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All About Rights Law Practice, R (on the application of) v Legal Services Commission

[2011] EWHC 964 (Admin)

Judgment Approved by the court for handing down

(subject to editorial corrections)

AAR v LSC

Neutral Citation Number: [2011] EWHC 964 (Admin)
Case No: CO/10602/2010
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 14/04/2011

Before :

THE HONOURABLE MR JUSTICE DAVIS

Between :

The Queen on the application of

All About Rights Law Practice

Claimant

- and -

Legal Services Commission

Defendant

Mr Anthony Speaight QC (instructed by All About Rights Law Practice) for the Claimant

Mr Paul Nicholls (instructed by Anthony Lawrence on behalf of the Legal Services Commission) for the Defendant

Hearing dates: 30th March, 31st March and 1st April 2011

Judgment

MR JUSTICE DAVIS :

Introduction

1.

Mr Nadarajah is a solicitor who practises as a sole practitioner, under the name All About Rights Law Practice (“AAR”), from offices in Dartford, Kent. Virtually the entirety of his work has been legal aid work, he specialising solely in the field of mental health. Under the new procedures applied by the Defendant, the Legal Services Commission (“LSC”), he put in a tender for a contract to provide publicly funded legal services in the field of mental health relating to Strategic Area Authorities in the South-East Coast Area. There is no dispute that he in fact fulfilled all the criteria to be awarded such a contract. Further, since the bidding for this particular contract was designated as not being competitive, there is no dispute that if the appropriate Tender Forms were all duly completed and submitted by him before the stipulated deadline of 12 noon on 31st March 2010 he would have secured a contract. The tendering process was to be conducted exclusively by electronic means, under a new process called e-tendering.

2.

In good time before the deadline, Mr Nadarajah downloaded all the applicable forms and set to completing them, with the assistance of his secretary who is well qualified in IT matters. It is not in dispute that all the relevant forms and attachments were then completed by the two of them at his office such that, if duly submitted, they would have resulted in the award of a contract to him.

3.

Unfortunately, there was a disastrous mishap in transmitting the documents, via the e-tendering system, to the LSC. On the 26th March 2010 Mr Nadarajah and his secretary had transmitted, as they understood, all the completed forms. They received automatically generated responses, dated 15:30 and 16:30 on that date, indicating that they had “successfully published” their responses. Mr Nadarajah assumed all was in order. But on the 10th June 2010 he received a letter from the LSC saying that his tender had been rejected because one of the submitted mandatory forms called a Tender Information Form (“TIF”) had in fact been blank.

4.

Mr Nadarajah remonstrated. The LSC maintained its position by letter dated 8th July 2010. These proceedings were commenced on the 8th October 2010.

5.

Initially one major issue was whether in fact the TIF had indeed been submitted as a blank by AAR. AAR’s case was that the completed TIF had indeed been transmitted (along with the other forms) and that it had been some error or flaw at the LSC’s end, or within its own computer system, that had caused the information to be lost or deleted. That has always been disputed by LSC and its systems provider, Bravo Solutions. In the event, in the light of detailed expert evidence since put in, it is now accepted on behalf of AAR that (wholly inadvertently) a blank TIF – rather than the one that had been duly completed within AAR’s offices at the time – had been transmitted by AAR. It is unnecessary, in the circumstances, to explain further how that error occurred.

6.

Nevertheless AAR had maintained at the outset, and pursues, alternative grounds of claim, to the effect that the LSC nevertheless should, after the deadline had expired, have permitted AAR to clarify or supplement its tender by submitting the information contained in the TIF which AAR had always intended to submit. To the original two grounds of formulating its case AAR has (by leave previously granted by me on 3rd February 2011) added a third ground. I will set out these grounds below: but the overall aim of these proceedings, of course, is to seek to quash the decision of the LSC rejecting the tender and declining to allow AAR the opportunity to supplement its tender by supplying the missing information.

7.

The position of the LSC has been and remains that it was under no obligation to permit AAR to submit, after the deadline, the missing information: indeed its case is that it would have been positively open to criticism and potential challenge from other tenderers had it done so.

8.

Permission to bring this claim was granted by Sales J on 21st October 2010. The grant of that permission would in itself connote that this matter is appropriately brought by way of Judicial Review proceedings. Further, on my express query at the earlier hearing of 3rd February 2011, it was confirmed to me that it was accepted that this claim was properly brought by way of Judicial Review proceedings. It is, of course, well known that instances of offers or notices sent (or intended to be sent) but not received feature significantly, as a matter of private law, in text books on, for instance, contract law and land law. But the issues raised in this case – although necessarily having to focus to a considerable extent on the (contractual) terms of the lengthy Invitation to Tender to Deliver Publicly Funded Mental Health Services: Information for Applicants (“the Information for Applicants”) – have been raised not as issues of private law, but as issues of public law. There are some (obiter) remarks of Judge Purle QC, sitting as a High Court Judge, in the broadly analogous case of JR Jones Solicitors v Legal Services Commission [2010] EWHC 3671, at paragraph 73 of his judgment, which suggest that in this context issues such as transparency and proportionality (much debated before me) are not justiciable in public law proceedings. Mr Nicholls on behalf of the LSC made clear that, for the purposes of this present case, he was not seeking to raise such an argument.

9.

The arguments of Mr Speaight QC, on behalf of AAR, and Mr Nicholls, on behalf of the LSC, were conspicuously thorough and able.

Factual Background

10.

The background facts, given the current nature of this dispute, need only little more amplification.

11.

The LSC is a corporation exercising statutory functions and having responsibility for the provision of legal aid in England and Wales. A more detailed description of its functions and responsibilities, if needed, can be found in R (Law Society) v Legal Services Commission [2008] QB 737; [2007] EWCA Civ 1254.

12.

The decision was made to supersede the provision of legal aid through the Unified Contract (Civil) 2007 by granting contracts to those selected through tendering exercises (conducted via computerised means) throughout 2010. A range of different tenders was put in place. One related to mental health contracts. Others related to housing, family and welfare, civil law and so on. It is by now well known, notorious even, that the entire tendering exercise with regard to family law contracts came to grief: see Law Society of England and Wales v Legal Services Commission [2010] EWHC 2550 (Admin) (Divisional Court).

13.

So far as the mental health tender was concerned, this was to be conducted on the basis of the Information for Applicants which naturally had a very close correlation in its terms to Informations for Applicants for other kinds of tenders for legal aid contracts in other legal fields. The tender comprised firstly a Pre-Qualification Questionnaire (“PQQ”) and secondly an Invitation to Tender (“ITT”). The ITT itself included, amongst other things, a TIF, which was described as a “mandatory form”. The PQQ would cover an application for contracts in various fields (for example, where a legal firm practised in a number of publicly funded areas). In fundamentals the questions asked by the PQQ (generally providing for a Yes/No answer) related to the eligibility of a person to be considered for a contract at all. The ITT, and TIF, on the other hand, would seek information relating to the specific kind of legal aid contract for which a tender was being submitted. Thus a firm might well submit one PQQ but a number of ITTs. Amongst the information required to be submitted in the latter was the number of “new matter starts” which a tendering organisation wished to offer to undertake on legal aid in the relevant field. Questions included in the ITT also related to Essential Criteria and Selection Criteria. Selection Criteria, as it happened, had no part to play in this particular tender exercise in which AAR participated, as it was designed not to be competitive. Essential Criteria, however, had to be satisfied to be awarded a contract of the kind for which the tender was being submitted. They were appended, as part of Annex A, to the Information for Applicants.

14.

For the purposes of the tendering process so far as the South East Coast area was concerned (which included Dartford, where AAR was based) the new matter start allocation for 2010/2011 set by the LSC for Strategic Health Authority Care was in total 2410. The minimum new matter start application which could be made by an applicant organisation was 30. (There were separate ITTs, I should add, for Mental Health contracts relating to Strategic Health Authorities and for High Security Hospitals. The latter has no relevance for present purposes, as AAR never intended to bid in that regard).I was told that AAR was the only firm specialising in mental health cases at the time in the Dartford area or its near locality.

15.

The e-tendering system was devised for the LSC by Bravo Solutions. It was made clear in the Information for Applicants that no evaluation of tenders submitted would be made until after expiry of the deadline. As I understand the evidence, the information transmitted to the portal would after that date be transmitted onwards to a “data warehouse” operated under a separate (Microsoft) system operated by the LSC and whereby tenders would then be evaluated for content and compliance with the specified criteria. In addition – and perhaps unusually in a tender context – a right of appeal, in certain circumstances, was available for an unsuccessful application. I will come on later to set out the terms in the Information for Applicants on this.

16.

Contracts granted (with effect from 15th November 2010) were to be for a term of 3 years with the possibility of extension for another 2 years. The implications for a specialist firm such as AAR, whose work consisted entirely of legally aided mental health cases, if it was unsuccessful, are thus obvious.

17.

So far as the TIF (which is an attachment to the ITT) was concerned, there was required to be included, amongst other things, as part of the information, data as to the Procurement Area; matter starts being tendered for; LSC account number; address details of office; ratio of “Full-Time Equivalent” [work-force] to new matter starts tendered for; staff details; and supervisor. The TIF which AAR itself had completed (and had intended to transmit) has been subsequently recovered from its back-up drive. It is fully filled in. Amongst other things, it identifies the new matter starts tendered for as 100; and identified Mr Nadarajah as the supervisor and sole full time equivalent, working 50 hours per week, and in consequence giving a ratio of Full Time equivalent to new matter starts as 1:100. AAR also duly completed a further attachment called “MH Supervisor Form”, as well as fully answering the questions on the PQQ and ITT form.

18.

Mr Nadarajah and his secretary sent off from the Dartford offices the PQQ and the ITT (with all attachments fully completed as they understood it) on the afternoon of 26th March 2010. At 15:30 they received a computer generated acknowledgment stating “you have successfully published your response to … PQQ – Pre-Qualification Questionnaire”. At 16:30 they received a further such response stating “you have successfully published your response to … ITT – Invitation to Tender”. Both acknowledgments referred to means of viewing the details of the e-tendering event and as to how to “review your response” and as to how to “change and republish your response”.

19.

AAR did not review its response, although the evidence before me was to the effect that it could have reviewed on screen the entirety of what it had submitted. Nor did it seek to print out what it had transmitted (although the evidence was that it would have been complex to have printed out the transmitted forms in their entirety). The witness statement of Mr Nadarajah was to the effect that he and his secretary had checked the forms after completing them, had received an acknowledgment that the transmissions had been “successfully published” and had assumed that all was in order.

20.

The tenders were evaluated by the LSC after the deadline (the Information for Applicants had made clear, as I have said, that would not be done before expiry of the deadline). Sometime in early April the incomplete (blank) TIF submitted by AAR was identified. On 10th June 2010 this letter was sent by LSC

RE: Invitation to tender to deliver publicly funded Mental Health Services in Strategic Health Authorities in England and Wales

Further to what is said below your tender for the above services has been rejected because you submitted a blank Tender Information Form (TIF) in response to the Invitation to Tender (ITT).

As part of the process for tendering to deliver Mental Health Services all Applicant Organisations were required to complete a response to the to the [sic] ITT, including a complete TIF, which was a Mandatory Form, through the eTendering System in accordance with paragraph 11.7 of the Information for Applicants (IFA) document. Whilst we received a response from you to the Pre-Qualification Questionnaire (PQQ) and the ITT questions, we have no record of receiving a completed TIF for your organisation prior to the deadline of 12 noon 31 March 2010.

Accordingly, we are unable to take your tender forward and it has been rejected.

Pursuant to paragraph 10.22 of the IFA, there is no right of appeal in these circumstances.”

21.

By e-mail of 25th June 2010, AAR stated that the decision was “disproportionate and unjust in all the circumstances”. The answer was that there were no rights of appeal, under the terms set out in the Information for Applicants. On 28th June 2010 Mr Nadarajah sent a two page letter to the LSC. Amongst other things, he asserted that the “bid process was flawed as it did not have a very clearly defined validation process to ensure that nothing is missing at the receiving end. There should have been an automatic alert to inform bidders of incomplete applications…”. He complained that he had no reason to think anything had been amiss. Mr Nadarajah further stated that he had himself attended an LSC meeting on 4th March 2010 in central London where, he said, speakers had assured attendees that the process was “fail safe” and “automatic alerts would prevent incomplete applications” (this last point, I note, is not repeated in Mr Nadarajah’s witness statement). Other points are made, and it is reiterated that rejection is “disproportionate and unjustified” and that he did not accept denial of an appeal.

22.

The response of 8th July 2010 was to this effect

Tender to Deliver Publicly Funded Mental Health Services

Thank you for your letter dated 28 June 2010

Further to what is said below, I can confirm that the LSC is unable to progress your tender to deliver Mental Health services further.

The information, instructions, rules, conditions of contract award and Terms and Conditions of tender relating to the tendering process to deliver Mental Health services are set out in the Information for Applicants (“IFA”) which was made available to all current and potential providers of these services.

Section 4 IFA makes it clear that a valid tender response consists of the following:

Pre Qualification Questionnaire

Response to ITT – Including the Tender Information Form (“Mandatory Form”)

As specified in section 10.22 of the IFA there is no right of appeal where a valid tender response was not submitted prior to the deadline of 12 noon on 31 March 2010, however, I have reviewed the eTendering records and I am satisfied, as a matter of fact, you did not submit a completed Tender Information Form before the deadline referred to above.

I am, therefore, satisfied that your tender was validly rejected under the rules of the tender process.

I am also satisfied that the LSC has conducted the tender in accordance with the relevant law, and in particular the Public Contracts Regulations 2006, in so far as they concern Part B services contracts. In this context the Commission’s obligations are broadly that it treats economic operators equally and that it acts in a transparent way. I do not accept that the process was flawed as you assert in your letter. In the context of a tender where there is direct competition for a limited number of matter starts, I hope that you will accept that we have to insist on these requirements in fairness to other tenders.

Section 11.11 of the IFA states

“It is the responsibility of the Applicant Organisation to make sure that a tender is fully and accurately completed (including any Mandatory Forms). The LSC is under no obligation to clarify its tender or to obtain missing information or Mandatory Forms.”

Whilst I do have sympathy for your situation having regard to the circumstances set out above I confirm the decision.”

23.

AAR were not alone in the kind of mishap that occurred. Of the thousands of applications submitted throughout the country a number – relatively few - resulted in blank, or incomplete, forms being submitted (by no means necessarily in a mental health context I add). AAR joined forces with other firms similarly aggrieved at the rejection of their tenders, without right of appeal, forming a group (called, after the first named firm, the “Lock and Marlborough Group”). Other firms also sought to intervene in the case brought against the LSC by the Law Society in respect of family law contracts. By way of example one firm likewise (according to the LSC) had submitted a blank TIF – albeit in the context of a bid for a standard civil contract. So had another firm, tendering for a Social Welfare Law and Family Services contract. Others again had submitted an incomplete ITT. All had thus far been rejected.

24.

In the event, many of these firms obtained a reprieve in consequence of the decision of the Divisional Court of 30th September 2010. But that decision did not extend to, amongst others, tenders for mental health contracts. In the event, these proceedings of AAR became linked to proceedings (brought on analogous, but by no means identical, grounds) by Ashford Citizens Advice Bureau and Fenland Citizens Advice Bureau. But those latter two claims have not been pursued, on terms. Thus it is only the case of AAR which came before me for decision.

Legal Framework

25.

I turn then to the legal framework.

26.

It was common ground before me that the process for tender in this case was subject to:

i)

The terms of the Information for Applicants (a document 45 pages in length, excluding Annexes); and

ii)

The Public Contract Regulations 2006, which came into force on 31st January 2006 and since amended.

27.

As to the latter, by virtue of Regulation 47 and Regulation 4 there was imposed upon the LSC, as a contracting authority, an obligation to (a) treat economic operators equally and in a non-discriminatory way and (b) act in a transparent way. Further, as accepted by Mr Nicholls, under Regulation 47A the LSC was under an obligation to comply with any enforceable Community obligation in respect of a contract: which carried with it, he accepted, the principles of proportionality and good administration. It was common ground that, in view of the nature of the tendering process and the value of the contract for which AAR was bidding, AAR was to be regarded, for the purpose of the 2006 Regulations, as an economic operator to whom such obligations were owed.

28.

Although a decision which antedates the actual 2006 Regulations, the case of Commission of the European Communities v CAS Succhi di Frutta SpA [2004] ECR I-8315 helpfully sets out the general approach to be adopted: see, in particular, paragraphs 108-116 of the judgment. Equality of treatment and transparency and the need for tenders to be subject to the same conditions are all emphasised. It is, nevertheless, indicated that any tender which does not comply with the specified conditions “must obviously be rejected”. In Tideland Signal Limited v EC Commission [2002] 3 CMLR 33 it was further explained that where there is an ambiguity in a public procurement tender then principles of good administration and proportionality may require resolution of the ambiguity by seeking clarification: see paragraphs 42 to 44 (it may be added that, on the unusual facts of that case, it would have been little short of outrageous for clarification not to have been so permitted).

29.

I was also referred to three relatively recent domestic authorities relating to a tendering process where the 2006 Regulations applied.

30.

The first was the decision of David Richards J in the case of J B Leadbitter & Co. Ltd. v Devon County Council [2009] EWHC 930, a case brought by way of Part 7 proceedings in the Chancery Division. The context was a tendering process for a large construction project. The background facts, and applicable terms of tender, were very different from the present case. But an analogous feature (comparable to the present case) was that by complete inadvertence Leadbitter failed to submit by the deadline as part of its bid case studies, which the terms of tender had stipulated were to be an integral part of any tender and which it had duly prepared. Devon rejected the bid. The case was primarily argued, inter alia, by reference to the 2006 Regulations and by reference to the general principle of Community Law to act proportionately in relation to the tender.

31.

David Richards J dismissed the claim. He held that the tender was “substantially incomplete” by reason of the omission of the case studies. He held that the terms applicable in that case did not obviate the need to submit a complete tender, nor did they provide a means by which tenderers could supply substantial documents after the deadline so as to complete their tenders (paragraph 44). He then turned to the obligation to act proportionately, and concluded that such obligation applied but also concluded that it was not infringed. He said this at paragraph 56:

“Secondly, a waiver of terms which are stated as applying without exception is a departure from the terms of the procurement process and is therefore an exceptional course. A waiver of such terms carries the very risks of unequal treatment, discrimination and a lack of transparency which the contracting authority is required to avoid. It is to be noted that the Commission's action under review in Tideland Signal involved a failure to exercise an express power under the invitation to tender, not a failure to waive express terms.”

32.

He then went on to say, as Devon had submitted: “… a deadline is a deadline. The ITT could not have been clearer…”. He said this at paragraphs 67 and 68:

“67. As well as the deadline, the other key elements of submitting tenders, such as the requirement for a single submission and the lack of provision for changes to submitted tenders, were clear and well understood by the claimants, as their witnesses' evidence made clear. Fairness to all tenderers, as well as equal treatment and transparency, required that these key features should be observed.

68. There may be circumstances where proportionality will, exceptionally, require the acceptance of the late submission of the whole or significant portions of a tender, most obviously where, as noted by Professor Arrowsmith, it results from fault on the part of the procuring authority. But in general, even if there is discretion to accept late submissions, there is no requirement to do so, particularly where, as here, it results from a fault on the part of the tenderer. In addition to the considerations already mentioned, the particular facts on which the claimant relies to characterise its case as exceptional would require investigation and determination by Devon CC and I do not see that it was required to undertake those tasks. In my judgment, the decision of Devon CC to reject the claimant's tender was well within the margin of discretion given to contracting authorities.”

33.

The approach adopted by David Richards J was approved by the Court of Appeal in Azam & Co. v Legal Services Commission [2010] EWCA Civ 1194. That was a case, brought by way of proceedings in the Chancery Division, where a firm of solicitors had entirely failed to lodge a bid for a legal aid contract for immigration work by the prescribed deadline. The LSC refused an extension. Its entitlement to do so was upheld. Pill LJ, at paragraph 16 of his judgment cited, with approval, comments by Briggs J at first instance (which seem to me very much in point here also) to this effect:

“But that analysis ignores the weighty reasons to be considered in the balance against the grant of a week's extension. First, the immigration tender process had been published expressly on the basis that deadlines were there to be complied with, and that no extensions would be given. Secondly, the grant of an extension to the firm, occasioned by a failure to submit a tender on time which was by no means beyond its control, would run the grave risk of constituting unequal treatment of other tenderers. In particular, it would be likely to be regarded as unfair by tenderers who would have wished for longer time in which to perfect their tenders, but who nonetheless completed them on time and, in reliance on the warning that extensions would not be granted, sought no further time for themselves. Thirdly, it seems to me that the principles of transparency and good administration weigh very heavily in the balance against an applicant for an extension of time who is unable to point to reasons beyond his control by way of justification.”

Pill LJ made further comments to like effect at paragraphs 36 and 37 of his judgment, noting also (at paragraph 38) that to grant an extension “may well affect adversely the position of other tenderers”.

34.

Rimer LJ’s judgment was to like effect. He noted that “despite the ostensibly inflexible provisions in the tender conditions” it was common ground the principles of proportionality would have required the LSC to extend time in any case where strict application of the provision would be disproportionate. Rimer LJ said that what happened there had been the fault of Mr Azam and, whatever the LSC’s thought processes at the time, in terms of outcome its decision was not disproportionate; and there were no exceptional circumstances requiring an extension to be granted. He also said (at paragraph 52):

“The essence of a competition by way of tender such as that in question is to provide all competitors with an equal opportunity to make their case. It is obviously essential to that end that all the competitors should have to work to the same deadline and it will obviously be perceived to be, and in fact be, unfair for the Commission then to change the rules so as to allow those who carelessly failed to meet the deadline to make late bids…”

Sullivan LJ agreed with both judgments.

35.

Finally, in the J R Jones case, Judge Purle QC – in a context where, in effect, an application to the LSC had mistakenly involved checking the wrong option (which was asserted to be an “obvious mistake”) and so resulting in insufficient points to qualify – it was held that the LSC was under no obligation to permit a correction to the tender. Judge Purle entered into a detailed review of the authorities in reaching his conclusion. He pointed out (at paragraphs 66 and 67 of his judgment) the potential difficulties in the way of permitting some mistakes to be corrected post-deadline, without allowing others likewise to be so corrected. He further said at paragraph 69:

“…Here I consider the applicants had an equal opportunity to make good their case for a legal aid contract. They availed themselves of that opportunity, but, through their own error, have not taken full advantage of that opportunity. That is a sadly regrettable outcome, but I do not think the LSC can be criticised for having applied the conditions of the tender. On the contrary, they would have exposed themselves to criticism had they acted otherwise. At all events, their decision to apply the conditions strictly is not manifestly wrong.”

The Information for Applicants

36.

I turn then to the – obviously important – terms of the Information For Applicants itself. It is regrettably necessary to set out a significant number of them.

37.

The Information for Applicants applicable in this case is in 12 sections. Section 1 provides an overview. It explains, among other things, that “a completed tender consists of a response to the PQQ and a response to an ITT (including the Mandatory Form)”. It is made clear that the deadline is 12 noon on 31st March 2010 and that tenders received after the deadline will not be considered. Section 3 counsels applicant organisations to familiarise themselves with the terms of section 11. The planned key dates for the “tender process” are given in section 3.10.

38.

Section 4 relates to Tender Documents (applicants are in terms told: “you MUST read these before submitting your tender”). Those include the PQQ and the ITT. The ITT is itself to include (among other things) the TIF (described, in bold letters, as “Mandatory Form”).

39.

Section 7 (specifically section 7.18) includes reference to the “Essential Criteria” as set out in Annex A.

40.

Section 9 is headed: How to submit a tender (responding to the PQQ and ITTs). It explains that applicant organisations “must submit a compliant tender”, with a single response to the PQQ and a response to each ITT. It is, by section 9.3, made explicit that a completed tender will consist of (1) a PQQ and (2) an ITT, to which responses have been made. Section 9.4 provides as follows:

“The Tender Information Form is the only Mandatory Form, which must be submitted with the applicable ITT in order for a tender to be completed...”

Then in 9.7 the procedure for bidding for matter starts is set out, amongst other things, saying “you must confirm on the [TIF] the number of matter starts that you are tendering to deliver from each Procurement Area…”. Then at section 9.14 are outlined steps that an applicant “must follow” in order to tender. Section 9.15 again states that a tender will consist of responses to the “(1) PQQ and (2) ITT which includes the Mandatory Form (Tender Information Form)…”. In section 9.16 further details are given as to what must be completed on a TIF. This is in effect repeated at section 9.37. Sections 9.22 and following relate to PQQs. This is said at 9.26 and 9.27:

“9.26 Other questions on the PQQ provide an opportunity to set out exceptional circumstances where an Applicant Organisation considers that it cannot meet the requirements but that exceptional circumstances apply which mean that the Applicant Organisation should be considered by us as still meeting the PQQ requirement.

9.27 It is the Applicant Organisation’s responsibility to ensure that it makes full use of this opportunity in order to provide comprehensive details of any exceptional circumstances. We are under no obligation to seek further information or clarify a response – and will not do so where in our opinion this would give an Applicant Organisation an unfair opportunity to improve their response.”

41.

Section 9 concludes in these terms:

“9.55 Responses to ITTs submitted will be treated as sealed bids. This means that the LSC will not open any responses until after the deadline for the tender exercise.

9.56 Applicant Organisations can therefore amend and resubmit their responses to the ITTs up until the closing date for tenders to be submitted.

9.57 Responses will be automatically acknowledged when they are published for the first time. There will be no acknowledgement of resubmitted responses where Applicant Organisations amend and republish their response to an ITT. We will assess the latest published response.”

42.

Pausing there, the language is clearly and repeatedly mandatory. It is made clear what the ITT (including TIF) must include and that they must be completed and submitted. Further information or clarification is (under section 9.27) permitted to be sought by the LSC in respect of making a case for “exceptional circumstances” – but this relates only to answers to the PQQ. Moreover, opportunities to amend an ITT are permitted to be given up to (though not beyond) the deadline. It is made explicit that the LSC will not open any responses until after the deadline. It is also stated that initial responses will be automatically acknowledged.

43.

Section 10 is headed: How will tenders be assessed and Matter Starts awarded? At section 10.20 are included provisions for appeals. In particular, paragraphs 10.20, 10.21 and 10.22 provide as follows:

“10.20 A completed tender will consist of (1) a response to the PQQ and (2) a response to an ITT (including the Mandatory Form) submitted prior to the deadline of 12 noon on 31 March 2010.

10.21 Where a tender (or any part it) is unsuccessful or rejected, the Applicant Organisation will be given written reasons as to why it was unsuccessful or rejected.

10.22 There will be no right of appeal against a decision to reject a tender if it is incomplete or if a tender (or any part of it) is received after 12 noon on 31 March 2010 (or after any deadline set by a request for clarification or further information) or is not received by the LSC at all.”

A right of appeal is given under 10.23 if, among other things, an applicant does not pass the PQQ or the Essential Criteria. It is common ground before me that, in the circumstances, AAR had no right of appeal.

44.

The Information for Applicants must of course be read as a whole but perhaps the key section for present purposes is section 11 (which is at the outset stated to “govern” applicant organisations’ participation in the mental health tendering exercise). Of particular relevance are the following:

“11.2 Submission of a tender which fails to comply with any Terms and Conditions of Tender, User Agreement or other rules, conditions of contract award and instructions shall, without affecting the Applicant Organisation’s liability for non compliance, entitle the LSC to reject a tender, assess the tender as unsuccessful and/or entitle the LSC not to proceed with any decision made to award the Applicant Organisation a Contract or entitle the LSC to terminate the contract pursuant to Clause 25 of the Standard Terms.

11.7 For a tender to be complete, the Applicant Organisation must, prior to the deadline, submit a tender consisting of (1) a response to the PQQ and (2) a response to an ITT (including the Mandatory Form).

11.8 The Applicant Organisation must not amend or alter any document comprising part of the tender after the deadline.

11.9 After the deadline any information or documents submitted in response to a request for clarification or further information (in accordance with paragraph 11.25) will also form part of the Applicant Organisation’s tender.

11.10 In the event of any conflict between the information, answers or documents submitted as part of a tender, the conflict will be resolved by accepting the information, answer or document least favourable to the Applicant Organisation.

11.11 It is the responsibility of Applicant Organisation to make sure that a tender is fully and accurately completed (including any Mandatory Forms). The LSC is under no obligation to contact the Applicant Organisation to clarify its tender or to obtain missing information or Mandatory Forms

11.19 A tender will be rejected if it (or any part of it) is submitted after the deadline nor will the LSC consider (1) requests to submit the tender (or any part of it) after the deadline or (2) requests for an extension of the time or date fixed for the submission of the tender (or any part of it).

11.25 Should the LSC, at any time during the tender process, request the Applicant Organisation to give additional information/clarification the Applicant Organisation should be prepared to provide additional information and/or clarify any aspect of a tender by the deadline set out in the request. The LSC reserve the right to validate any part of the Applicant Organisation’s tender and information subsequently given to it.”

Section 11.25 has loomed particularly large in the arguments advanced by Mr Speaight. Mr Nicholls, for his part, placed considerable focus on sections 11.7, 11.8, 11.9, 11.11 and 11.19.

The Arguments

45.

The issues as deployed before me were these.

46.

Mr Speaight’s submissions were to the following effect, under three overall grounds:

i)

The LSC was obliged, by reason of the obligations of proportionality and good administration derived from the Public Contracts Regulations 2006, to draw to the attention of AAR the omissions in its tender and / or to give it an opportunity to remedy that omission.

ii)

Even if the LSC was not so obliged, then at all events it had a discretion to do so but failed to exercise such discretion at all or did so without taking all relevant factors into account.

iii)

The “policy” of the LSC in dealing with incomplete tenders or in seeking clarification or additional information (as outlined in the witness statement dated 28th January 2011 of Mrs Kerry Wood, Head of Contract Commissioning of the LSC) was irrational or arbitrary or in breach of the applicable principle of equality of treatment.

These grounds were advanced as separate grounds although it was acknowledged that there was some degree of overlap between them.

47.

Mr Nicholls’ response was to dispute all three grounds. He placed considerable emphasis both on the particular terms of the Information for Applicants and on general principles (illustrated by the authorities, both domestic and European) relating to public tendering exercises.

Discussion of Issues

Ground 1

48.

Mr Speaight’s arguments were underpinned by some overall considerations on which he placed reliance and with which I will deal at the outset.

49.

First, he emphasised that AAR was a niche practice, dependent entirely on legal aid work for mental health cases and holding an existing contract for that purpose: and the LSC was in the position of a monopoly supplier of such legal aid. Accordingly, he submitted, “a particularly high duty” was owed to AAR in connection with its attempt to renew its status as a legal aid provider. He cited McInnes v Onslow-Fane [1978] 1WLR 150 and the observations of Lord Brown at paragraph 24 of his judgment in Naidike v Attorney General of Trinidad [2005] IAC 538; [2004] UKPC 49.

50.

In my view, in a context such as the present, that submission cannot be accepted. This was not an application to continue in post: this was an application for the provision of an entirely new contract. Further, it would be wholly contrary to the whole basis of tendering (indeed the principle of equality) if some tenderers were to be accorded some kind of preferred status: that, indeed, would be contrary to the obligation to treat economic operators equally under the 2006 Regulations.

51.

Second, Mr Speaight submitted that the LSC was at fault in the way it responded to the application of AAR: indeed, as part of his first ground, he says the LSC should have drawn AAR’s attention to the omissions in the TIF, on the basis that this was an obvious mishap in transmission.

52.

Having regard to the provisions of the Information for Applicants, this too is a proposition that cannot be maintained. It is made clear (on a number of occasions) in the Information for Applicants, that a compliant tender required provision by the deadline of completed PQQ and completed ITTs (including a completed TIF). It was made explicit, by section 11.11, that the responsibility in this regard rested with the applicant organisation. It was made explicit that the LSC was under no obligation to contact the applicant organisation to obtain missing information or mandatory forms. It was made explicit that the e-tendering process was such that bids were in effect sealed until after expiry of the deadline and would not be assessed before then. Not only are such provisions clear: they are also fair and reasonable as between all would-be tenderers.

53.

Mr Speaight sough to rely on the evidence of Mr Widdows (an IT expert witness called on behalf of AAR). Mr Widdows accepted that the e-tendering system itself did not assess or process attachments or data: but he suggested that the system could have been so designed as to send out alerts in the case of blank attached forms transmitted. Maybe it could have been. It does not follow that it should have been. There can be no private law obligation in this regard. Mr Speaight baldly asserted, however, that an obligation in this regard arose in public law from the “principle of good administration”. Such a principle cannot begin to give rise to such an obligation in this context. It was wholly practical, reasonable, consistent with equality of treatment and in accordance with good administration, to place responsibility for correct transmission of completed forms by the deadline on the applicants: the vast majority of whom, indeed, succeeded in complying. Yet further, the terms permitted amendment and revision up to the deadline. Mr Widdows (a very fair and clear witness, who in fact gave oral evidence before me in addition to his witness statements) accepted that AAR could, by accessing its entry on the portal have reviewed on screen all that it had submitted (indeed it also could have actually printed out, without technical difficulty, its submitted TIF form, as I understood his evidence). Had AAR chosen to do either, by way of check, it would readily have seen that the wrong (blank) TIF form had been transmitted and could have corrected it. Notwithstanding the importance to it of the exercise, it did not do so. Yet further, Mr Widdows accepted that a system of alerts – which he advocated – could not readily deal with forms which had been filled in to some extent but not completely, or with forms transmitted in different format and size.

54.

Nor can the (automated) acknowledgments to the effect that the responses had been “successfully published” convey anything more than an acknowledgment of receipt (as indeed the terms of the Information for Applicants had indicated would be given). It had been made clear that the applications would only be evaluated after the deadline; and to the extent that, in some way, some kind of misleading misrepresentation was sought in Mr Nadarajah’s witness statement to be constructed from such automated response that cannot be right. Mr Speaight, at all events, very fairly disclaimed any kind of misrepresentation or legitimate expectation argument.

55.

Virtually everyone, whether relatively skilled or relatively unskilled, has experience of an IT transmission mishap. It is not pleasant to talk in terms of fault. But – as the authorities show – it is a highly relevant consideration when claims of the present kind are made. In my judgment, the fault that occurred must, regrettably, be attributed entirely to AAR. The LSC was in no way at fault.

56.

As to Mr Speaight’s argument that the LSC was nevertheless under an obligation to give AAR an opportunity to remedy its omission, it must follow that such opportunity (if obliged to be given) could only be given after the expiry of the deadline. But to do so, would self-evidently conflict with the numerous provisions of the Information for Applicants and the obligation to lodge all completed forms prior to the deadline.

57.

Mr Speaight nevertheless placed reliance on section 11.25. He stressed that applied “at any time during the tender process” and connoted that the LSC was empowered – although he necessarily had to accept here not obliged - to seek “additional information / clarification”. He further said that that was consistent with the provisions of section 10.10 (although in my view that wording in that sub-section is to be taken as descriptive, and is contemplating the situation arising in section 9.27 or section 11.25). Mr Speaight further observed that the second sentence of section 11.11, while (as he again necessarily had to accept) expressly placing the LSC under no obligation, at all events was, he said, consistent with the LSC having a power. As to that, my view is that the second sentence of section 11.11 is designed simply to reinforce the first sentence: and it adds nothing to what is contained in section 11.25 itself. But in my view, and setting section 11.25 itself in the context of all the other provisions, the entitlement to seek “additional information / clarification” conferred by section 11.25 itself simply does not, as a matter of interpretation, relate to entirely blank mandatory forms. Further, the present claim is wholly unlike the ambiguity kind of case illustrated by Tideland). In substance here, this is a case of incompleteness and of a valid bid not being lodged within the time-limit.

58.

In this regard, there was also some debate before me as to the relevance of section 9.26 and 9.27 of the Information for Applicants. I accept that that also connotes a power conferred on the LSC to give an applicant organisation chance to provide further information. But that is in terms limited to answers given in response to the PQQ (and if the PQQ is failed an applicant organisation can get no legal aid contracts at all). It has no application in the present case, since AAR filled in its PQQ appropriately. In any event, here too the last sentence of section 9.27 makes clear that there is no obligation in this regard on the LSC, and also makes clear that it will not seek further information or clarification if it gives an applicant an unfair opportunity to improve its response.

59.

The authorities acknowledge the potential difference between the existence of a failure to exercise a power under an invitation to tender and a waiver of express terms: see Leadbitter at paragraph 56. In my view, Mr Speaight’s submission in substance involves the latter rather than the former. But either way as I see it that makes no difference to the proper outcome here, given the circumstances. Besides, the authorities make quite clear that, in a public tendering context where the 2006 Regulations apply, even if the express terms of tender do not confer a discretion to extend time or to permit subsequent clarification, then nevertheless principles of proportionality may in any event so require in a given case if strict application of the terms would lead to a disproportionate result (as in Tideland).

60.

In my clear view, no such circumstances exist here. Regrettably, as I have found, the mistake here was that of AAR and AAR alone. Under the terms of the Information for Applicants, it was obliged to gets its completed forms in before the deadline and failed to do so. There can be no good reason, under the principles of equality of treatment or proportionality, for permitting it to put in a complete TIF – for that is what the additional information would in reality amount to even if some aspects could be gleaned elsewhere from the PQQ or ITT - after the deadline. Indeed to do so would run counter to the whole tender process and would be unjust to other tenderers, bound by the same terms and who had made no such mistake.

61.

As to this last point, Mr Speaight accepted this might be prejudicial to other tenderers; but not, he eloquently submitted, “unfairly” prejudicial. He emphasised that it was pure happenstance that the TIF (which had been prepared in time) had not, as completed, been transmitted in time; that it was common ground that AAR would have been awarded a contract had the complete forms been submitted; and that to knock it out by reason of the mishap would give rise to a “windfall” to the other tenderers for a mental health contract.

62.

I understand the point but in my view it can carry no real weight – essentially just because the tender terms should be equally applied. It surely cannot be said that a tenderer who (say) somehow misread the terms and mistakenly thought the deadline was 5pm (not 12 noon) on 31st March 2010 and only lodged his completed bid at (say) 4pm on that day could be entitled to be considered. It is difficult to see why a partially completed tender, containing a wholly blank form, should get any greater indulgence. Other tenderers, in my view, could legitimately say that they were prejudiced, if such a position were sanctioned, and complain that equal treatment had not been applied. Moreover, there could be consequences adverse to them: if the total available minimum starts available were exceeded by the numbers bid for in the tenders, then successful tenders would need to be scaled down. In fact, Mr Nicholls told me that, in the present case, the total available had indeed been exceeded: to add in “late-comers” would thus only increase the scaling-down. This point cannot be undermined by reason of the fact that AAR had put in part of its bid in time and also only had tendered for relatively few matter starts. As Mr Nicholls submitted, and I agree, there in fact could be wider ramifications, if the plea of AAR was acceded to, with regard to other alleged “obvious mishap” cases (and I add that it may not always be easy to assess what is, or is not, an “obvious mishap”). There was also force in Mr Nicholls’ blunt submission that, to accede to AAR’s request, would in truth amount to a “windfall” for AAR.

63.

Accordingly, in my view there is no requirement of proportionality or equality which would justify the TIF being completed and accepted (or the information it was designed to contain being admitted) after the deadline and there is nothing which obliged the LSC to accept the necessary information submitted after the deadline. The TIF was, and was in effect stipulated to be, a key feature of the process here: and, to adopt the words of David Richards J, fairness to all tenderers, as well as equal treatment and transparency, required that the key features be observed.

64.

I also can see no overarching exceptionality in this case to justify such a result – whether in terms of overriding the express terms of the Information for Applicants or (if available at all, which I doubt) in requiring the LSC to exercise such discretion as it had under the terms to admit this information by way of clarification or additional information. While I accept, of course, that each case has to be considered on its own circumstances, I in fact think that any other conclusion would go against the approach consistently adopted by the courts: as, for example, the cases of Leadbitter, Azam and J R Jones illustrate.

Ground 2

65.

I can deal with this point shortly. It has no legal substance.

66.

To the extent that discretion fell to be exercised the LSC gave a detailed response to AAR’s claim for reconsideration by its letter of 8th July 2010. The letter was justified in rejecting the assertion that the tendering process was flawed and was justified in placing reliance on the actual terms of the Information for Applicants and was justified in emphasising the LSC’s obligations as broadly that it treats economic operators equally. Reflecting what I have said above in this judgment, the conclusion to confirm the decision to reject was plainly a rational and proper one: it is perhaps not necessary for the purpose of the argument under this head to say “the” proper one – although in truth, following what I have said above, I do not readily see how any other decision could properly and lawfully have been reached. There was not, at all events, an entire failure to exercise discretion nor was there an undue fettering of the discretion, as Mr Speaight sought so say. On the contrary, it would have been extraordinary if all due weight had not been given to the actual terms of the Information for Applicants, given that there was the position of other economic operators to consider.

67.

The letter, I might add, may not have expressly included reference to proportionality. But it did reject all the complaints of AAR which (by its letter of 28th June 2010 under reply) had, among other things, expressly asserted that rejection would be disproportionate. Moreover, as Rimer LJ indicated in Azam, it is appropriate in such circumstances to have regard to the actual outcome – and the outcome here was plainly proportionate.

Ground 3

68.

Mr Speaight’s final ground was to say that the LSC’s policy in dealing with “late information” cases was irrational or disproportionate or arbitrary: and thereby, to the extent that such policy was – or, indeed, was not - applied to AAR, the resulting decision to maintain the rejection was itself flawed.

69.

It should be explained that there is no internal or published document setting out any “policy” as such on the part of the LSC. Mr Speaight’s point is based solely on the witness statement of Mrs Wood of 28th January 2011, itself put in to answer certain factual points or assumptions made by Mr Widdows in a previous witness statement. I am not all sure that what Mrs Wood there says should be said to constitute a “policy”, as such – but what she does set out there is to be taken as representing the approach the LSC adopted in cases where tenderers had been permitted to provide (after the deadline) clarification or additional information: and, that being so, I agree that tenderers are entitled to expect that approach to be applied consistently and fairly, so as to connote equality of treatment.

70.

In her witness statement, Mrs Wood stated that “clarification” was sought from applicant organisations, “in circumstances where the information provided in an applicant’s tender was ambiguous and meant that the tender was not capable of being assessed”. She stated in terms that that was “distinct from a scenario where a provider had failed to provide information, as in [AAR’s] case”.

71.

She stated in paragraph 7 that specific instances in which clarification of information contained in an ITT was sought included:

“-Where staff were named by multiple organisations. (I give an example of this at paragraph 10 below.)

-Where the volume of matter starts tendered for did not meet the minimum matter start size that providers had indicated they would meet in response to the Essential Criteria. If a bidder provided information about staffing which showed that they could undertake the minimum required number of matter starts and if they stated that they could meet that minimum but then in fact tendered for less than the minimum, we have sought to clarify. The basis for this was an internal contradiction in the information provided. The bidder had provided all the information necessary to show that they could carry out the minimum number of new matter starts but their bid was for less than that minimum. The LSC then sought to resolve that contradiction. This did not allow the bidder to supply and additional information; the LSC would only seek clarification when the information supplied led to the contradiction. Also no clarification was sought when the information supplied made it plain that the bidder could not undertake the required minimum number of matter starts (as was the case with Ashford CAB). The LSC would not permit bidders to supplement the information they had given.

-When an incomplete postcode was provided. The postcode had been provided but we need the full postcode in order to work out where a provider is based. This would not allow the bidder to alter its bid.

-Where attachments were received in a corrupted format that could not be opened.”

She amplified the last point by saying that that connoted a technical issue connoting no error on the applicant’s part and evidence was required by the LSC that the document had not been produced after close of the deadline (she contrasted this with AAR, where there was no such corruption). Mrs Wood went on to say: “In no clarification did we allow applicants to improve information previously submitted…the LSC never seeks clarification in circumstances which could confer such a benefit”. She went on further to emphasise that in no instance did the LSC seek clarification where no response whatsoever was provided to a question.

72.

By reference to the various illustrations Mrs Wood gave Mr Speaight sought to say that her conclusions could not be supported. But in my view they can be and a rational and consistent approach is revealed, which also accords with the principle of equality of treatment.

73.

As to the first example set out in paragraph 7 that is fully explained in Mrs Wood’s evidence. It covers a situation where staff members of the same name had been given in separate tenders. As Mrs Wood notes, the tender on its face could lead to the award of a contract: the clarification was sought to check the (prima facie ambiguous) fact in order to assess whether it should not be rejected. It thus confers no benefit, or opportunity of improvement of the bid, on the applicant.

74.

The second example speaks for itself. It clearly is a matter of ambiguity, justifying a request for clarification. This is not permitting an improvement of a bid: indeed it is noticeable that no such clarification was sought when the information supplied (whether mistakenly or not) indicated that the requisite minimum number of new matter starts could not be fulfilled.

75.

To require details of an incomplete postcode (and whilst the Information for Applicants requires details of the office address inclusion of a postcode is not in terms stipulated) is essentially for the convenience of the LSC – it connotes no improvement to or alteration of the bid.

76.

Mr Speaight queried the last example (attachments received in corrupted format). But in my view the rationale for this as further provided in Mrs Wood’s statement is wholly explicable: it is quite different from the situation applicable to AAR, and other applicants, who through their own error had failed to transmit completed forms in time.

77.

Of course, overall Mr Speaight was not really concerned to say that this further information or clarification in these situations should not have been permitted. On the contrary, he said it was justifiable. His point was that if it were permitted in these (illustrative) cases then it should have been permitted, as a matter of consistency and equality of treatment, in AAR’s case also. But demonstrably, as it seems to me, the examples given by Mrs Wood are of a type wholly different from the case of AAR. Indeed to have permitted AAR to put in the information required in the TIF after the deadline would have been flatly contrary to the LSC’s general approach as specified in Mrs Wood’s statement.

78.

Mr Speaight also sought to establish inconsistency and inequality of approach with regard to the example of two applicants, Lock and Marlborough and Abney Garsden, given in Mrs Wood’s statement. Both cases related to PQQs (not ITTs or TIFs): although, as Mr Speaight rightly said, a PQQ is itself an essential part of a tender. Mrs Wood made the point that failing the PQQ would mean that no tenders for any kind of legal work could be considered. She said: “Because of the severe consequences of failing the PQQ the LSC has taken a slightly different approach to questions which cause a person to fail. However we have continued to apply the principle that where no response to a question was provided no clarification was sought”. Mr Speaight makes the point, with some prima facie force, that there were also severe consequences of failing an ITT for any applicant: and particularly one such as AAR where the tender related to its entire area of practice.

79.

However, on consideration, I see no inconsistency or unreasonableness here. As Mrs Wood goes on further to explain, Lock and Marlborough had in its answers to the PQQ question concerned given (as was later said, entirely erroneously) an answer which indicated that it had not fully discharged its NIC obligations. But this was precisely a scenario, under section 9.26 and 9.27 – which operated with regard to all applicant organisations – where clarification as to exceptional circumstances could be sought. The LSC was entitled to seek further information or clarification in such circumstances and was entitled to conclude that no unfair opportunity to improve the response was given. The position with regard to Abney Garsden was similar – an answer given to a question in the PQQ, which tended to indicate that it had not fully discharged its VAT liability. Again, under section 9.26 and 9.27, the LSC could properly seek clarification. Neither of these instances (which in any event relate solely to PQQs) are comparable to the case of AAR or any other case where, quite simply, blank or incomplete mandatory forms had been provided by the expiry of the deadline.

80.

Overall, I do not think any of the points sought to be made by Mr Speaight, by reference to Mrs Wood’s statement, show an inequality of treatment towards applicants or indicate an approach outside the terms of the Information for Applicants or the 2006 Regulations. Nor do I think that the approach adopted by the LSC can be described as irrational or disproportionate or arbitrary: let alone one that should mandate reconsideration of the rejection of AAR’s tender. I therefore reject this third ground also.

Conclusion

81.

My ultimate conclusion – and really I have to say my clear conclusion – is that this claim fails. Many notions or principles have been referred to in argument before me: proportionality, equality of treatment, transparency, good administration, reasonableness, arbitrariness and so on. Perhaps these can all be subsumed under the notion of fairness (in the public law sense). Overall, I do not think that the rejection of AAR’s tender was unfair.

82.

It is impossible, nevertheless, not to feel real sympathy for Mr Nadarajah arising out of the most unfortunate error that occurred. I am well aware that failure to obtain a legal aid contract in his sole area of practice probably will mean that, for him, legal practice as AAR ceases to be viable. But there are wider considerations to be borne in mind; and the due process of tendering, and the position of other tenderers who are entitled to expect equal and transparent treatment, has to be respected. To permit this case to succeed would, in my view, set a bad legal precedent, would be out of line with the approach indicated in other court decisions and cannot be justified on the particular facts of this case. So I must dismiss the claim.

83.

I am aware that a number of variations and nuances to the very careful arguments addressed to me have not specifically been alluded to in this judgment. I have, all the same, endeavoured to keep them in mind, and I have sought to cover the essential points raised. This judgment is quite long enough as it is.

All About Rights Law Practice, R (on the application of) v Legal Services Commission

[2011] EWHC 964 (Admin)

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