Royal Courts of Justice
Strand, London, WC2A 2LL
Before :
MR JUSTICE BRIGGS
Between :
AZAM & CO | Claimant |
- and - | |
LEGAL SERVICES COMMISSION | Defendant |
Mr Abdurahman Jafar (instructed by Azam & Co Solicitors, First Floor, 6 Minories, London EC3N 1BJ) for the Claimant
Mr Paul Nicholls (instructed by the Legal Director,Legal Services Commission, 4 Abbey Orchard Street, London SW1P 2BS) for the Defendant
Hearing dates: 20th – 23rd April 2010
Judgment
Mr Justice Briggs:
INTRODUCTION
This is a claim by Azam & Co, a firm of solicitors, for relief under Regulation 47 of the Public Contracts Regulations 2006 by reason of alleged breaches of duty by the Legal Services Commission (“the LSC”), the duties in question being the obligations imposed by the Public Contracts Regulations themselves, and by way of enforceable Community obligation, in connection with the LSC’s conduct in 2009 and 2010 of a process for the competitive tender by qualified firms of solicitors for the award of Standard Civil Contracts, specifically for the carrying out of publicly funded work in relation to immigration.
Azam & Co is a firm of which Mr Shafiul Azam is the sole principal. At the time when the 2009/10 tender process was instituted, the firm was an existing supplier of publicly funded immigration services to the LSC pursuant to a Unified (Civil) Contract which will expire on 13th October 2010, and which represents the bulk of the firm’s work. Azam & Co missed the deadline for submitting a tender for immigration work, namely 12 noon on 28th January 2010, and its application on 4th February 2010 for permission to submit its tender out of time was refused by the LSC. If the firm obtains no relief in these proceedings, it will later this year cease to be able to carry out publicly funded immigration work (save possibly in a very restricted field), with financial and professional consequences both for Mr Azam himself, and for his employed staff, which include other solicitors qualified in the same field, which may fairly be described as disastrous.
The firm’s case is, in a nutshell, in two parts. First it claims that its failure to submit a tender before the deadline was itself caused by a failure of the LSC expressly to identify that deadline by any direct communication to the firm, and that this constituted a breach of the LSC’s duties of equal treatment and transparency (imposed by Regulation 4(3)), breach of its enforceable Community obligation to give effect to a legitimate expectation of the firm that it would be directly notified and, more generally, breach of the LSC’s enforceable Community obligation to comply with the principles of good administration.
Secondly, the firm alleges that the LSC’s refusal of an extension of time constituted a breach of the LSC’s enforceable Community obligation to comply with the principle of proportionality, having regard to the serious commercial damage likely to be caused to the firm by a refusal, and the absence of any prejudice which would have been occasioned by the grant of an extension, in particular in the context that the firm’s missing of the deadline was itself the result of the LSC’s fault, rather than its own lack of reasonable care and diligence.
It is common ground that if the firm were to establish any of its allegations of breach of duty against the LSC (together with any necessary causal link between that breach and the firm’s predicament), then the appropriate outcome would be that the firm would be given time to submit its tender late. These proceedings have been directed to be determined urgently so as to ensure that (subject to the outcome of any appeal) the result will be known in time for the LSC to make an appropriate award of publicly funded immigration work to the firm before the progress of the tender process has reached a stage where that would be impossible.
THE EVIDENCE
Mr Abdurahman Jafar for the claimant opened the case on the basis that there was no real issue of primary fact. In my judgment he was correct to do so. Nonetheless, there followed lengthy cross-examination both of Mr Azam himself, by Mr Paul Nicholls who appeared for the LSC, and of Mr Malcolm Bryant, employed as a Senior Legal Adviser by the LSC, by Mr Jafar. Much of the cross-examination, and in particular that of Mr Jafar, consisted of the putting to the opposing party’s witness of propositions of law and analysis in a forlorn attempt to bolster what were really matters of submission. Furthermore, Mr Jafar’s cross-examination was conducted at a level of detail and occasional hostility which I found surprising, in a wholly unsuccessful attempt to discredit the reliability and even the honesty of Mr Bryant’s evidence.
Mr Azam and Mr Bryant had no relevant dealings with each other about which it was even possible for them to provide conflicting testimony and, as will became apparent, the outcome of the case depends in no sense upon my perception of their respective reliability as witnesses. Nonetheless, for the record, I found Mr Azam to be an honest witness, whose assistance to the court was occasionally, and perfectly understandably, impaired from time to time by his distress at the predicament in which he found himself. Mr Bryant was also an honest and generally helpful witness, albeit that on occasion his less than wholly precise choice of words and phrases provided occasional forensic opportunities for a cross-examiner who appeared to be determined to pick a fight with him. Nonetheless, I found the gist of Mr Bryant’s evidence both credible and readily intelligible, once his occasional infelicities of language had been sorted out.
More generally, most of the relevant primary facts were readily ascertainable from the documents before the court.
THE FACTS
The facts concerning the LSC’s conduct of the 2009/10 tender process are fairly self-contained, and those relating to the firm’s lack of response to it are even more so. Nonetheless, since an important aspect of the firm’s case was that the LSC’s prior conduct, extending back in time to 2003, gave rise to a legitimate expectation that the firm would be directly notified of any relevant deadline, it is necessary to set out that background in some detail.
Azam & Co first became a supplier of publicly funded immigration services to the Legal Services Commission on 1st July 2003, pursuant to a ‘licence only contract’ which Mr Azam signed on his firm’s behalf on 13th June of that year. This enabled the firm to carry out public funded immigration work in certain circumstances, but conferred no promise or guarantee of new work, by contrast with the contracts which followed.
Later in June 2003 the firm was, at its own request, placed by the LSC on the ‘Bid Panel for General Civil Contracts from April 2004’, in late October 2003. The firm received an invitation to bid for a General Civil Contract for immigration law by a letter which, in heavy type, specified 2 pm on 19th November 2003 as the deadline for return of the appropriate bid form. On 17th December 2003, the firm received a letter from the LSC headed “Civil Contract Bid Round 2004, Confirmation of Interview re: Competitive Bid in Immigration”, inviting Mr Azam to attend for an interview on 12th January 2004. Although the process was thus described as a competitive bid, it was competitive only in the sense that the firm had to pass a quality assessment, by oral interview and written test, pursuant to a level pre-agreed between the LSC and the Law Society. All applicants who achieved the pass mark were then offered General Civil Contracts, to run from 1st April 2004. Azam & Co passed the test and on 1st February 2004 was so informed, and awarded a General Civil contract with specified numbers of New Matter Starts under ‘immigration asylum and ‘immigration non-asylum’ categories. Either then or later in February the firm was sent a General Civil Contract for signature and warned, again in heavy type, that it had to be signed and returned by 12 noon on 20th March 2004, a deadline with which the firm complied. That contract was expressed to run from 1st April 2004 until 31st March 2007. In each of February 2005 and 2006 the LSC sent the firm replacement schedules specifying further New Matter Starts for the second and third successive years of the contract, in each case specifying a deadline for their return signed by the firm, with which the firm again complied.
On 27th February 2007 the LSC wrote to the firm enclosing what it described as “your new Unified Contract” which was expressed to replace the existing General Civil Contract, upon its expiry on 31st March 2007. The letter required the firm to return the new Unified Contract duly completed and signed by 30th March 2007. By its terms it was to continue in force until 31st March 2010, with an option for extension up to 31st March 2012, at the LSC’s election. Again, the firm duly signed and returned that contract on time, so that it continued seamlessly to be a supplier of publicly funded immigration services for the duration of the Unified Civil Contract. The letter of 27th February 2007 concluded with advice that the LSC was continuing to progress a programme of reforms to the Legal Aid Scheme, and that further consultation on (inter alia) the Immigration category would be posted on the LSC Website.
The firm thus obtained by its Unified Civil Contract in 2007 effectively an automatic renewal of the earlier General Civil Contract, without having to participate in any bidding process or further examination of its competence, competitive or otherwise.
During the same period (2003-2007) the firm also sought and obtained from the LSC successive contracts for the carrying out of publicly funded criminal work. I need not describe them in any detail, or the process by which they were obtained, save to note that, again, the correspondence relating to those contracts emanating from the LSC tended to specify deadlines with which the firm needed to comply, if it was to obtain the contracts in question.
In October 2008 the LSC published on its website a consultation paper entitled “Civil Bid Rounds for 2010 Contracts”. In its Executive Summary it is noted at paragraph 2.5 that the LSC is, pursuant to EU procurement law, required to “procure new contracts through an open and fair process, and to provide opportunities for both new and existing providers to compete for contracts.” At paragraph 2.7 it is noted that:
“In reality, the great majority of providers can expect to obtain renewed contracts if they wish to sign up to the new terms. Of course, there will be competition in some areas, particularly in social welfare law and contracts cannot be guaranteed. However, in devising our proposals we have sought to balance the need for change with the capacity of providers to deliver it and our desire not to disrupt services that are working well.”
Under chapter 6 headed “How we will procure services” it is stated at paragraph 6.7 that:
“Our current plans are for the bids for all new civil contracts to be invited in summer 2009. Applicants will need to submit a valid tender by the deadline for each area they want to work in. All applicants will be assessed against information submitted, whether they are current providers or new applicants. Applicants will be asked to provide information relevant to their bid, which although submitted at the same time, will be assessed in stages. The information required from providers broadly fits into four areas: essential generic criteria, essential civil specific criteria, essential category specific criteria and selection criteria.”
Following receipt of responses to its original consultation paper, the LSC published its own Consultation response under the same heading, in June 2009. In chapter 5, headed “How we will procure services” there is a further reference to the LSC’s obligation to comply with EU procurement legislation and a warning that contracts to those already delivering services could not be guaranteed. At paragraphs 5.6 and 5.7 reference is made under the heading “E-tendering” to the fact that the LSC proposed in the bid rounds for the 2010 contracts to operate an e-tendering system, requiring applications for new contracts only to be accepted through an online facility, accessible via the LSC’s website. In cross-examination, Mr Azam said that while he was generally aware of the consultation process at the time when it was happening, he did not read the whole of the consultation documents published by the LSC, and assumed that, whatever changes were made, his firm would continue to obtain publicly funded immigration work.
The LSC formally published on its website by way of press release its Invitations to Tender for Immigration and Asylum contracts from 2010 on 30th November 2009. The press release identified the closing date for bids as 28th January 2010, referred to the decision that the process would be carried out online and provided a link to the relevant part of its website containing the tender documentation.
Earlier, on 31st July 2009 by another press release the LSC had announced its decision to postpone the tender for the new Civil Legal Aid Contracts until late 2009 or early 2010, stating that:
“A new timetable for the civil contract programme is currently being drawn up and the LSC will keep providers and stakeholders informed of developments. We will also continue to publish our procurement plans, which outline what we want to purchase in each procurement area, during the next couple of weeks. An electronic ‘LSC Update’ will be sent to all providers today.”
The reference in the last sentence to an electronic ‘LSC Update’ was to a free service by then being provided by the LSC, whereby anyone (whether or not an existing provider or even a solicitor) could by submitting a name and an email address, obtain by email press releases and other relevant new information published by the LSC on its website.
Shortly before the formal publication of the Invitation to Tender for the Immigration and Asylum Contracts to which I have already referred, the Law Society published an advertisement in the Law Society’s Gazette referring to the forthcoming Invitation to Tender for Immigration and Asylum work and identifying, in bold type, that the process would open on 30th November 2009 and close at 12 noon on 28th January 2010. Substantially the same information was provided on its website by an entry under “LSC News” and distributed to subscribers to the LSC Update service.
I have already referred to the 2007 Unified Civil Contract as terminating on 31st March 2010 unless extended at the LSC’s election up to 31st March 2012. In July 2009 the LSC published, again on its website, a notice of its intention to extend the Unified Civil Contract for a further six months.
By a standard form letter to all existing providers, including of course Azam & Co, dated 23rd December 2009, the LSC enclosed a formal notice of extension of the Unified Civil Contract until midnight on 13th October 2010. The letter (“the 23rd December 2009 Letter”) forms a central part of the facts relevant to this application, and needs to be quoted in full:
“Dear Sir/Madam
Re: Unified Contract (Civil) – contract extension.
We notified providers in July this year that we intended to extend the Unified Contract (Civil), which is due to expire on 31 March 2010, for a further six months. We have extended that period slightly, to six months and 2 weeks.
Please find enclosed formal notice of extension of your Unified Contract (Civil) under clause 2 of the Contract for Signature. This contract will now end at midnight on 13 October 2010. You do not need to take any action in relation to this extension and can carry on working as usual.
If you wish to undertake publicly funded civil work after 13 October 2010 in any category of law you must submit a tender(s), in response to our Invitations to Tender (ITT) by the applicable ITT deadline. The first ITTs, in relation to the Immigration category of law, were published on 30 November 2009 and 16 December 2009. ITTs for the remaining civil categories of law will be published from February 2010 onwards.
Full information on the tender processes and how to tender can be found on our website at www.legalservices.gov.uk following the path Community Legal Services > Tenders > Civil contracts for 2010.
We look forward to receiving your tender(s) in due course and continuing to work with you in the future.
Yours sincerely
[signed]
Derek Hill
Director, Policy”
At the heart of the firm’s case is the undoubted fact that the 23rd December 2009 Letter did not expressly identify the deadline for submission of tenders, either for immigration and asylum work, or at all. It is impossible now precisely to recreate what would have appeared on the computer screen of someone following the advice in the penultimate paragraph of the letter. Nonetheless, it is reasonably apparent from carrying out that process now, and I so find, that having clicked on ‘Tenders’ as advised, the reader would have seen a timetable which identified the relevant deadlines for those types of work for which the tender process was then open, including the Immigration tender. Furthermore, the same process would, by following appropriate prompts, have placed in front of the reader the whole of the terms and conditions for the Immigration tender, as well as the on-line forms necessary for the submission of a valid bid.
I must now describe Mr Azam’s evidence as to the very limited extent to which the processes of advertisement and communication which I have just set out drew to his attention the fact that an immigration tender process was up-and-running by Christmas 2009. He told me that although he had occasion from time to time to refer to the LSC’s website for information about particular aspects of the publicly funded work then being carried out by his firm, neither he nor anyone else in his firm carried out any systematic monitoring of its contents, whether in its news section or otherwise, and that neither he nor his firm subscribed to the LSC’s Update service.
He said that he had not noticed the July 2009 publication of the LSC’s intention to extend the Unified Civil Contract for a further six months, nor did he or anyone in his firm either monitor the Law Society’s Gazette for publication of matters relevant to his firm’s practice, still less study the advertisement pages where the LSC’s advertisement of the Immigration tender was placed. For those reasons neither he nor anyone in his firm became aware of the launch of the Immigration tender for 2010, prior to receipt of the 23rd December 2009 Letter.
His evidence about that letter was that he had read it, although he declined to say whether or not he read it carefully. He said that he noticed that the immigration tender process was up-and-running, but assumed that, since his firm’s contract was being extended until October 2010, there was no immediate need to do anything about it. He said that he assumed that his firm would receive a further letter from the LSC giving express notice of the relevant deadline, as had been done, he said, in relation to all previous civil and criminal contract renewals, and other matters of importance arising pursuant to existing contracts, such as extensions.
Accordingly, neither he nor his firm did anything at all about responding to the invitation to tender for immigration work until, shortly after the expiry of the deadline, he learned that it had expired, during casual conversation with a professional colleague, on 4th February 2010. He then sought to apply by way of tender out of time, on the same day, but was informed by an employee of the LSC on the telephone that it was too late, and that no extension could be granted.
Although Mr Azam was asked questions about this evidence in cross-examination, he was not seriously challenged as to its accuracy, still less shaken in his recollection. I broadly accept his account, in particular that at no time prior to 4th February 2010 was he, or anyone in his firm, specifically aware of the relevant deadline. I shall have to return to the question whether Mr Azam and his firm’s attitude to such an important matter, as revealed by that evidence, was either diligent or reasonable in the circumstances.
THE LAW
There was little dispute between the parties as to the applicable law. The Public Contracts Regulations were both made and came into force in January 2006 as a means of implementing within the UK the European Directive 2004/18/EC, referred to in the Regulations as the Public Sector Directive. Regulation 4(3) provides that:
“A contracting authority shall (in accordance with Article 2 of the Public Sector Directive)
(a) treat economic operators equally and in a non-discriminatory way; and
(b) act in a transparent way.”
It is common ground that in connection with the 2009/10 Civil Bid Rounds, the LSC is a contracting authority.
The phrase “economic operator” is expressed in Regulation 4(1) to include a services provider. That phrase is defined in Regulation 2 as meaning:
“A person who offers on the market services and
(a) who sought, who seeks or would have wished
(i) to be the person to whom a public services contract is awarded; or
(ii) to participate in a design contest; and
(b) who is a national of and established in a relevant State.”
It is therefore common ground that both Azam & Co and all other firms of solicitors which sought, or which would have wished, to participate in the 2009/10 Civil Bid Rounds are economic operators for the purposes of Regulation 4.
The Regulations are of course to be construed in the light of the meaning and purpose of the Public Sector Directive but, since Regulation 4(3) repeats, almost verbatim, Article 2 of the Directive, the latter adds nothing by way of illumination to the meaning of the former.
Neither the Regulations nor the Public Sector Directive expressly impose duties on contracting authorities other than equal treatment, non-discrimination and transparency but, since the LSC is, in relation to the 2009/10 Civil Bid Round, a public authority performing a function regulated by Community law, it is common ground that it is subject to obligations to act in accordance with the principles of proportionality and good administration, and obliged not to frustrate legitimate expectations. This common ground is well supported by authority. In connection with the conduct of a public procurement process the requirement to act in accordance with the principles of good administration is established by Tideland Signal Ltd v. Commission of the European Communities Case T-211/02 (Court of First Instance) (First Chamber). The obligation to act in accordance with the principle of proportionality in the context of a public procurement process is established by JB Leadbitter & Co Ltd v. Devon County Council [2009] EWHC 930 (Ch), specifically in the context of an extension of time to an economic operator wishing to participate in a tender process after the expiry of the applicable deadline. Counsel could find no authority specifically importing the requirement not to frustrate legitimate expectations into the obligations of a contracting authority carrying out a public procurement process. Nonetheless I am satisfied that the concession (by Mr Nicholls for the LSC) was properly made. As will appear, a difficulty in the present case lies in reconciling an obligation not to frustrate legitimate expectations of a particular economic operator, or class of economic operators, in the context of the express obligation both in the Directive and the Regulations to treat all economic operators equally, in relation to a procurement process.
Regulation 47 provides, so far as is relevant, that:
“(1) The obligation on
(a) a contracting authority to comply with the provisions of these Regulations … and with any enforceable Community obligation in respect of a public contract …
(b) …
is a duty owed to an economic operator.
(6) A breach of the duty owed in accordance with paragraph (1) or (2) is actionable by any economic operator which, in consequence, suffers, risks or risks suffering, loss or damage and those proceedings shall be brought in the High Court.”
Regulation 47(8) to (10) provide the court with wide powers including power to suspend the relevant procurement procedure, to set aside any decision taken in breach of duty, to award damages or to grant an injunction. Those powers are expressed to be without prejudice to its other powers.
Although Mr Jafar on behalf of the firm invoked in his submissions all the duties to which I have just referred, the duties of particular relevance to these proceedings are, in relation to the absence of any express identification of the relevant deadline in a direct communication with the firm, the equal treatment duty and the duty not to frustrate legitimate expectations and, in relation to the refusal to extend the deadline, the duty to act in accordance with the principle of proportionality. In my judgment, and in counsel’s submissions, references to the duties to act transparently and to comply with the principles of good administration added nothing of substance.
For an explanation of the equal treatment duty I was referred by both counsel to Professor Arrowsmith’s Law of Public and Utilities Procurement (2nd edition) 2005, at paragraph 7.7-9 and 7.31, and by Mr Jafar to Commission v. French Republic Case C-225/98, Commission v. CAS Succhi di Frutta SpA Case C-496/99, Commission v. French Republic Case C-16/98 and Commission v. Hellenic Republic Case C-199/07. From those authorities I derive the following propositions. First, the purpose of the equal treatment obligation is to ensure the development of effective competition for public contracts, leading to the selection of the best bid, and therefore generally forbids differential treatment of entities in a comparable competitive position: see Arrowsmith (op cit) at paragraph 7.7. Secondly, this obligation will generally require all potential bidders to be given access to substantially the same information, but it does not absolutely prevent the contracting authority from drawing the tender process to the attention of particular firms, provided that they are not thereby given access to information which is either unavailable to or less readily intelligible by other firms: see again, Arrowsmith (op cit) at paragraph 7.7 and 7.35, and Commission v. France Case C16/98, at paragraphs 103 to 109 of the Judgment.
Thirdly, the objective of the equal treatment obligation is to afford equality of opportunity to all reasonably well-informed and diligent potential tenderers, exercising ordinary care: see Commission v. CAS Succhi di Frutta (supra) at paragraphs 110 to 111 of the Judgment and Commission v. Hellenic Republic (supra) at paragraph 38 of the Judgment. Finally, equal treatment does not necessarily require identical treatment. The objective of affording equality of opportunity may permit, and in some cases require, differences in the mode of advertisement of a tender, provided that the end result is that substantially the same information is made available to all potential tenderers. The equal treatment obligation does not of itself require that every possible tenderer is in fact notified.
As for the obligation not to frustrate legitimate expectations, the Community principle has a significantly different origin from the domestic principle as established by English administrative law, but neither Mr Nicholls nor Mr Jafar suggested that its practical application was materially different, at least for the purposes of this case. It is unnecessary comprehensively to describe this community principle, but the following aspects of it are material to the issues.
First, a legitimate expectation may be founded either upon written or oral statements or representations, or upon a consistent practice on the part of the public body concerned. In either case the statement or practice will give rise to an obligation only if it constitutes a sufficiently precise or specific assurance to the person in question or “an assurance specific enough to create pardonable confusion in the mind of a person acting in good faith and with all the diligence required of a normally informed businessman”: see Lasok and Millett on Judicial Control in the EU: procedures and principles (2004) at paragraphs 617-8. Put more generally, the expectation alleged must, viewed objectively, be reasonable: see Gordon: EC Law in Judicial Review (2007) at paragraph 8.74.
Secondly, an expectation that a public authority will act contrary to EU law cannot be legitimate: see Lasok and Millett (op cit) at paragraph 615. Thirdly, an expectation that a public authority will act in a particular way may be brought to an end by the giving of an appropriate warning to the persons concerned that it intends to change its position: see Lasok and Millett (op cit) at paragraph 614.
Fourthly, where an alleged legitimate expectation is founded on a course of conduct, there must be sufficient repetition of the relevant conduct. Conduct on a single occasion will not, unless it consists of a sufficiently clear statement, trigger the operation of the principle. Finally, the principle may generally be invoked only by a person who has both relied upon the expectation engendered by the relevant statement or conduct of the public authority and suffered a consequential detriment. Nonetheless there may be exceptional cases where a public authority may be held to an express statement of the manner in which it intends to exercise powers affecting the public at large, even by an applicant who cannot show specific reliance: see R v. Secretary of State for Education and Employment ex parte Begbie [2000] 1 WLR 1115 at 1133, per Sedley LJ. There may be some doubt whether this exception to the requirement for reliance is an aspect of the EU principle, rather than merely of domestic law: see for example Gordon (op cit) at paragraph 8.77.
As for the principle of proportionality, both counsel were content to treat the analysis of David Richards J in the Leadbitter case (supra) as a sufficient exposition of the relevant aspects for present purposes, arising as it did in the closely analogous context of the refusal by a public authority of a short extension of time to a tenderer. I will not overburden this judgment by attempting to repeat or condense that analysis in my own words. It is sufficient for present purposes for me to note the following specific points. First, the principle of proportionality is capable of applying to the implementation of the terms of a procurement process. Secondly, it may permit and in certain cases even require the waiver of some term of the process, such as a deadline. Thirdly the question whether to permit a waiver of a deadline, or, which is in this case the same thing, to grant an extension of time, is pre-eminently the exercise of a discretion, in which the public authority is to be afforded a proper scope for the exercise of reasonable judgment. Fourthly, the concurrent obligations of equal treatment, good administration and transparency will often weigh against the exercise of such a discretion by waiver or extension of time, in particular where the publication of the tender includes (as in the present case) a statement that extensions of time will not be granted. Fifthly, although generally it will be appropriate to compare the prejudice which may be caused to the applicant for an extension by a refusal with the prejudice which might be caused by a grant of an extension, a primary consideration will be the question whether the need for an extension has arisen as the result of the applicant’s conduct (whether by act or omission) rather than by something which is either the fault of the public authority, or otherwise a matter entirely outside the applicant’s control.
Finally, whatever may be the position under domestic law, reliance under EU law, and therefore under the Regulations, upon a breach of duty constituted by non-compliance with an enforceable Community obligation, calls for an objective analysis. It is not enough, for example, to show that a public authority has failed to appreciate that it had a discretion to waive or extend a tender deadline, if a decision not to do so is not, or would not be, disproportionate.
ANALYSIS
Absence of Direct Notification to Azam & Co of the Tender Deadline
Mr Jafar cautioned me against adopting an overly segmental approach to his client’s case, submitting that the allegations of breach of the equal treatment obligation and denial of a legitimate expectation were interrelated, and needed therefore to be considered together. I accept that the potential for conflict between the LSC’s different obligations (such as not to defeat the legitimate expectations of a class of economic operator, while nonetheless treating all economic operators equally) requires the court to avoid the excessive use of pigeon holes. The allegations of breach of each of those two obligations by the LSC do nonetheless call for separate and distinct analysis.
I shall take the allegation of denial of legitimate expectation first. In this respect the firm’s case was that both it and all existing suppliers of publicly funded immigration services were, during the 2009/10 tender process entitled to expect that they would each be notified by a direct communication from the LSC of the relevant tender deadline, such that notification by advertisement (whether in the Law Society’s Gazette or on the LSC’s website) was insufficient. That expectation was alleged to have been created not by any specific statement to that effect, but by conduct.
Mr Jafar relied upon three aspects of the LSC’s conduct between 2003 and 2007, in decreasing levels of generality. At the highest level, he submitted that the evidence showed that the LSC invariably provided direct personal written warnings of significant deadlines, not merely for tender processes, but also for contract renewals, contract extensions and even the time limits for the submission of signed contracts, after an existing supplier had been invited to continue its services. Secondly, he pointed to a similar uniformity of direct notification of deadlines in the context of all tender processes, whether for civil or criminal publicly funded work. Thirdly, he relied upon the LSC’s provision of written warnings of deadlines specifically in the prior stages of its dealings with the firm (and by inference all other existing suppliers) in connection with publicly funded civil work, and immigration work in particular.
That expectation was not fulfilled on the claimant’s case, because neither the advertisement in the Gazette nor the press release on the LSC’s website constituted a direct communication of anything to the firm, albeit that they all made express reference to the deadline. Nor was the inclusion of press releases referring to the deadline in the LSC’s Update email service a direct communication to all its existing suppliers, because the firm, among other suppliers, did not subscribe to it. Finally, Mr Jafar submitted that the firm relied on that expectation by doing nothing, in particular after receipt of the 23rd December 2009 Letter, on the assumption that, in good time, it would be sent a further letter specifically identifying the deadline for the Immigration tender.
For the LSC Mr Nicholls relied upon a number of self-standing defences. In the forefront of his submissions (as in the LSC’s responses both in correspondence, pleadings and evidence) was the assertion that, since it would have been wholly impracticable for the LSC to communicate directly with all potential tenderers (i.e. virtually every solicitors firm in the country) a notification of the deadline by direct communication with existing suppliers would offend against its equal treatment obligation, by favouring existing suppliers against aspiring new entrants to the market for publicly funded civil work. In answer to the inevitable question why therefore did the LSC directly communicate specific information about the 2009/10 civil tender process, and the immigration tender in particular, in the standard form 23rd December 2009 Letter sent to all existing suppliers, Mr Nicholls had no persuasive answer, other than that two wrongs do not make a right.
I reject this defence. In my judgment the equal treatment obligation did not prevent the LSC from informing or reminding existing suppliers both of the existence of the 2009/10 tender process, of the Immigration tender in particular, of the electronic website based means whereby its terms and conditions could be identified and of any relevant deadline. All that information was made available by the LSC both to existing and potential suppliers by its two main modes of advertisement, in the Gazette and on its website. It would not therefore have been a breach of its equal treatment obligation to identify the deadline for the Immigration tender by direct communication to existing suppliers, whether in the 23rd December 2009 Letter or otherwise, rather than merely to state (as it did) that the immigration process was open and that it had a deadline which could be ascertained by access to the website.
Mr Nicholls’ second main line of defence was that nothing in the previous conduct of the LSC gave rise to any sufficiently precise or specific expectation. He criticised Mr Jafar’s first two levels of conduct as being too general, and submitted that its conduct in relation to tendering for civil work did not involve sufficient repetition. Furthermore, he submitted that anyone aware of the 2008 consultation process about the proposed new civil bid round ought reasonably to have appreciated that it represented in numerous relevant respects a fresh start by the LSC, about which no reasonable expectations could be entertained to the effect that the procedure which the LSC had adopted for earlier tender processes would be continued.
Analysis of this issue took up a large part of the hearing which, in the event, ran for more than double its original time estimate. In particular, a minute examination was undertaken both in cross-examination and submissions of the real differences in the nature of the competition inherent in the tender process, as between 2003/4 and 2009/10. In short, the earlier process was competitive only in the sense that it required each applicant to achieve a pre-set level of competence in oral and written tests, whereas the later process involved grading qualified applicants, and awarding New Matter Starts to those obtaining the highest marks. By contrast with each of the 2003/4 and 2009/10 processes, the contract renewals which took place in 2007 did not involve any kind of tender at all, but merely the acceptance by a certain date of an offer of a new contract to every existing supplier of the relevant type of work.
I am not persuaded that the differences in the nature of the competitive element of each of the 2003/4 and 2009/10 tender processes are of themselves sufficient to prevent the conduct of the former from giving rise to legitimate expectations as to the procedure to be adopted in the conduct of the latter. They were, very broadly, both competitive tender processes.
Subject to that reservation, I consider that this aspect of the LSC’s defence is made out. My reasons follow. First, it seems to me quite inappropriate to have regard to the way in which the LSC notified its existing suppliers of deadlines generally, for example in the ordinary conduct of its ongoing contractual relations with them, as affording any basis for a legitimate expectation as to the conduct of a tender process. In many respects, the terms of the existing contracts required that relevant matters be notified in writing, such as the extension of the 2007 contract, specifically notified by the enclosure to the 23rd December 2009 Letter to all existing suppliers under that form of contract.
Secondly, I am not on balance persuaded that any legitimate expectations as to how the LSC would conduct a tender process for civil publicly funded work could reasonably be derived from the manner in which it conducted tender processes in relation to criminal funded work, at least not by 2009. The LSC administered the public funding of civil and criminal work in separate compartments, which included widely differing aspects of practice and procedure. In particular, anyone conversant, even at the highest level of generality, with the 2008 consultation process about the forthcoming civil bid round for 2009/10 would reasonably understand that the civil process was being radically overhauled, entirely separately from the criminal process. For this purpose, the particular features of the overhaul are neither here nor there. It is sufficient that the two processes were plainly regarded by the LSC as separate and distinct. A reasonable existing supplier could not, even if it provided both types of publicly funded work to the LSC, draw legitimate expectations from the procedure used in one about the procedure to be used in the future about the other.
That leaves the LSC’s prior conduct of the civil tendering process. For that purpose there was, as Mr Nicholls submitted, no real repetition. The only true tendering process in which the firm was involved prior to 2009/10 was the 2003/4 process. It follows that, although the LSC did indeed notify deadlines by direct communication with every existing supplier, no legitimate expectation could be drawn from that conduct, taken on its own. That analysis leads to the conclusion that there was not, in my judgment, any original basis for the arising of a legitimate expectation of the type contended for by the firm.
In case a higher court were to take a different view on that question, and concluded that a legitimate expectation had been communicated to existing suppliers by the end of the automatic renewal process in 2007, I must address the question whether it was, as Mr Nicholls submitted, nonetheless properly terminated. He relied first upon the 2008 consultation process which, besides introducing a wholly new type of competition, referred in terms to the LSC’s equal treatment obligations and notified that the new process would be by way of e-tendering, rather than traditional correspondence. Neither the consultation paper nor the response paper stated in terms that direct communication of relevant deadlines to existing suppliers would no longer be undertaken.
In my judgment, a student of the detail of those consultation papers would reasonably have appreciated that no reliance could be placed on any aspect of the way in which the LSC had previously notified existing suppliers of the terms (including deadlines) of new tender processes. Nonetheless I am not persuaded that the obligation on a person relying on a legitimate expectation to exercise reasonable care and diligence necessarily required solicitors in the position of the firm to study that consultation process in detail. It follows that, if the consultation process had been the LSC’s only defence to an otherwise established case of legitimate expectation, I would not, on balance, have accepted it.
I have reached the opposite conclusion in relation to Mr Nicholls’ reliance on the terms of the 23rd December 2009 Letter itself. In my judgment no legitimate expectation that the LSC would send a further direct communication to all existing suppliers specifying the deadline for the Immigration tender could have survived in the minds of a reasonably careful and diligent solicitor reading that letter. It stated in unambiguous terms first that any existing supplier wishing to undertake publicly funded civil work after 13th October 2010 in any relevant category of law had to submit a tender by the applicable deadline. It told the reader that the tender process for immigration had already been published, and that full information on the process could be obtained on the LSC’s website, providing the precise path from the home page to the pages containing the relevant information. Finally, and most importantly, the final paragraph of the letter made clear the LSC’s expectation that existing suppliers would submit tenders without any further prompting from the LSC, a statement wholly irreconcilable with any expectation by a reasonable reader that a further letter, specifying the deadline, could be expected in due course. Since the tender process had, as at 23rd December 2009, more than a further month to run, existing suppliers reading and responding to the letter with reasonable diligence had amply sufficient time in which to complete the tender process by the deadline.
Finally, Mr Jafar attempted in his submissions to identify a general public statement that the LSC would directly notify all existing suppliers, in the text of the press release issued on 31st July 2009, stating that the LSC would “keep providers and stakeholders informed of developments… and that “an electronic ‘LSC Update’ will be sent to all providers today”. Although not suggesting that his client read or relied upon that press release, Mr Jafar submitted that it qualified under the exceptional principle to be derived from the Begbie case (supra).
In my judgment that press release contains nothing remotely approaching a clear statement that the LSC would directly inform all existing suppliers of relevant tender deadlines, still less a public statement capable of being enforced after the event, by a person who placed no reliance on it at the time. At the highest, it suggested to readers of LSC press releases and to subscribers to the Update service that they could expect to be kept informed of developments in the tender process by the same processes as had drawn that Press release itself to their attention.
Turning to the alleged breach of the equal treatment obligation, Mr Jafar made two related submissions. The first was that, by specifying the deadline both on its website and in the Law Society’s Gazette advertisement, but failing to do so in the 23rd December 2009 Letter sent to all existing suppliers, the LSC treated readers of the website and the Gazette more favourably than recipients of the 23rd December 2009 Letter. More particularly he submitted that potential suppliers were more likely than existing suppliers to study advertisements for work placed in the Gazette.
I am wholly unpersuaded by that submission. To start with, it makes a false comparison between readers on the one hand of the website and the Gazette and on the other hand, of the 23rd December 2009 Letter. In my judgment the LSC chose a sensible pair of media (one electronic and the other in hard copy) by which to advertise the 2009/10 civil bid process, including the Immigration tender. Mr Bryant said that the LSC had, in addition, notified specialist associations, such as the association specialising in immigration and asylum law. That approach was, plainly in my judgment, compliant with the equal treatment obligation, since it treated existing and prospective suppliers in precisely the same way, and gave both classes an identical and sufficient opportunity to appraise themselves of the civil bid round and of the Immigration tender process in particular. By contrast, the reference to that process in the 23rd December 2009 Letter was little more than a reminder, contained in a letter the primary purpose of which was to exercise a contractual right to extend the existing Unified Civil Contracts.
Furthermore, viewed from the perspective of a reasonably careful and diligent existing supplier, that reminder in the 23rd December 2009 Letter contained all the information reasonably required to enable the recipient to participate in the tender process. It notified that there was an immigration tender up and running, that it had a deadline which need to be complied with, and that the relevant terms and conditions (including by necessary implication the deadline) could be found by a simple process which started with accessing the LSC’s website and following a small number of specified prompts. In my judgment, even the probably very small class of existing suppliers who neither monitored the LSC’s website, subscribed to its Update service or read the advertising of the Law Society’s Gazette could not be said to have been treated unequally or unfairly by receiving a direct notification in the terms of that letter.
By a late amendment made at the beginning of the trial, the claimant firm advanced an additional case of unequal treatment, by reference to the press releases published in the LSC’s Update service. That process, it was submitted, treated unequally and unfairly those existing suppliers who, like the claimant, did not subscribe to that service, by comparison with those who did. Again, this submission seems to me wholly misconceived. The Update service was freely available to any existing supplier which wished to be kept informed by email of relevant matters published on the LSC’s website, rather than to have actively to monitor the website itself. The service was available equally to existing suppliers and to any other persons interested in publications by the LSC including, of course, all potential suppliers. If that had been the only method whereby the LSC published information about its tender process, there might have been something in the point, but the Update service did no more than communicate by email that which anyone monitoring the website could find out for himself in any event. If this submission had been correct, it would lead to the absurd consequence that no public authority carrying out functions regulated by EU law (and thereby subject to the obligation of equal treatment) could offer a free update service to persons interested in keeping themselves informed of its relevant activities, because of the risk that some persons to whom the equal treatment obligation was owed might neither monitor the public authority’s website, nor subscribe to the update service.
The claimant’s case that the absence of any direct communication of the deadline for the immigration tender to existing suppliers constituted an actionable breach of duty under Regulation 47 therefore fails.
REFUSAL TO EXTEND THE DEADLINE
The issues under this part of the case lie within an altogether narrower compass. The firm’s case was that, in refusing to grant a week’s extension to the deadline for the immigration tender, the LSC committed a breach of its obligation to give effect to the principle of proportionality. Mr Jafar submitted that the refusal was disproportionate for three reasons. First he pointed to the disastrous economic consequences which would effect the firm if no extension was granted, and also to the potential disadvantage to the public interest in excluding from the provision of publicly funded immigration services a firm which was both qualified and experienced to provide that service, and which had until then earned the respect of the LSC for the quality of its work. Secondly he pointed to the absence of any significant prejudice to other tenderers, or anyone else, which would be occasioned by a week’s extension. Thirdly he submitted that, by contrast with the Leadbitter case, it was the LSC’s fault rather than that of the firm that it missed the deadline because, regardless of the question whether it thereby committed any breach of obligation, it had been commercially foolish of the LSC to fail specifically to draw the attention of existing suppliers to the relevant deadline.
In my judgment the LSC did not commit a breach of its proportionality obligations, or, therefore, an actionable breach of duty under Regulation 47, by refusing to accede to the firm’s request for an extension of the deadline. My reasons follow.
First and foremost, the reason why the firm missed the deadline was, in my judgment, because of its own lack of due care and diligence, rather than because of any fault on the part of the LSC. Publicly funded immigration work was and remains the bedrock of the firm’s practice, and its seamless continuation was a prerequisite of its continued prosperity, if not indeed of its continued existence. The firm depended for the continuation of that work upon obtaining a further civil contract from the LSC after the expiry of the 2007 Unified Civil Contract, and the most cursory awareness of the consultation paper (which Mr Azam admitted that he had) was sufficient to demonstrate that the process of obtaining a new contract, whenever it occurred, would involve a competitive tender of some kind. Compliance with deadlines are of the essence of any tender process, and the practice of law involves a requirement, in almost every aspect of it, to understand and comply with deadlines.
Even prior to its receipt of the 23rd December 2009 Letter, the firm had in my view demonstrated a lack of reasonable care and diligence in the protection of its own commercial interests in failing either to monitor the LSC website, to subscribe to its Update service or to study the Law Society Gazette with proper care. Upon receipt of that letter it was in my view extraordinarily careless for the firm not to take the simple steps set out in it to appraise itself of the relevant terms and conditions of the vitally important Immigration tender process to which it expressly referred. For the reasons which I have already given, there was no basis upon which a reasonably careful and diligent solicitor, let alone an existing supplier whose business was dependant upon continuing immigration work, could assume that he would receive a further letter from the LSC specifying the deadline. If Mr Azam made that assumption (as I have assumed that, in accordance with his evidence, he did) then it was wholly unreasonable of him to do so. If he did not, then his and his firm’s failure to take the steps recommended in the letter was careless in a high degree.
I acknowledge that a refusal to extend the deadline would visit harsh economic consequences on the firm, and that a week’s extension would not, in the sense of depriving any other applicants of immigration work to which they ought in fairness to be entitled, cause any prejudice of that kind. On the contrary, it appears that publicly funded immigration work could, even now, be made available to the firm were it to succeed in these proceedings, without de-railing the process in any significant respect.
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.
Weighing those considerations in the balance, I consider that it was not a breach of the LSC’s obligation to respect the principle of proportionality for it to refuse the requested extension. It appears that the LSC told Mr Azam at the time that it was unable to grant an extension, rather than that, having considered the matter as one of discretion, it had decided that it ought not to do so. For the reasons which I have given, related to the essentially objective nature of any question as to breach of duty under Regulation 47 (by comparison with the different considerations which might have affected a challenge based upon principles of domestic administrative law) that way of communicating the LSC’s refusal to the firm is of no legal consequence in these proceedings.
CONCLUSION
The result of the above analysis is that the firm’s claim wholly fails. I am compelled to dismiss its claim, but not without considerable sympathy for Mr Azam and his staff. The firm faces the loss of the bulk of its work not as the result of any failure carefully and diligently to protect the interests of its clients, but because of a failure to take proper care in the furtherance and protection of its own interests. It is unfortunately inherent in the principles of EC law sought to be enforced in this case that those principles assist those who act with reasonable care and diligence about their own business affairs, and not otherwise.