Court must consider whether, if regulation 47G(1) were not applicable, it would be appropriate to make an interim order requiring the contracting authority to refrain from entering into the contract; and

(b) only if the Court considers that it would not be appropriate to make such an interim order may it make an order under paragraph (1)(a).

(3) If the Court considers that it would not be appropriate to make an interim order of the kind mentioned in paragraph (2)(a) in the absence of undertakings or conditions, it may require or impose such undertakings or conditions in relation to the requirement in regulation 47G(1) …

(5) This regulation does not prejudice any other powers of the court.”

25.

Regulation 47I is entitled “Remedies where the contract has not been entered into” and provides as follows:-

“(1) Paragraph (2) applies where-

(a) the Court is satisfied that a decision or action taken by a contracting authority was in breach of the duty owed in accordance with regulation 47A or 47B; and

(b) the contract has not yet been entered into.

(2) In those circumstances, the Court may do one or more of the following-

(a) order the setting aside of the decision or action concerned;

(b) order the contracting authority to amend any document;

(c) award damages to an economic operator which has suffered loss or damage as a consequence of the breach.

(3) This regulation does not prejudice any other powers of the Court.”

26.

Regulation 47J is entitled “Remedies where the contract has been entered into” and provides as follows:-

“(1) Paragraph (2) applies if-

(a) the Court is satisfied that a decision or action taken by a contracting authority was in breach of the duty owed in accordance with regulation 47A or 47B; and

(b) the contract has been entered into.

(2) In those circumstances, the Court -

(a) must, if it is satisfied that any of the grounds for ineffectiveness applies, make a declaration of ineffectiveness in respect of the contract unless regulation 47L requires the Court not to do so;

(b) must, where required by regulation 47N, impose penalties in accordance with that regulation;

(c) may award damages to an economic operator which has suffered loss or damage as a consequence of the breach, regardless of whether the Court also acts as described in sub-paragraphs (a) and (b);

(d) must not order any other remedies. ...”

The judge’s reasoning

27.

The judge concluded, as I have said, that he could not decide whether Energy Solutions’ failure to issue proceedings in time to prevent the conclusion of the Contract broke the chain of causation so as to deprive it of the right to any damages, because that issue raised questions of fact that could not be determined without evidence as a preliminary issue.

28.

The judge’s starting point was to hold that, in order to succeed on the point, the NDA would need to have shown that, had Energy Solutions issued the proceedings in time, the outcome would have been an order preventing the NDA concluding the Contract before the determination of the proceedings. He then expressed his concern that the NDA’s position did not go far enough in that regard. The NDA had only submitted that, had the proceedings been commenced in time, Energy Solutions “might potentially have avoided the financial loss for which it now sues”. Moreover, its proposed amended defence pleaded only that “[i]f [Energy Solutions] had been willing to offer an adequate cross-undertaking, the [NDA] would have had to consider whether to make [an application to lift the suspension of its right to enter into the Contract] in the light of the nature of the claim, the extent to which delay in entering the contract would have caused any prejudice not capable of being remedied through the cross-undertaking, the date when a trial (if expedited) would have taken place, and the legal advice which it received”.

29.

The judge continued by saying that the duty to mitigate provides that a claimant cannot recover a loss which, acting reasonably, it could have avoided, and that the question raised an issue of fact with the onus of proof on the defendant to show that (a) the claimant failed to act reasonably, and (b) if it had acted reasonably, the loss would have been avoided. It was not sufficient to show that the claimant could have followed a course that might have avoided the loss. In short, these issues raised questions that could not be determined without evidence. The position of Energy Solutions’ partner in the RSS consortium, Bechtel, added further uncertainties to the factual position.

30.

On the second point as to whether or not damages under the Regulations were discretionary, the judge first set out passages from some of the authorities relied upon by the NDA. He then cited the dicta of Buxton LJ in Matra Communications S.A.S. v. The Home Office [1999] 1 WLR 1646 (the “Matra case”) at pages 1653-5, which the judge held represented the Court of Appeal’s conclusion (not as an obiter dictum) that (a) damages under article 2.1(c) of the Remedies Directive were not Francovich damages, (b) the right to damages that the member states were obliged by article 2.1(c) to create were sui generis in EU terms and found its origins and limits in the specific provisions of the Remedies Directive, rather than EU law generally, and (c) the Regulations created a private law, non-discretionary, remedy, because within the national legal order any remedy in damages necessarily has those qualities.

31.

The judge then cited extensively from the decision of the CJEU in Combinatie Spijker v. Provincie Drenthe Case (C-568/08) at paragraphs 85-87 and 90-92, where the CJEU referred to it having been held that individuals harmed had a right to reparation where the 3 Francovich conditions were met. The CJEU had said at paragraph 90 that it was “for the legal order of each Member State to determine the criteria on the basis of which damage arising from an infringement of EU law on the award of public contracts must be determined and estimated”. He regarded it as significant that the CJEU had emphasised the importance of compliance with the EU law principle of equivalence (i.e. that the detailed procedural rules governing actions for safeguarding an individual’s rights under EU law must be no less favourable than those governing similar domestic actions). The judge was not aware of any situation in English domestic law in which an award of damages was discretionary, or where there was a threshold to the award of damages based on an analysis of the gravity of the breach.

32.

The judge cited paragraph 84 of the CJEU’s decision in the Brasserie du Pêcheur case (to which I shall return) but held that it was “really no more than a statement of the rule relating to avoidable loss”. He then referred to Danske Slagterier v. Bundesrepublik Deutschland (Case C-445/06) [2009] 3 CMLR 10 (the “Danske Slagterier case”) at paragraphs 58 and 60-2, which he thought concerned the EU law principle of effectiveness (i.e. that the detailed procedural rules governing actions for safeguarding an individual’s rights under EU law must not render practically impossible or excessively difficult the exercise of rights conferred by EU law). The case decided, according to the judge, simply that it would be contrary to the principle of effectiveness to oblige an injured party to have recourse systematically to all legal remedies available if that would give rise to excessive difficulties or could not reasonably be required. The judge observed that the case was brought against a Member State which limited a claimant to Francovich damages in EU law. Moreover, the question in this case was whether a claimant had acted reasonably in availing itself of a legal remedy. In the judge’s view, the Regulations gave the claimant a choice of two equally important remedies.

33.

The judge cited Commission v. Portuguese Republic (Case C-275/03) (the “Portuguese case”) and Stadt Graz v. Strabag AG and others (Case C-314/09) (the “Stadt Graz case”), and concluded in paragraph 86 that any award of damages was not dependent on the level of gravity of the breach, or any other such factor, and was thus not dependent on an exercise of judicial discretion or judgment. A claimant proving a breach of the duty owed under the Regulations was entitled to damages that should be assessed by reference to ordinary principles, including the principles of mitigation.

The arguments of the parties

34.

It is not easy to compartmentalise the two issues. They are intimately inter-related. It is most straightforward to start by outlining the NDA’s submissions on the second issue.

35.

The NDA submits that the correct answer to the second issue was that it was not obligatory for the court to make an award of damages to an unsuccessful tenderer under regulation 47J(2)(c) when it is satisfied that it has suffered loss as a consequence of the breach of the Regulations. That is because the right that the unsuccessful tenderer is enforcing is a public law right and an EU law right. Article 2 of the Remedies Directive provides for there to be a “power” to award damages to persons harmed by the infringement. The NDA submits that the judge ought to have followed the decision in the Spijker case and held that the 3 Francovich conditions had to be fulfilled before damages would be awarded, but that thereafter it was for the internal legal order of each member state to determine the criteria on which damages would be awarded provided that the principles of equivalence and effectiveness were complied with. The second Francovich condition required it to be shown that the breach was “sufficiently serious” for damages to be awarded. The NDA also submits that the judge ought not to have read the words “may award damages” in regulation 47J(2)(c) as if they read “must award damages”. The word “may” gives effect to the Francovich conditions, properly reflects the power in article 2.1(c) of the Remedies Directive, and provides the court with general discretion as to the award of damages provided the principles of equivalence and effectiveness are given effect.

36.

Energy Solutions responds to this approach by submitting that a proper understanding of the Spijker case shows that it was not seeking to impose the Francovich conditions on claims brought under national legislation implementing the Remedies Directive. Instead, there are three main reasons why the right to damages for an infringement is not discretionary:-

i)

There are two separate rights referred to in article 1.1 of the Remedies Directive: first, a right based on an infringement of EU law, and secondly a right based on an infringement of the national rules implementing or transposing that law into national law. The claim under the Regulations is in the second category and is therefore governed by national law principles, which has no concept of discretionary damages.

ii)

Article 3 of the Remedies Directive allows the European Commission certain rights of intervention where there is a “serious infringement” of EU law. It makes no sense to refer to a “seriousness” requirement in that context but not in relation to the unsuccessful tenderer’s rights, if it was intended to provide for a seriousness requirement under the second of the Francovich conditions.

iii)

In the Portuguese case and the Stadt Graz case, the CJEU made it clear that it was not open to Member States to limit the right to damages by imposing a requirement for the public authority to be at fault, because the Remedies Directive requires effective procedures to provide damages to persons harmed by infringements of EU law. The rights of economic operators could not, by analogy, be limited by imposing any requirement for there, for example, to be a “sufficiently serious” breach.

37.

Mr Nigel Giffin QC, leading counsel for the NDA, responded to these points by submitting that none of them can overcome the express findings of EU law in the Spijker case, which had itself referred to the Stadt Graz case. There is only one EU law right to damages, and the European Commission’s right to intervene under article 3 of the Remedies Directive is before the conclusion of the contract and on a completely separate basis.

38.

Finally on the second issue, Energy Solutions submits that the judge was right to hold that there was no discretion as to the award of damages. Such a discretion and a requirement for there to be a “sufficiently serious breach” would violate each of the EU law principles of legal certainty, equivalence and effectiveness.

39.

Energy Solutions then contends that the judge ought to have answered the first preliminary issue in the negative whether or not it turns out at trial that its omission to issue proceedings in time to invoke the standstill procedure was reasonable for 4 main reasons as follows:-

i)

Any loss sustained by an unsuccessful tenderer as a result of the public authority entering into a contract with another person in breach of the authority’s obligations under the Regulations results from the authority’s own actions in entering into that contract, and not from any failure by the tenderer to bring or pursue proceedings as it might have done.

ii)

It is not unreasonable for an unsuccessful tenderer to seek only damages rather than any injunctive relief if it considers damages to be an adequate remedy.

iii)

A requirement that a claim for damages by an unsuccessful tenderer under the Regulations must be brought before the contract with the successful tenderer is entered into violates regulation 47D(2) and the EU law principles of legal certainty and effectiveness.

iv)

A requirement that an unsuccessful tenderer must do whatever it can or whatever is reasonable to prevent the public authority entering into the contract with the successful tenderer before it can claim damages for the breach of the authority’s obligations violates the EU law principles of legal certainty and equivalence.

40.

The NDA broadly supports the judge’s approach to the first issue, though it questions his suggestion at paragraph 90 that the NDA’s approach would force unsuccessful tenderers always to assert that damages would not be an adequate remedy, whether that was true or not. The application will be determined either by consent or by the court. In either case, it will determine the reasonableness of the stance adopted by the unsuccessful tenderer. Finally the NDA takes issue with the judge’s criticisms of its pleadings and submissions, arguing that it has behaved responsibly in not putting forward a binary position. It may, the NDA says, turn out that Energy Solutions would never have offered a cross-undertaking in damages. In that case, the question of how the NDA would have responded if it had is irrelevant. Moreover, it is wrong in principle for the NDA to be required to prove what would have happened in an uncertain hypothetical situation which never arose because of Energy Solutions’ unreasonable behaviour. Mr Giffin’s main point on the first issue was that it had been expressly held in the Brasserie du Pêcheur case that in determining the loss or damage for which reparation may be granted in EU law, “the national court may enquire whether the injured person showed reasonable diligence in order to avoid the loss or damage or limit its extent and whether, in particular, he availed himself in time of all the legal remedies available to him” (paragraph 84 of the CJEU’s judgment, and see also paragraphs 98-99 in the opinion of Advocate General G Tesauro).

The nature of the claim for damages

41.

It is important first to identify the nature of the claim for damages that Energy Solutions brings in this case. The starting point for this analysis must be the terms of the Remedies Directive and of the Regulations themselves. The Remedies Directive makes it clear that it is requiring Member States to take domestic legislative measures to allow for effective review, in accordance with articles 2-2f, of decisions by public authorities in relation to contracts on the grounds that those decisions have infringed either EU law in the field of public procurement (i.e. contained in the Public Sector Directive) or national rules implementing that law (see article 1 of the Remedies Directive and the recitals cited above). Article 2 of the Remedies Directive, to which article 1 refers, provides that Member States shall ensure that the measures they took concerning these “review procedures” include “provision for powers to … award damages to persons harmed by an infringement”.

42.

The domestic legislative measures taken by the Government were the Regulations, part 9 of which laid down the detailed rules applicable to applications to the court in respect of alleged breaches of the obligations (under regulation 47A) owed to economic operators to comply with both the provisions of the Regulations and with any relevant enforceable EU obligations in respect of a contract. Regulation 47C makes those breaches of duty actionable by any economic operator which, in consequence, suffers loss.

43.

On any normal textual analysis, therefore, it would seem that the Regulations were creating a domestic law cause of action for breach of the contracting public authority’s duties under the Regulations and providing a mechanism for the enforcement of an economic operator’s rights under EU law. The latter could presumably in this context only arise under the Public Sector Directive and/or the Remedies Directive. In this context, it should be noted that the CJEU decided in Gebroeders Beentjes BV v. State of the Netherlands (Case 31/97) that the provisions of certain articles of the pre-existing Public Sector Directive (71/305) could be relied on by an individual before national courts.

44.

The nature of these rights, or at least the equivalent less extensive rights existing in the late 1990s, was considered by the Court of Appeal in the Matra case. The issue in that case was whether the domestic provisions for a 3-month time limit and its possible extension violated the EU law principles of equivalence and effectiveness. The substantive claims were made for breaches of the predecessors of both the Public Sector Directive and of the Regulations. The claimant disavowed a contention that what it was claiming was Francovich damages (page 1653E). Buxton LJ (with whom Hirst and Mummery LJJ agreed) held at page 1655 that the right to damages that the Member States were obliged to create by article 2.1(c) was sui generis in EU terms and found its origins and limits in the specific provisions of the Remedies Directive, rather than EU law generally, and that the Regulations created a private law, non-discretionary, remedy. The Court of Appeal then compared the cause of action under the Regulations with other domestic claims and concluded that the claimant’s claim under the Regulations had no comparators in national law, so that the 3-month time limit could not be impugned under the EU law principle of equivalence. It is hard, therefore, to see how the dicta as to the inapplicability of Francovich damages can have been part of the ratio of the case, since the questions all concerned issues as to whether or not the time limits in the Regulations infringed EU law principles. It was not suggested they infringed the 3 Francovich conditions.

45.

Conversely, however, part at least of Buxton LJ’s dictum as to the status of the claim under the Regulations does seem to me to form part of the essential reasoning leading to the decision. The Regulations provide for a cause of action for breaches of the provisions of parts 1-8 of the Regulations, which must be regarded in these courts as an action for breach of statutory duty. It was because the claim was an action for breach of statutory duty that it had to be compared, in order to give effect to the EU law principle of equivalence, to other such duties. In any event, I have no doubt that Buxton LJ was right to hold that the claim under the Regulations was indeed a private law claim for breach of statutory duty. The fact that a claim can also be made directly for breach of duties owed directly under the Public Sector and/or Remedies Directive cannot affect this reality. Finally, in relation to the Matra case, Buxton LJ’s dictum that the claim for damages under the Regulations was a “non-discretionary remedy” does seem to me to have been obiter.

46.

It is worth noting at this stage that Energy Solutions’ pleaded claim is very detailed indeed but pleads only breaches of the Regulations and no direct breaches of duties owed under either the Public Sector Directive or the Remedies Directive. In these circumstances, it seems to me that the court in this case is concerned with a series of alleged breaches of statutory duty arising under the domestic law provisions of the Regulations. Those Regulations were, however, enacted in order to implement in English law, the EU law provisions of the Public Sector Directive and the Remedies Directive.

47.

I can turn now to deal with the question of whether the judge was right to answer the second preliminary issue in the negative.

The second preliminary issue

48.

The first question under the second preliminary issue is whether there is any discretion as to the award of damages in this case if it is later shown that Energy Solutions has suffered loss as a consequence of the NDA’s breaches of duty. I have started by considering the nature of Energy Solutions’ claim because the NDA’s argument was in essence, as I have said, that the claim was one for Francovich damages and was therefore affected by the 3 Francovich conditions, of which the requirement for a sufficiently serious breach and for a direct causal link are the most significant in this case. The determination of whether the breach was or was not “sufficiently serious” would necessarily make the award of damages discretionary. Mr Giffin submitted, again as I have said, that this result was mandated by the Spijker case.

49.

I should start once again, I think, by making brief reference to the legislative provisions. Article 2.1 of the Remedies Directive mandates Member States to include in their domestic legislative measures a “power” to award damages to persons harmed by an infringement. The infringement in question, is, as I have said, either an infringement of EU law on public procurement or of the national rules transposing that law. It is perhaps worth noting also that article 2.6 allows Member States to provide in their own legislation for damages on the grounds of unlawfulness of the decision only to be available where the contested decision has first been set aside. The Regulations did not take advantage of any such possibility.

50.

The Regulations do not say very much about the way in which damages will be dealt with. Regulation 47J(2) provides for the available remedies where there has been a breach of duty under regulation 47A and the contract has been entered into. Those remedies “must” or “must not” be granted in 3 cases, but only “may” be awarded in the case of damages “to an economic operator which has suffered loss or damage as a consequence of the breach, regardless of whether the Court also” makes a declaration of ineffectiveness and/or imposes penalties. The NDA places heavy reliance on this distinction and the use of the word “may”.

51.

Against that background, it is necessary to consider the CJEU decisions relied upon by the parties which are said, on the one hand to impose the Francovich conditions on the damages claim, and on the other hand to mandate a non-discretionary award. It is useful to consider these decisions in chronological order.

52.

The Brasserie du Pêcheur case (5th March 1996) is of central importance in relation to the Francovich conditions, but it was not a procurement case. Rather there were two claims. The first was a claim for damages by a French brewing company against Germany arising from it having had to discontinue beer exports to Germany by reason of the purity requirements in German law, which violated the Treaty of the EU. The second was a claim for damages against the United Kingdom based on the registration conditions in the Merchant Shipping Act 1988 having been declared unlawful under EU law.

53.

Advocate General Tesauro made specific reference to the Public Sector Directive and the Remedies Directive, commenting at paragraph 46 of his opinion that the EU legislature had provided substantive protection and a system of damages that was novel in many Member States “to compensate for the injury caused by the unlawfulness of contract award procedures in the event of the absence or insufficiency of real protection”. In relation to the causal link required by the 3rdFrancovich condition, both the Advocate General at paragraphs 98-99 and the CJEU at paragraphs 84-85 referred to the requirement for the injured party to act diligently to avoid or reduce the damage (see Mulder [1992] E.C.R. I-3061, 3136-7, paragraph 33). Both also referred to the possibility of the chain of causation being broken by the injured party having failed to make use of the available legal remedies. In paragraph 117, the Advocate General made clear that what he was talking about was the entitlement of a Member State to impose such conditions provided it lays down the same conditions for similar domestic claims.

54.

The CJEU recited the 3 Francovich conditions at paragraph 51, before dealing with each in turn. In relation to the third condition and then in relation to the actual extent of the reparation, the CJEU said this:-

“65.

As for the third condition, it is for the national courts to determine whether there is a direct causal link between the breach of the obligation borne by the state and the damage sustained by the injured parties.

66.

The aforementioned three conditions are necessary and sufficient to found a right in individuals to obtain redress, although this does not mean that the state cannot incur liability under less strict conditions on the basis of national law.

67.

As appears from [the Francovich case] paras. 41-43, subject to the right to reparation which flows directly from Community law where the conditions referred to in the preceding paragraph are satisfied, the state must make reparation for the consequences of the loss and damage caused in accordance with the domestic rules on liability, provided that the conditions for reparation of loss and damage laid down by national law must not be less favourable than those relating to similar domestic claims and must not be such as in practice to make it impossible or excessively difficult to obtain reparation …

74.

Accordingly, the reply to the questions from the national courts must be [to restate the Francovich conditions]. Subject to that reservation, the state must make good the consequences of the loss or damage caused by the breach of Community law attributable to it, in accordance with its national law on liability …

81.

By these questions, the national courts essentially ask the court to identify the criteria for determination of the extent of the reparation due by the Member State responsible for the breach.

82.

Reparation for loss or damage caused to individuals as a result of breaches of Community law must be commensurate with the loss or damage sustained so as to ensure the effective protection for their rights.

83.

In the absence of relevant Community provisions, it is for the domestic legal system of each Member State to set the criteria for determining the extent of reparation. However, those criteria must not be less favourable than those applying to similar claims based on domestic law and must not be such as in practice to make it impossible or excessively difficult to obtain reparation.

84.

In particular, in order to determine the loss or damage for which reparation may be granted, the national court may inquire whether the injured person showed reasonable diligence in order to avoid the loss or damage or limit its extent and whether, in particular, he availed himself in time of all the legal remedies available to him.

85.

Indeed, it is a general principle common to the legal systems of the Member States that the injured party must show reasonable diligence in limiting the extent of the loss or damage, or risk having to bear the damage himself: Mulder [supra]. …

90.

Accordingly, the reply to the national courts must be that reparation by Member States of loss or damage which they have caused to individuals as a result of breaches of Community law must be commensurate with the loss or damage sustained. In the absence of relevant Community provisions, it is for the domestic legal system of each Member State to set the criteria for determining the extent of reparation. …”

55.

In my judgment, the CJEU was saying that it was for the national court to determine whether the Francovich conditions had been met and, more importantly, that it was open to national law to provide for liability under less strict conditions. The rules on both liability and the extent of the reparation are to be determined by that national law. This is important because Mr Giffin submitted that the Francovich conditions and the CJEU’s comments at paragraph 84 relating to mitigation applied in every case regardless of national law. That is not how I read the CJEU’s judgment. All the CJEU was saying was, in effect, that the Francovich conditions are a minimum standard for damages for breach of an EU law right, and that the liability and assessment of those damages will be a matter for national law, but that national law may inquire whether the claimant showed reasonable diligence to avoid the loss and may inquire whether the claimant had availed himself of all legal remedies available to him. The CJEU did not, I think, say that the domestic legal system must impose such requirements, even in a claim for pure Francovich damages such as in the cases before the CJEU in Brasserie du Pêcheur.

56.

In the Portuguese case (14th October 2004), the Portuguese government had transposed the Remedies Directive into its national law so as to make liability of the contracting authority dependent on it being at fault. In paragraph 31, the CJEU said that “[a]lthough Portuguese law provides for the possibility of obtaining damages in the case of a breach of EU law relating to the award of public contracts or of national laws, implementing EU law, it cannot be considered as an adequate judicial protection so far as it requires proof of fault or fraud …”. This decision was echoed in the Stadt Graz case to which I shall refer in a moment.

57.

Vincenzo Manfrediv. Lloyd Adriatico Assicurazioni SpA (joined cases C-295/04 to C-298/04) (13th July 2006) concerned a claim for damages in a competition claim under article 81 of the Treaty of the EU. The CJEU held at paragraphs 63-64 that, in the absence of governing EU rules, it was for the domestic legal system of each Member State to prescribe the detailed rules governing the claim for compensation and the application of the concept of the causal relationship between the prohibited conduct and the harm suffered.

58.

The Danske Slagterier case (24th March 2009) concerned a claim for damages based on Germany’s ban on the import of uncastrated pigs from Denmark in breach of EU law. The German legislation limited the right to compensation where the injured party had “wilfully or negligently failed to avert the damage by utilising a legal remedy”. The CJEU said this at paragraphs 59-64:-

“59 … it is for the Member States, in the absence of Community legislation, to lay down the detailed procedural rules for legal proceedings intended to safeguard the rights which individuals derive from Community law, in so far as those rules observe the principles of equivalence and effectiveness.

60As regards utilisation of the available legal remedies, the Court held in Brasserie du pêcheur and Factortame, paragraph 84, in relation to liability of a Member State for breach of Community law, that the national court may inquire whether the injured person showed reasonable diligence in order to avoid the loss or damage or limit its extent and whether, in particular, he availed himself in time of all the legal remedies available to him.

61Indeed, it is a general principle common to the legal systems of the Member States that the injured party must show reasonable diligence in limiting the extent of the loss or damage, or risk having to bear the loss or damage himself ([Mulder paragraph 33, and the Brasserie du Pêcheur case, paragraph 85]).

64Consequently, it is to be concluded that Community law does not preclude the application of a national rule such as that laid down in Paragraph 839(3) of the BGB [the German statute], provided that utilisation of the legal remedy in question can reasonably be required of the injured party. It is for the referring court to determine in light of all the circumstances of the main proceedings whether that is so.”

59.

These are important passages because they make clear that what had been said in the Brasserie du Pêcheur case was that European law did not preclude either a rule of national law requiring reasonable diligence to avoid loss (i.e. mitigation of damage in English legal terms), or a rule requiring a claimant to avail itself of prior legal remedies before claiming damages, provided that it was reasonable to require it to do so. But these rules were not themselves requirements of European law.

60.

In the Stadt Graz case (30th September 2010), the CJEU was asked whether articles 1.1 and 2.1(c) of the Remedies Directive precluded a rule of Austrian law under which claims for damages for the infringement of EU procurement law were subject to the requirement of fault. In answering this question, the CJEU emphasised at paragraph 33 that the Remedies Directive “lays down only the minimum conditions to be satisfied by the review procedures established in domestic law to ensure compliance with the requirements of EU law concerning public procurement”. It continued by saying that, in the absence of a specific EU provision, it was for domestic law to determine the measures necessary to ensure the effective award of damages to persons harmed by an infringement of the law on public contracts. In paragraph 35, it was noted that the Remedies Directive did not indicate that the right to damages should be connected to the fault of the contracting authority. After referring to the Portuguese case, the CJEU concluded at paragraphs 41-44 that the Austrian fault requirement created the risk that the tenderer would be deprived of or delayed in obtaining his right to damages, which would be contrary to the expressed aim of the Remedies Directive.

61.

I turn now to the Spijker case (9th December 2010) upon which the NDA places central reliance. The facts in the Spijker case are a little complicated by the fact that the referring court thought that an interim measures order had required the authority to contract with the successful bidder, MFE, but the CJEU did not. The CJEU, therefore, only answered a reformulated question about whether, if the authority has to make good the damage arising from an infringement of EU law on the award of public contracts, EU law provides criteria on the basis of which the damage may be (a) determined and (b) estimated. It is necessary to look carefully at the answers that the CJEU gave at paragraphs 86-92. There is, therefore, no alternative to setting out those paragraphs in their entirety as follows:-

“86 Article 2(1)(c) of [the Remedies Directive] clearly indicates that Member States must make provision for the possibility of awarding damages in the case of infringement of EU law on the award of public contracts, but contains no detailed statement either as to the conditions under which an awarding authority may be held liable or as to the determination of the amount of the damages which it may be ordered to pay.

87 That provision gives concrete expression to the principle of State liability for loss and damage caused to individuals as a result of breaches of EU law for which the State can be held responsible. According to case-law developed since the adoption of the [Remedies Directive], but which is now consistent, that principle is inherent in the legal order of the Union. The Court has held that individuals harmed have a right to reparation where three conditions are met: the rule of EU law infringed must be intended to confer rights on them; the breach of the rule must be sufficiently serious; and there must be a direct causal link between the breach of the loss or damage sustained by the individuals ([the Francovich case, the Brasserie du Pêcheur case] paragraphs 31 and 51; and [the Danske Slagterier case] paragraphs 19 and 20).

88 As matters stand at present, the case-law of the Court of Justice has not yet set out, as regards review of the award of public contracts, more detailed criteria on the basis of which damage must be determined and estimated.

89 As regards EU legislation, it should be noted that Directive 89/665 has been largely amended by Directive 2007/66/EC of the European Parliament and of the Council of 11 December 2007 amending Council Directives 89/665/EEC and 92/13/EEC (OJ 2007 L 335, p. 31), adopted after the date of the facts which gave rise to the dispute in the main proceedings. However, on that occasion, the EU legislature refrained from adopting any provisions on that point.

90 In the absence of EU provisions in that area, it is for the legal order of each Member State to determine the criteria on the basis of which damage arising from an infringement of EU law on the award of public contracts must be determined and estimated (see, by analogy, Case C-315/01 GAT [2003] ECR I-6351, paragraph 46; and Case C-314/09 [the Stadt Graz case] [2010] ECR I-8769, paragraph 33) provided the principles of equivalence and effectiveness are complied with (see, to that effect, Joint Cases C-295/04 to C-298/04 Manfredi and others [2006] ECR I-6619, paragraph 98).

91 It is apparent from well-established case law that the detailed procedural rules governing actions for safeguarding an individual's rights under EU law must be no less favourable than those governing similar domestic actions (principle of equivalence) and must not render practically impossible or excessively difficult the exercise of rights conferred by EU law (principle of effectiveness) ...

92 Therefore, the answer to the fourth question, part (c) is that, as regards State liability for damage caused to individuals by infringements of EU law for which the State may be held responsible, the individuals harmed have a right to redress where the rule of EU law which has been infringed is intended to confer rights on them, the breach of that rule is sufficiently serious, and there is a direct causal link between the breach and the loss or damage sustained by the individuals. In the absence of any provision of EU law in that area, it is for the internal legal order of each Member State, once those conditions have been complied with, to determine the criteria on the basis of which the damage arising from an infringement of EU law on the award of public contracts must be determined and estimated, provided the principles of equivalence and effectiveness are complied with.”

62.

In my judgment, what these passages make clear is that the Francovich conditions apply to the infringements of EU law under the Remedies Directive, but that these are the minimum conditions applicable, and are always subject (as the judge pointed out in his paragraph 71) to the principle of equivalence. It is significant that in paragraph 90 of the CJEU’s decision in the Spijker case, it referred to paragraph 33 of its decision in Stadt Graz case. That paragraph, it will be recalled, said that the Remedies Directive laid down only the minimum conditions to be satisfied by the review procedures established in domestic law to ensure compliance with the requirements of EU law concerning public procurement. It was otherwise for domestic law to ensure an effective award of damages. It is also worthy of note that the entire passage concerns the claim for damages for an infringement of the individual’s EU law rights under the Directive.

63.

Finally in Kone AG v ÖBB-Infrastruktur AG (Case C-557/12) (5th June 2014), another competition case, the CJEU reiterated at paragraph 24 that, in the absence of EU rules on causation, it was for the Member State to lay down the detailed rules governing the exercise of the right to claim compensation for the harm in question, including the application of the concept of the “causal relationship”, subject always to the EU law principles of equivalence and effectiveness.

64.

The questions asked by the preliminary issues make clear that they are concerned with the alleged breaches by the NDA under the Regulations. In any event, that is the approach that the NDA has itself adopted (see its solicitors’ letter dated 6th November 2014 cited in paragraph 19 of the judge’s judgment contending that the court has a general discretion under regulation 47J(2)(c)). Moreover, the Regulations were enacted (under article 1 of the Remedies Directive) in order to “take the measures necessary to ensure that … decisions taken by the contracting authorities may be reviewed effectively … on the grounds that such decisions have infringed Community law in the field of public procurement or national rules transposing that law”.

65.

The CJEU in the Spijker case stated clearly that EU law had not yet provided the “more detailed criteria on the basis of which damage must be determined and estimated”. By “more detailed”, it clearly meant the criteria beyond the Francovich conditions. But the Francovich conditions have always been stated to be minimum conditions as I have explained. It is open to national law to lay down more generous provisions, in this case to provide effective compensation to individuals harmed by infringements of the EU law on public procurement or of the national rules transposing that law.

66.

For all these reasons, I have no doubt that, if national law lays down criteria that provide a less restrictive remedy in damages than would be provided by the application of the Francovich conditions, national law will prevail for the benefit of those harmed by the relevant infringements. Moreover, I do not think that it makes any difference in this regard whether the infringement alleged is one of directly enforceable EU law or one of the domestic law enacted to give effect to the EU law obligations. Any such distinction would be illogical and is not justified by any sensible reading of the cases that I have cited above. The origin of the right to damages in the Regulations is article 2.1(c) of the Remedies Directive. It cannot make any difference which of the two rights is relied upon. Thus, therefore, whilst I agree with Energy Solutions’ submission that there are, in theory, two separate rights, I do not think that the distinction makes any difference to the damages that may be claimed in an English court, which in both cases are to be determined and estimated according to English law. Under English law, as I have said, the primary claim under the Regulations is a private law claim for breach of statutory duty.

67.

In these circumstances, the question resolves itself into an analysis of whether the claim for damages under the Regulations is a discretionary one. For the reasons the judge gave, I am sure that it is not, at least not in the sense that the NDA contends. There is no requirement in English law for a breach of statutory duty to be shown to be “sufficiently serious” before damages must be awarded. A breach is a breach. Once a breach is established, the victim of that breach is entitled to be compensated in damages such as to put the victim in the position he would have been in had there been no breach. The assessment of the quantum of damages has an element of judgment about it, but the exercise upon which the court embarks is governed by well-established legal principles. The second Francovich condition is a more restrictive condition for liability in damages than prevails in English law and is therefore displaced by the national rules in the absence of EU rules in this area as to the determination and estimation of appropriate damages. It does not, I think, matter that the Government did not intend to “gold plate” the EU law on public procurement when it introduced the Regulations. It did undoubtedly intend that English law principles should be applied to the determination and assessment of damages awarded under the Regulations.

68.

Save in one respect, the third Francovich condition requiring a “direct causal link” between the breach and the loss sustained is not suggested to be any different in principle from the causation requirement in English law. The difference suggested relates to mitigation of damages. It is submitted by the NDA that EU law mitigation principles allow failure of the claimant to avail himself of all available legal remedies to break the chain of causation. I shall return to this issue when I deal below with the first preliminary issue.

69.

In relation to the second preliminary issue, it only remains to mention the NDA’s argument that the effect of article 2.1 of the Remedies Directive requiring Member States to provide for a “power” to award damages and of regulation 47J(2)(c) saying that damages “may” be awarded is to import the discretion for which it contends. The CJEU authorities make clear that the Remedies Directive is not prescriptive as to the determination or estimation of the damages. Moreover, the right it contemplated was subject to the Francovich conditions, the second of which may at least be said to have imported an element of discretion. But in my judgment neither the use of the word “power” in the Remedies Directive nor the use of the word “may” in the Regulations says anything about how the damages are to be determined or estimated by the national court. That is a matter for normal national rules, in this case the rules of English domestic law.

70.

For the reasons I have sought to give, the judge answered the second question correctly and I would dismiss the NDA’s appeal on the point.

The first preliminary issue

71.

The first preliminary issue may be dealt with more shortly, bearing in mind what I have already said. It is, I think, beyond doubt that questions of mitigation of damages are properly to be regarded as questions of either the “determination or estimation” of damages (see the Spijker case). Those matters are, as I have said, matters for national law on well-established CJEU authority.

72.

It is, therefore, first necessary to ascertain whether there is any rule of English law that allows the chain of causation to be broken because a claimant has failed to avail itself of additional legal remedies available to it. The judge took the view that this was not a question that could be determined without a trial of the facts. He engaged with the facts and envisaged circumstances in which it could be shown that, had Energy Solutions issued the proceedings earlier, and had it offered an undertaking in damages, its loss might have been avoided. He was unimpressed, on the other hand, with the NDA’s failure to make clear what exactly it was saying would or would not have occurred had Energy Solutions started proceedings early enough to extend the standstill period under regulation 47G.

73.

In my judgment, however, this kind of speculation was unnecessary to provide a clear answer to the first preliminary issue. Neither party has been able to point to any authority in English law whereby a claimant has been deprived of damages otherwise payable on the basis that it failed to seek an interlocutory injunction. That, as it seems to me, may be partly because an injunction has always been an equitable remedy, so that it would be counter-intuitive for an English lawyer to contend that it might be incumbent on a party to apply for such a remedy. Where the claimant has a common law cause of action, like a claim for breach of statutory duty, that claim entitles the claimant to damages to be determined and assessed on normal principles. It does not entitle the claimant to an equitable remedy, though the court may think it appropriate, if asked, to grant one whether at an interlocutory or a final stage.

74.

The NDA does not much resist these points. Its skeleton accepts that applications to lift the suspension are in effect considered as if they were applications for an interim injunction, even though they work the other way around, and that normal American Cyanamid Co v. Ethicon Ltd [1975] AC 396 principles are applied. Rather, the NDA submits that the CJEU authorities compel the application of an EU law principle that a claimant which fails to avail itself of all available legal remedies may be deprived of its damages. That so-called principle is most clearly stated in paragraph 84 of the Brasserie du Pêcheur case that I have already cited. The CJEU said that “in order to determine the loss or damage for which reparation may be granted, the national court may inquire whether the injured person showed reasonable diligence in order to avoid the loss or damage or limit its extent and whether, in particular, he availed himself in time of all the legal remedies available to him” (my emphasis). As I have already made clear, the CJEU was not laying down any principle that was mandatorily applicable, whatever was provided for in domestic law. It was simply drawing attention to the fact that this might be an appropriate approach. Even if it were part of the Francovich conditions, it would remain a minimum standard, so that it must be open to national law to apply a more generous approach to the award of damages. Any other result would violate the principle of equivalence.

75.

In short, it seems to me that if, as a matter of English law, there is no legal principle allowing for a claimant to be deprived of its damages for failing to apply for interim discretionary relief, such a principle cannot be overlaid by EU law to the detriment of the claimant injured by the infringement of his EU law rights transposed into English law.

76.

Finally, in this connection, there is nothing in either the Remedies Directive or the Regulations to suggest that a person whose rights under these instruments have been infringed should be deprived of damages because of a failure to invoke any other available remedy. The standstill and court application regime is available as an option to the unsuccessful tenderer. Had the legislators wished to make it a pre-condition to the availability of damages, they could easily have said so.

77.

In my judgment, therefore, the answer to the first preliminary issue ought to have been “no”. I would therefore allow the appeal on this issue.

Conclusion

78.

In my judgment, the answers to the two preliminary issues applicable to the parties in this case are as follows. I have tried to formulate the answers to the questions so as to eliminate the multiple negatives in the questions:-

i)

Energy Solutions’ failure to issue and alert the NDA to a claim form before it entered into the Contract does not break the chain of causation between any breaches of the NDA’s obligations that may be established and any loss caused to Energy Solutions in consequence of them.

ii)

The English court has no discretion as to making an award of damages to Energy Solutions if it is shown to have suffered loss as a consequence of breaches of duty established against the NDA under the Regulations.

79.

This result means that I would allow Energy Solutions’ appeal on the first issue and dismiss the NDA’s appeal on the second issue.

Lord Justice Tomlinson:

80.

I agree.

The Master of the Rolls:

81.

I also agree.

Energysolutions EU Ltd v Nuclear Decommissioning Authority

[2015] EWCA Civ 1262

Download options

Download this judgment as a PDF (564.4 KB)

The original format of the judgment as handed down by the court, for printing and downloading.

Download this judgment as XML

The judgment in machine-readable LegalDocML format for developers, data scientists and researchers.