Groupm UK Ltd v Cabinet Office

This is an application by the claimant in these public procurement proceedings against the Cabinet Office, the defendant, for an order for early disclosure of specific documents.

I am not going to go into the detailed background given that this is an extempore judgment but, broadly, the Cabinet Office advertised earlier this year for interest in a project for tendering purposes relating to the provision of media planning and buying services. The appropriate contract notice was published in March 2014. The invitation to tender initially went out on 12 March 2014. Tenders were submitted by at least two companies, the claimant and a company group called Carat. The result was that Carat was successful and the claimant was unsuccessful. The tender was to be on the “most economically advantageous” basis although there were, in effect, pre-qualification requirements to be achieved by all those who were permitted to go through to a full tender.

The Cabinet Office retained a company or organisation called Ebiquity, which is an independent commercial organisation, to evaluate the tenders. As the Particulars of Claim suggest (and I make no final legal finding on this) there is a strong suggestion that the Cabinet Office was making it clear that sustainability of pricing was an important factor. It seems clear on the pleaded case, at least, that sustainability of pricing was to be reviewed and provision was made for, at the very least, a discretion to disallow tenders which contained unsustainable pricing. As I say, I make no findings about what the meaning of the ITT (the invitation to tender) actually was. But that is the pleaded case.

Proceedings were issued by the claimant following it being informed that it had not been successful on 12 September 2014 with Particulars of Claim being served a week later. Essentially, apart from a complaint that the defendant’s evaluation of the claimant’s tender submissions made certain wrong conclusions about certain parts of two questions which it is said needed to be answered, the primary complaint and breach of the Public Contract Regulations relied upon is essentially that, whilst the claimant’s rates and prices were, in effect, sustainable, Carat’s rates and prices cannot have been sustainable. The argument that is promoted in the Particulars of Claim relates, broadly, to the pleaded fact that the claimant, it is said, has a much greater market share than Carat and that Carat’s prices and rates could not sustainably be less than the claimant’s.

Given that confidentiality prevails in a public judgment it would be inappropriate for me to refer to what is pleaded in detail but it is clear, and it is pleaded at Paragraph 50 of the Particulars of Claim, that the claimant was provided by the defendant with information about the overall pricing evaluation of the claimant’s tender and Carat’s tender. Both in percentage terms and in overall price score terms figures are given. Those figures have been redacted in the version that has been most available. Those are overall figures and they are not broken down figures, rates and prices and the like.

Before the proceedings were issued the claimant, through its then solicitors, had sought further information. It is said that insufficient information was provided by the Cabinet Office and so proceedings were issued on 15 September 2014. Correspondence, I believe, was exchanged and on 25 September the claimants, through their then solicitors, issued the application which is before the court today for early specific disclosure. That was supported by a witness statement of Peter Crossley. Since that time there have been further exchanges between the parties. I am not going to decide if anyone was to blame for the delays arguably which have happened since then. The defence has not yet been served but I understand that the latest date for the defence to be served is this coming Friday, 17 October, so there is no breach of the rules yet on the part of the defendant in serving its defence. But Mr. West, counsel for the Cabinet Office, has indicated in broad terms what the heads of defence are likely to be. I am told (and have no reason to doubt) that there will be a positive assertion that Carat’s pricing was sustainable and as, and possibly more importantly from the defendant’s standpoint, it will be asserted that in any event Ebiquity, who made the appropriate recommendations, exercised a judgment in their recommendations (later relied upon by the defendant it is said) which contains no manifest error, it being asserted that the test should be in these circumstances there has to be in effect a substantial error and one which is manifest to the defendant and/or arguably the independent agents or sub-contractor it retained to evaluate the tenders. I very much hope that a rather more detailed defence will be given than the brief summary I have set out, but that will be a matter for the defendant.

The Particulars of Claim are, as one would expect from the counsel and solicitors involved, well drafted and reasonably clear as to what the assertions being made actually are. The defendant has issued last week an application under paragraph 47 of the Public Contract Regulations to lift the statutory suspension on the placing of the contract with Carat. This said (although I am told this is the first time the claimant has been aware of this), the Court was informed at the hearing that the Cabinet Office would wish to place the contract at the beginning of the week after next, on or about 27 October 2014. So it has issued its application. The court administration had initially fixed a date for the hearing of20 October (next Monday) but I have re-fixed that for 23 October because I am told that it will only be towards the close of business today that the defendant will serve its evidence in support of its application.

It is unfortunate, therefore, that this application for specific disclosure is made before the grounds for seeking to lift the suspension are spelled out by way of a witness statement and, as importantly, before the defendant has served its defence. The reason that it is unfortunate is that it is unclear at this stage with any precision as to what is going to be in issue in the case. But Mr. West has at least provided the guts of the substantive defence that is likely to be deployed.

During the course of exchanges between the solicitors and relatively recently the Treasury Solicitor, by letter dated 8 October (six days ago) having considered what was being sought on the application for specific disclosure, said this:

“Regarding your client’s application for disclosure, we reiterate that it was made prematurely and without first giving this office the opportunity to consider your requests and to make voluntary disclosure if appropriate.

We have considered your application and the request for specific disclosure in the statement of Peter Crossley. At the date this letter is sent to you, we are still not in receipt of signed confidentiality undertakings on behalf of your client. We therefore remain unable to disclose any documents to you. Once arranged, we intend to serve the following documents into the confidentiality ring:

(i)

The Price Evaluation Sign Off provided to CCS by Ebiquity. This will be redacted for legal advice privilege;

(ii)

Ebiquity Initial Review Spreadsheet. This will be redacted pending the agreement of the parties whose confidential pricing information is contained in the document.

We will also disclose the slides from the presentation given by Ebiquity to all bidders on 21 March 2014. This does not require disclosure into the confidentiality ring as your clients have already seen this and so is attached to this letter.”

The letter goes on to identify that certain documents are not held by the defendant and to challenge various other documents.

The authorities on specific disclosure are now many. Perhaps one of the more recent is Roche Diagnostics Ltd. v. The Mid Yorkshire Hospitals NHS Trust [2013] EWHC 933 (TCC) in which Coulson J set out the principles which should broadly be applied to applications for early specific disclosure in procurements cases. He sets out his views about that at paragraph 20:

“In my view, the following broad principles apply to applications for early specific disclosure in procurement cases:

(a)

An unsuccessful tenderer who wishes to challenge the evaluation process is in a uniquely difficult position. He knows that he has lost, but the reasons for his failure are within the peculiar knowledge of the public authority. In general terms, therefore, and always subject to issues of proportionality and confidentiality, the challenger ought to be provided promptly with the essential information and documentation relating to the evaluation process actually carried out, so that an informed view can be taken of its fairness and legality.

(b)

That this should be the general approach is confirmed by the short time limits imposed by the Regulations on those who wish to challenge the award of public contracts. The start of the relevant period is triggered by the knowledge which the claimant has (or should have) of the potential infringement. As Ramsey J said in Mears Ltd v. Leeds City Council[2011] EWHC 40 (QB), ‘the requirement of knowledge is based on the principle that a tenderer should be in a position to make an informed view as to whether there has been an infringement for which it is appropriate to bring proceedings’.

(c)

However, notwithstanding that general approach, the court must always consider applications for specific disclosure in procurement cases on their individual merits. In particular, a clear distinction may often be made between those cases where a prima facie case has been made out by the claimant (but further information or documentation is required), and those cases where the unsuccessful tenderer is aggrieved at the result but appears to have little or no grounds for disputing it.

(d)

In addition, any request for specific disclosure must be tightly drawn and properly focused. The information/documentation likely to be the subject of a successful application for early specific disclosure in procurement cases is that which demonstrates how the evaluation was actually performed, and therefore why the claiming party lost. Other material, even if caught by the test of standard disclosure, is unlikely to be so fundamental that it should form the subject of a separate and early disclosure exercise.

(e)

Ultimately, applications such as this must be decided by balancing, on the one hand, the claiming party's lack of knowledge of what actually happened (and thus the importance of the prompt provision of all relevant information and documentation relating to that process) with, on the other, the need to guard against such an application being used simply as a fishing exercise, designed to shore up a weak claim, which will put the defendant to needless and unnecessary cost.

I have also been referred to the decision of Vos J (as he then was) in Alstom Transport v Eurostar International Limited [2010] EWHC B32 (Ch). In a detailed judgment he considers what further documents should be provided in that case. He orders, in effect, via paragraph 52 that Eurostar, in that case, were to produce certain templates going on to say this:

“If Eurostar is required to disclose the templates that I have mentioned indicating their scoring process at this early stage, it would have the great benefit that it will enable ALSTOM at the earliest possible stage in the action to plead its case as fully as it possibly can, thereby giving Eurostar and Siemens a clear indication of where this case is going. Indeed it seems to me that this will be to the advantage of Eurostar, because if, as they have always said, the procurement process was indeed transparent, fair and non-discriminatory, that will be demonstrated by the disclosure of the core documents in the action which are the scoring templates which Ms Hannaford now seeks.”

The current case is not directly concerned exactly with scoring templates, but broadly with a comparison, at least, between the Carat pricing and the claimant’s pricing and as considered apparently by Ebiquity.

In another case decided in this court, Pearson Driving Assessments Ltd. v. The Minister for the Cabinet and The Secretary of State for Transport [2013] EWHC 2082 (TCC), this court considered an application for early specific disclosure in the context of a pending section 47(H) application as there would be in the current case with the lifting of the statutory suspension. At paragraph 15 the judgment says this:

“The court, on the application of Section 47 (H), will simply not be in a position to find facts which are controversial or at the very least, which are not supported clearly by uncontroversial, contemporaneous documentation. Therefore, insofar as there is reliance by the defendants on those sorts of facts, those are facts which cannot properly be deployed as grounds for deciding that there is no serious issue to be tried.”

Mr. Bowsher QC and Ms. Blackwood for the claimant have produced a draft order which sets out at paragraphs 1 and 3 the documents which their clients seek in this application, some of which are said not to exist by the defendants and others which are said to exist. But the primary area is paragraph 3. What is sought is:

“The defendant shall:

(i)

disclose:

(a)

a copy of the pricing submissions in the tender submitted by Carat to the defendant in relation to the invitation to tender …

(b)

any notes made by Ebiquity in relation to its audit of the tender submitted by Carat, including memos, emails and handwritten notes ...”

It is said by and on behalf of the defendant that the two documents referred to in the Treasury Solicitor letter of 8 October will either provide sufficient information or, at the very least, go a long way to providing sufficient information for an appropriate evaluation to be made by the claimant. The court has not yet seen those documents which have been proffered in that letter.

I have formed the view that the application in its current form should be adjourned. I think the application in the circumstances has turned out to be premature. It is unfortunate that the evidence supporting the suspension-lifting application has not yet been served and is not before the court. I make no criticism at this stage of the defendant for not doing so; yet there is clearly a history which I am not going to resolve today as to why it left its application to lift the suspension until last week as such. But the fact of the matter is that the evidence is not going to be available before the end of today.

Secondly, the defence is not yet in and although obviously the defendant and its legal team must have a pretty good idea of what the defence is going to be, it has not yet been finally drafted and it would be inappropriate at this stage for the court to insist that every material plea is now identified to the court. It has until the end of this week to produce its defence and at this short notice it should not be constrained to produce it in less than the time that it has. It will then be clear, at least, precisely what the grounds of the application for suspension lifting are and, secondly, what the defence actually is going to be.

I repeat what the court said in Pearson in relation to the suspension-lifting application. Mr. West has said that his client will argue that there is no serious issue to be tried, it being now standard practice for what are in effect Cyanamid principles to be applied to the lifting of the suspension. If there is no serious issue to be tried, then it is likely that the suspension would be lifted. If there is a serious issue to be tried, the court then goes on to consider whether damages are an adequate remedy on the balance of convenience. If, and to the extent that, any argument on the part of the defendant that there is no serious issue to be tried is based on controversial fact, i.e. facts which are effectively controverted by the claimant, then those are facts which cannot sensibly be deployed by the defendant to seek to justify the argument that there is no serious issue to be tried. If there is, however, some general point of principle or of law or of obvious inference, irrespective of controversial fact, on which the defendant can properly rely to say that there is no serious issue, obviously that argument can go ahead. But other than that, I do not see how controversial fact to support such an argument can properly be deployed.

It follows from that, that that is not an appropriate ground for making disclosure of this documentation at this stage. Secondly, until (a) that witness evidence is in and (b) the defence is served, it is not sufficiently clear what the defence is going to be. If it be the case that the defendant does seek to assert that Carat’s prices were, on any proper basis, sustainable, then I would have thought, without finally deciding the issue, that certainly on standard disclosure there would at the due time have to be disclosure of Carat’s pricing because an area of investigation will then be whether the prices were sustainable or not. But one would need to see how the defendant puts it.

I have the advantage (and only limited people in this room have the advantage) of seeing at least the overall difference (said to be) between Carat’s pricing and the claimant’s pricing. The parties from both sides will need to take that into account when reviewing the position as to whether to pursue and/or defend this adjourned application.

Mr. Bowsher QC argues that one of the reasons for seeking these documents now is the need on his client’s part through counsel to plead the case more clearly. He, for instance, relies on one point where, based on information incorrectly provided by the defendant’s solicitors, that Ebiquity was never informed of which tenderers were putting in which prices, the claimant pleaded its case at least partly on the basis that that was an explanation as to why, possibly at least, errors were made it the comparative evaluation of the claimant and Carat’s tender. That information has now been corrected. It is now said that Ebiquity was aware. That, by way of an example, doubtless is a “t” to be crossed or an “i” to be dotted in terms of the pleadings, but I do not see for instance that this makes a material difference to the basic pleaded case which is primarily promulgated on the basis that Carat’s pricing could not be less, or significantly less, than the claimant’s. That is based on the claimant’s (I will call it) “market share argument”. That will remain its case and if disclosure, when it comes, identifies other material errors which simply could not be ascertained beforehand, then doubtless an appropriate application can be made to amend.

The third point made by Mr. Bowsher QC is that the claimant should not be put to the expense of defending suspension proceedings without knowing in detail the information about Carat’s pricing so that a detailed analysis, perhaps supported by an expert, can be made in time before Thursday of next week to determine whether it is appropriate to continue to defend the suspension proceedings or possibly even to continue pursuing the proceedings. The suspension proceedings necessarily need to be brought on within a reasonably short period of time in case there is anything in the argument and evidence that is likely to be deployed by the defendant that it is urgent that the suspension is lifted and that the contract is placed with the successful tenderer. Obviously the court will have to review the evidence on that if and when it comes in. It is therefore more likely than not, given the timescale, that the claimant will be put in any event to the expense of the suspension proceeding whether or not I have made an order today. So I do not see that that weighs in the balance significantly at this stage.

So I am going to adjourn the application. That will have the advantage (subject to discussions about the confidentiality ring which we are now going to have) that when the claimant sees the two additional documents or series of documents provided pursuant to the offer made by the Treasury Solicitor on 8 October 2014 it may be satisfied, but it may not be, that it can make a decision as to whether to pursue the application in the light of those documents when it has seen them as such.

It seems to me, on balance, that that is the appropriate way to deal with the application today, but I must now deal with the confidentiality ring.