Parker Rhodes Hickmotts Solicitors v The Legal Services Commission

Introduction

This is an application for judicial review brought by the claimant firm against the defendant in respect of the defendant’s decisions, said by the claimant to have been made on 28 June and 13 October 2010, in allocating contracts for the provision of publicly funded legal services in the immigration and asylum fields, for the period from October 2010 to October 2013, in the North East, Yorkshire and Humber “Procurement Area” in response to tenders, including a tender by the claimant to provide such services in the South Yorkshire and West Yorkshire “Access Points” from offices in Rotherham and Wakefield.

The defendant’s allocation of work, assessed on historic case loads, was achieved by allocating what it called “New Matter Starts” (“NMS”), proportionately among successful bidders. In the “South Yorkshire Access Point” there were available for allocation 2920 asylum and 1750 immigration NMS. The claimant applied for 250 immigration and 800 asylum NMS in Rotherham and 50 immigration and 400 asylum NMS in Wakefield. This would have yielded a total of 1500 NMS. By the decisions under challenge the claimant was awarded 212 asylum and 145 immigration NMS for the Rotherham office. In the previous contract period the claimant’s allocation had been 750 asylum and 250 immigration NMS. I do not think that I heard what, if any allocation had been available to the claimant for Wakefield.

Adopting the summary of the grounds given in the skeleton argument of Mr Tassadat Hussain for the claimant, the allocation decision is challenged on three grounds. First, it is said that one of the tender criteria adopted by the defendant was unfair, arbitrary and irrational. Secondly, it is said that the defendant has unlawfully failed to apply its own policy adopted for the bidding process. Thirdly, it is argued that the defendant failed properly to verify that tendering organisations, who were ultimately awarded contracts, were capable of meeting the tender requirements in respect of the NMS for which they had made bids. I will amplify the substance of these grounds below.

By an order of 5 April 2011, Mr Justice Langstaff refused permission to apply for review on a number of grounds, save for those stated in paragraphs 25, 25a-q, 26 and 36 of the claimant’s grounds of claim and formally directed a “rolled up” permission/substantive application to be listed before me in the period between 4 to 13 May 2011. He indicated that he would have given permission to apply for review on the grounds mentioned, but for a live issue as to whether the claim had been brought sufficiently promptly under the rules. The grounds identified by Mr Justice Langstaff as meriting argument, although rather differently worded in the grounds of claim, are essentially those summarised in the skeleton argument for the claimant referred to above. The matter was heard by me accordingly on Monday, 9 May 2011. As mentioned, Mr Tassadat Hussain appeared for the claimant; Miss Fiona Scolding appeared for the defendant.

The Tendering Process and Chronolgy

The tender process was begun for the period October 2010 to October 2013 in late November 2009. The rules of tender were governed by a document entitled “Information for Applicants” (“IFA”). The claimant says that the document was published on 30 November 2009; the defendant says that the relevant date was 28 November 2009. I do not think that the precise date is important for present purposes . Whatever the correct date the IFA identified the tender as being open from 30 November 2009 and as closing on 28 January 2010. The bids had to be made electronically through the defendant’s “e-Tendering” system.

The IFA (clause 7.16) required applicants to be able to commence provision of the relevant services on 1 October 2010 and said that it would “seek verification” of this 8 weeks before that date. In clause 7.25 to 7.29 the IFA made reference to the Immigration and Asylum Accreditation Scheme (“IAAS”) run by the Law Society and recalled that this was a compulsory scheme for individuals performing publicly funded work. It specified that all relevant caseworkers had to be accredited to IAAS and that certain ratios of immigration supervisors and of level 2 or 3 caseworkers to other caseworkers had to be maintained. The terms of the IFA as regards availability in a bidder’s organisation of suitably accredited caseworkers are at the heart of this application on Ground 1 and 2 (as summarised).

In tables set out in Section 8 the IFA identified the available NMS in each Procurement Area and Access Point. Section 9 set out, “How to respond to an ITT” (viz. Invitation to Tender). It included the following material passages. Clause 9.1 stated as follows:

“Essential Criteria

You must prepare a single organisational response per ITT and you must warrant that each office from which you intend to deliver Immigration Services meets the Essential Criteria. This will include uploading the Immigration Supervisor Self Declaration Form where you have a Supervisor(s) in post.

Selection Criteria

You must respond to the selection Criteria confirming how each of your Offices meets each of the Selection Criteria in a particular Access Point details provided for each Office will constitute an ‘Individual Bid’). ”

Clause 9.2 went on to say:

“You must confirm on the Tender Information Form and again at the Selection Criteria stage how many Matter Starts you are bidding to deliver from each Office in a particular Access Point.

For each Individual Bid you must bid for at least the minimum Matter Starts stated in the Essential Criteria.

For each Individual Bid you should not bid for more than the maximum Matter Starts available for the Access Point.”

There then followed an important limit on the bid that applicants could submit; it was in these terms: (Footnote: ¹)

“You should not bid for more than the maximum capacity, set at 150 Matter Starts per full time equivalent staff member delivering Immigration Services (full time equivalent equates to at least 35 hours per week).

You do not need to have employed all Caseworkers and Supervisors by the date you submit your response to the ITT but you must have recruited all staff 8 weeks before the contract date.”

Clause 9.22 and 9.33 stated:

“9.22

The information given in Section 4 should relate to the hours and the roles of staff delivering work at that particular Office. For example, if a FTE member of staff will work half their time in one Office and half in another, Applicants should enter their details in the forms for each Office, giving their time as 17.5 hours (half a full FTE week of at least 35 hours) in both cases.”

“9.33

The Selection Criteria apply at individual office level and Applicant Organisations will need to respond as to how each individual Office meets the criteria (the Individual Bid).

Clause 10 included the following relevant provisions. The final “bullet point” in clause 10.7 read as follows:

“We will undertake a verification exercise against all Applicant Organisations awarded Matter Starts 8 weeks before the start of the contract to ensure that information provided in tenders remains current. We will adjust our offer if the actual staffing levels do not correspond with the capacity test.”

Clause 10.11 said this;

“Selection Criteria will be considered against each Individual Bid at Access Point level. This means that Individual Bids in an Access Point from Offices from the same organisation will be considered separately and are in competition with each other. For the avoidance of doubt, Individual scores from individual Offices within the same organisation will not be added together or aggregated.”

The selection criteria and scoring of bids were to be found in tables in Annex B to the IFA. The most important of these for the purposes of the present application is set out on the third page of Annex B. It provided as follows:

“Preference will be given to Applicant Organisations who currently employ at least one case worker who is accredited to IAAS Level 3 (advanced Caseworker) or has received acknowledgement from the Law Society of receipt of an application to become accredited at this level.

Marked out of 5

Points will be awarded to an Individual Bid as follows:

The Applicant Organisation currently employs a Caseworker who is accredited to IAAS Level 3 (5 points)

The Applicant Organisation currently employs a Caseworker who has received acknowledgement from the Law Society of receipt of an application to become accredited at IAAS Level 3 (1 point)

The Applicant Organisation does not employ an IAAS Level 3 accredited caseworker (0 points)”

The claimant points out that there had been no reference in the pre-tender consultation processes to the proposal to introduce Level 3 IAAS accreditation or application for such accreditation as a scoring element in the tender process. It is said that this first emerged when the IFA was published. Miss Amie Henshall the head of the claimant’s immigration department says this in her witness statement about her reaction to the inclusion of this element in the tender conditions:

“6.

When the tender information was released on 30^th November 2009, I was surprised to see that marks were awarded for having a Level 3 caseworker employed and that one mark was awarded for making an application to the Law Society for Level 3 accreditation. Although I was somewhat surprised, my initial reaction was that so few people were accredited at level 3, it would not have a bearing on the outcome of the tender. I knew that no practitioners in South Yorkshire or our procurement area were accredited at Level 3 and I therefore believed that our bid would not be affected by this.

7.

I was also aware that the process for applying for Level 3 accreditation is quite lengthy and time consuming. It is not like other levels of accreditation and an applicant has to submit a detailed portfolio of material showing commitment and experience in this area of law. I was of the view that it would clearly not be possible for an application to be submitted and approved by the Law Society prior to the tender deadline of 28^th January 2010 so I knew there was no way providers could achieve top marks in the tender unless they already had a level 3 caseworker position.

8.

With regard to the point which was awarded for simply making an application, I could not understand why this was being used as a criteria. It seems bizarre as it was clearly not a way to demonstrate quality provision of service. I believed that all providers would view this criteria in the same was [sic: “way”] as I did – irrational and unnecessary. For that reason, I made the decision not to apply for Level 3 at that time.

9.

I had no idea that larger organisations would be able to rely on having a Level 3 caseworker employed in any office in the country to improve their bid in our area. Had I known that, it would have been obvious that this would affect our bid. It was not possible to rely on having a Supervisor employed in a different office, many miles from the office tendering for the work in our region, therefore I would never have imagined that the position with Level 3 caseworkers would be any different. The information in the Tender Information Form certainly seemed to suggest that each individual office would be judged separately.”

Accordingly, while Miss Henshall applied for Level 3 accreditation on 26 July 2010 and received it on 1 November 2010, she did not make that application prior to the close of tender on 28 January 2010, and it could not therefore be taken into account in assessing the claimant’s bid. The claimant, therefore, did not qualify for the single extra tender point that an application would have attracted.

Contrary to Miss Henshall’s expectation, however, three applicants for contracts in the South Yorkshire Access Point did make an application for Level 3 accreditation and received the appropriate acknowledgement to enable them to include that fact in their bids and thereby secure one tender point. These three organisations obtained 54 points in total in the tender assessments, including the one additional point for the Level 3 application. The claimant scored 53 points. The result was that the claimant’s three rivals obtained allocation of their full NMS bids whereas the claimant received a much scaled down allocation. It appears further from the evidence that two of the organisations that achieved 54 points did not have a Level 3 accredited caseworker, or a caseworker who had applied for such accreditation, at their respective offices in South Yorkshire at the time of the tender deadline. It appears, therefore, that their extra point was achieved in each case in respect of a Level 3 accreditation application made in respect of a caseworker within the organisation, but based outside South Yorkshire.

The result of the claimant’s bid was given to it by a letter of 28 June 2010 from the defendant. The claimant submits that general uncertainty arose as to the entire tendering process because of the judicial review challenge made by the Law Society of England and Wales to the defendant’s tendering process in respect of family law work. Judgment in that case was delivered on 30 September 2010 (Law Society of England and Wales v Legal Services Commission [2010] EWHC 2550 (Admin) (“the Law Society Case”).

On 1 October the defendant put back the intended contract start date in respect of Immigration Law Services to 15 November 2010. After judgment had been delivered in the Law Society case, on 13 October 2010 the defendant announced that it intended to proceed with the conclusion of contracts in accordance with the immigration work processes already under way. On 12 November 2010 the present application for review was begun.

In the circumstances, the defendant contends that the claimant’s application is out of time as the decision under challenge was made on 28 June 2010 when the result of the claimant’s bid was communicated to it. The application begun on 12 November 2010 was not commenced “promptly” and, in any event, more than three months after the making of the relevant decision: CPR part 54, rule 54.5. In addition, the defendant submits that the tender criteria about which the claimant now complains were known from the date of publication in November 2009 and that it is from that time that the judicial review time limits should be calculated with regard to the claims based upon those criteria.

The Grounds of Challenge in more detail

(a) It is argued that organisations that did not already employ a Level 3 caseworker at the time the tender process started could never achieve maximum points and were therefore under a disadvantage from the start and it was impossible, even for potentially qualified individuals, to obtain that accreditation within the time frame of the tender process. Further, (b) it is submitted that it was irrational to award one point in the tender scoring simply for submitting an application for Level 3 accreditation. Finally, (c) it is argued that it could never have been anticipated that the award of that one point would have such a significant impact on the outcome in South Yorkshire, to the extent that it resulted in the single point giving to two applicants over 75% of the available NMS when neither employed the relevant applicant for Level 3 accreditation in a South Yorkshire area office.

The claimant submits that the allocation of the single point for Level 3 application on the basis of any caseworker within a bidder’s organisation, rather than within the office the subject of the bid, was contrary to the policy identified in the IFA in the passages cited above.

It is argued that the defendant failed adequately to “verify” the compliance by successful applicants with the “capacity test” in relation to the number of staff in post, in the ratios in respect of supervisors and Level 2 to Level 1 caseworkers, in accordance with the NMS for which bids had been made and NMS allocated.

Discussion

I will take each ground of application in turn and, in doing so, will address the arguments of delay that have been raised by the defendant. The issue of delay is not the same in each ground. Mr Hussain accepts that the challenge on grounds 1 (a) and (b) were brought out of time, but he submits that in the circumstances of the case, time should be extended. He does not accept that the claim is out of time in respect of grounds 1(c), 2 or 3.

Looking first at the merits of ground 1 (a), I do not accept that awarding points for an accreditation at Level 3 was unfair, arbitrary or unlawful. The actual achievement of Level 3 was obviously a matter for which the defendant was entitled to give credit. It seems to me that any person wishing to procure the supply of services is entitled to set quality criteria and to treat as less worthy any bidder who does not meet those criteria, even if those who would like to bid may not have the opportunity to qualify within the time frame of the tender process. Obviously, for example, it would be impossible for a person to complain that legal aid contract bidders should be required to have some legal qualifications at certain levels; it could not be said to be unfair that someone wholly without such qualifications could not obtain them in the tender period. It is not objectionable as such to require qualification at a particular level. Competitive tender processes assume that some candidates will be better qualified than others and will therefore attain higher scores. There is nothing inherently wrong with that. Nor is there anything wrong that a large number of persons cannot obtain the relevant qualifications within a tender period.

In my judgment, therefore, the absence of a “level playing field”, challenged at the beginning of the skeleton argument for the claimant, goes nowhere. I can see no reason why the defendant should not say it wanted, if it could get it, applicants who had achieved a Level 3 accreditation and to give more credit in a bidding process to those who had reached that level than to those who had not.

Equally, while one can see that the mere submission of an application for Level 3 accreditation might afford little substantive guidance as to the quality of service that a bidder might be able to offer. It may be that for that reason this criteria has been dropped for the later tender in Kent and Plymouth. I cannot see that it was irrational for the defendant to adopt this particular selection criterion. It is explained (rationally) in paragraph 14 of the first witness statement of Miss Melena Ward, the defendant’s project manager. There Miss Ward says that the choice of this criterion was made as indicating a sign of commitment within an organisation to driving up standards within this category of legal services provisions.

The criterion, if satisfied, resulted in the modest award of only one point. It was not possible to anticipate how this particular criterion would inter-relate in the various applications received with other selection criteria specified in Annex B to the IFA. It cannot, I think, be said that it was wholly irrational for the defendant to afford some slight weight to an applicant who had had the initiative to put together an application for Level 3 accreditation over and above those who had neither a Level 3 accreditation nor any visible likelihood of acquiring one at the tender date. The making of the application was not going to afford, on its own, strong support for a bid, but there could be no objection to it providing some support to the extent of one point out of (what I calculate) was a possible 61 points.

Looking at ground 1 (c), it is true that in relation to this Access Point, on the facts, the achievement of the additional point appears to have had a significant effect on the outcome, but, in my view, that does not show that the adoption of the criterion for the award of the additional point was unfair, arbitrary or irrational. It was not for the defendant to make an assessment in advance of how close competitions in any individual areas would be and what the impact of a single point achieved for an individual selection criterion was likely to be.

The point also taken by the claimant is that it could not have anticipated the impact that the Level 3 criterion in fact would have on the outcome. That may be true. I accept Miss Scolding’s submission, however, that the claimant should have been able to anticipate that it might be wise to take the precaution of securing every point possible in the process. It was well within the claimant’s grasp to take the short step, taken by the more successful bidders, of making the application suggested by the selection criteria. Further, it cannot be said that this criterion of itself would enable an otherwise unmeritorious applicant to prevail over an applicant of significantly more merit. The outcome in this case was that the three most successful bidders achieved in other respects total points similar to those achieved by the claimant.

On ground 1 as a whole, it is quite clear that the claim is substantially out of time. The Level 3 selection criterion was known to the claimant at the latest when it was published on 28 or 30 November 2009. I consider that Miss Scolding is right to say that the effect of this, in ruling out a claim by the claimant at this late stage, is effectively determined by the two decisions of Burnett J in Allen Rutherford LLP Solicitors v The Legal Services Commission [2010] EWHC 3068 (Admin) and Hereward & Foster LLP & anor. v The Legal Services Commission [2010] EWHC 3370 (Admin). In my judgment, and with respect, I consider that the reasoning of Burnett J set out in paragraphs 40 to 57 of the Rutherford case, quoted by him again in paragraph 56 of the Hereward & Foster case, applies equally to the present matter and it is not necessary to quote those passages again. The features of the present tender process challenged in ground 1 (a) and (b), and the potential consequences of not applying for the stipulated Level 3 accreditation, could be readily seen on publication of the tender, or at least by the time the claimant had carefully read the IFA for the purposes of submitting its own bid by the closing date of 28 January 2010.

As in the cases before Burnett J, I can see no good reason for granting the extension of time sought. Certainly, as the two earlier cases (and the cases cited by Burnett J) demonstrate, it is not open to a bidder in a tender, conscious of potential defects in the tendering procedures, to wait and see whether, notwithstanding those defects, he achieves success with his bid. In Jobsin Co. UK Plc v Department of Health [2002] 1 CMLR 44, Dyson LJ (as he then was) described as a “startling proposition” the idea that a bidder knowing of a defect could stay his hand for fear of jeopardising his chances of securing the desired contract: see the passage quoted by Burnett J in Rutherford’s case and see also paragraph 62 of the judgment in the Hereward & Foster case.

The claimant submits that it was entitled to hold its hand in view of the well publicised challenge to the family work tender process that was under way n the Law Society case and what it saw as the possibility of the collapse of the tender scheme as a whole. I do not think that that case could afford justification for not even beginning the process of challenge, even if discussions of a stay of proceedings might have ensued thereafter. Further, the challenge in the Law Society’s action was to the outcome of the tender process across the country. It was not a challenge by one bidder to an individual selection criterion in a different tender competition.

I agree also with the submission by Miss Scolding that, even if one ignores the public knowledge of the tender criteria in November 2009, the relevant decision in the claimant’s case was taken on 28 June 2010 and still the application was not launched until nearly 5 months after the decision had been communicated. I do not consider that the fact that the overall effect of the use of the Level 3 criterion in this particular bid (ground 1 (c)) was not known until a later date can mean that an extension of time should be given to a challenge to the rationality and fairness of that criterion. It seems to me that ground 1(c) is in truth merely an illustration of what the claimant seeks to prove by its primary challenge to the criterion itself; it does not afford a separate free standing ground.

I turn now to ground 2. Here it is submitted that the decision to award points in respect of Level 3 accreditation, or a single point for an application for that accreditation on the basis of caseworkers in an organisation as a whole, broke the defendant’s own policy to award contracts on the basis of individual offices within an Access Point. Reliance is placed on the passages in the IFA quoted above.

In my judgment, this breach of policy is not established. While the defendant may have directed that bids had to be made in respect of individual offices that did not mean that every selection criterion had to be focussed on that individual office alone as opposed to the organisation as a whole. There were other criteria which were also directed at the organisation rather than the office, for example the criteria directed to the number of immigration matters which the organisation had handled since December 2008 (appearing on the second page of Annex B) and the availability in an organisation of an “authorised litigator” (appearing on the fourth page of the Annex). I cannot see how such criteria undermine the overall policy to solicit bids in respect of individual offices. It cannot be sensibly argued that they constitute a policy breach at all.

Again, the same arguments on delay apply. It was clear from the outset in November 2009 that the defendant intended to award the points in respect of Level 3 accreditation on an “organisation” basis. A challenge in November 2010 is far too late.

Finally, I turn to ground 3 – verification. This is the ground amplified in paragraphs 25 a-q of the amended Grounds of Claim. The claimant complains that on enquiries made of the Office of the Immigration Services Commissioner and the Law Society in January 2011 there emerged grounds for thinking that one of the bidders who received the maximum allocation of NMS in accordance with its bid does not in fact satisfy the defendant’s capacity test of the number of caseworkers employed and the tender limit of 150 NMS per full time caseworker. It is argued that this bidder received an allocation equating to 15.6 caseworkers employed whereas the information obtained suggests that as at January 2011 it only had 10 caseworkers; and, moreover, the relevant ratios of level 1 to level 2 caseworkers might not be being met.

The requirement in the IFA of a verification exercise 8 weeks before the contract start date has already been quoted. What the defendant did on 20 August 2010 was to send out letters to successful bidders requiring them to confirm that their organisations would be ready to deliver the services awarded on 14 October 2010, the then anticipated start date. Such letters were responded to affirmatively in each case, including by the claimant. The claimant’s response was in these terms:

“We confirm that Parker Rhodes Hickmotts Solicitors are ready to deliver the services awarded from 14 October 2010.”

It was not suggested that the verification exercise being undertaken was inadequate. The other responses were in broadly similar terms.

The defendant contends that it was entitled to rely on self-verification under the terms of the IFA. It seems, however, to be suggested by the claimant that more should have been done to seek positive proof of the fact that the relevant caseworkers were in post at the contract date.

What was required is obviously a matter of construction of the IFA document. The passages in that document have been cited above or set out in the grounds of claim but do not go into detail of what verification process is envisaged. Mr Hussain helpfully supplied a dictionary definition of the word verify which was,

“verify …To confirm the truth of; to inquire into the truth of, to authenticate, to fulfil; (Law) to affirm under oath, to append and affidavit to (pleadings)…”.

None of these helps us directly to determine the sense in which the word “verification” is being used in the IFA and to identify what steps are envisaged or, more importantly, prescribed.

It seems to me that the absence of any details as to the verification process envisaged must indicate that it was to be left to the defendant to determine what process was appropriate. The verification was for the purpose of assuring the defendant that those who had received allocations of NMS had the capacity to meet them. It must have been for the defendant to decide what it wanted to do to provide itself with the assurance that it wanted; it was up to the defendant to determine the rigour of the exercise that it wanted to conduct. This part of the process was not for the purpose of providing a check on the bidding processes for the bidders as between themselves but for the protection of the defendant (and the public) in giving confidence that the successful bidders could meet the demands of the contracts awarded.

I consider, therefore, that the defendant was entitled to choose a “self-verification” exercise. It may be that a more rigorous process would be desirable, looked at objectively, but it does not appear to me that the IFA required the defendant to do more than it chose to do.

While the construction of a legal document is a matter of law, I derive some support for my conclusion in this respect from the reaction of the bidders, including the claimant, to the verification process that was being undertaken. None of them protested at the time that some sort of objective verification exercise was required by the terms of the IFA. All provided a self-verification in anodyne terms. This may indicate that none of them saw as necessary at the time the type of verification that the claimant now says should have been carried out.

While the present point does not seem to have been taken in Public Interest Lawyers v Legal Services Commission [2010] EWHC 3277 (Admin) Cranston J held that there was no objection in principle to self-certification: see paragraph 64 of the judgment, where the learned judge took the view that it was legitable in the first instance to rely on statements made by professional persons who are bound by obligations of integrity. In that case, the challenge succeeded because the verification process had not been completed at the time the contracts were entered. There had simply been a failure to comply with the terms of the bidding process which indicated that there had been a breach of the principle of equality between bidders. That flaw did not occur in the present case. All were subjected to the same process which was completed before the contracts were entered.

In addition, I think that Miss Scolding was correct in identifying an additional point of distinction between this case and the Public Interest Lawyers’ case, namely that in the present case there was a competitive tender process. It was the absence of competitive standards generally that led Cranston J in the earlier case to find that equality considerations required a “robust verification of quality standards”: see paragraph 62 of the judgment. Nonetheless, Cranston J considered that a self-certification process was still acceptable. In this case that process was undertaken and all bidders were treated equally.

Finally, while the information produced in January 2011 indicates that the capacity test might not have been satisfied at that date. It is not established that that was indeed the position when the contracts were concluded. Clearly the delay arguments raised by the defendant would not directly defeat this ground of claim. However, for the reasons given I consider that this ground also fails. It is not necessary therefore to deal further with the question whether this ground, introduced by amendment to the claim already brought substantially out of time, ought also to fail on grounds of delay.

In the result, this application must be refused. In human terms, the result is a sad one, as I observed during the hearing. The claimant has only itself to blame for not taking the simple step of putting itself in the position of getting the additional point for a Level 3 accreditation application; it thereby lost out to others who took this simple precaution. Equally, it is to be regretted that a firm obviously well equipped to deliver immigration and asylum law services is not able to work up to its full potential. However, this is a consequence of the structure of the bidding process with which it is not the court’s place to interfere in the absence of illegality. For the reasons given, I do not think that illegality has been established in this case.