Royal Courts of Justice
Rolls Building
London, EC4A 1NL
Before :
MR ROGER TER HAAR KC
Sitting as a Deputy High Court Judge
Between:
CUBIC TRANSPORTATION SYSTEMS LIMITED Claimant | |
- and – | |
(2) TRANSPORT TRADING LIMITED Defendants INDRA SISTEMAS S.A. Interested Party |
Sarah Hannaford KC, Sir James Eadie KC, George Molyneaux and Courtney Burrell -Eade (instructed by DLA Piper UK LLP) for the Claimant
Valentina Sloane KC, Patrick Halliday and Oliver Jackson (instructed by Herbert Smith Freehills Kramer LLP) for the Defendants
Hearing date: 11 December 2025
APPROVED JUDGMENT
This judgment was handed down remotely at 10.30am on 15 January 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Mr Roger ter Haar KC :
INTRODUCTION
The proceedings before the Court concern a challenge by the Claimant (“CTSL”) to the procurement (the “Procurement”) by the Defendants (“TfL”) of a contract for revenue collection services (the “Proteus Contract”). CTSL was the unsuccessful tenderer. There was one other tenderer, the Interested Party (“Indra”). Indra took no active part in the hearing before me, but did submit evidence.
The application presently before the Court is TfL’s application for an order lifting the automatic suspension of the Procurement.
THE MATERIALS BEFORE ME
There were placed before me a number of witness statements:
Three witness statements from Hong-Lam Nguyen, formerly TfL’s Head of Hosting Transformation and now Head of RCC Transformation at TfL;
Two witness statements from Rachel Lidgate, a partner in the firm of Herbert Smith Freehills Kramer LLP, TfL’s solicitors in this matter;
Two witness statements from Juan Antonio March Garcia, Global Rail and Transit Business Director at the Interested Party (Indra);
One witness statement from David Alan Wear, Chief Financial Officer for Europe, the Middle East and Africa and Asia Pacific for CTSL;
Two witness statements from Simon Jonas Banks, VP-Key Accounts for CTSL;
One witness statement from Claire Louise Whittle, a partner in DLA Piper UK LLP, solicitors for CTSL.
The witness statements exhibited a substantial amount of relevant documentation.
I also had placed before me a bundle of authorities.
I had considerable assistance from the Parties’ counsel’s Skeleton Arguments and oral submissions.
FACTUAL BACKGROUND
There are no significant factual differences between the Parties, although the emphasis to be given to different aspects of the evidence and the significance of evidence was, of course, the subject of detailed submissions before me.
The Proteus Contract is to manage and operate the revenue collection system by which TfL collects all the fares and ticketing across its network, for each of around 4 billion journeys made each year. It is a key contract in TfL’s planned improvements to public transport services in and around London, which include upgrading Oyster cards to a digital card that can be used from passengers’ phones (an improvement known as “OABT” (Footnote: 1)); rolling out barcode ticketing to replace magnetic stripe ticketing at interchange stations; expanding contactless payments to National Rail stations outside the London area; strengthening anti-fraud and cybersecurity measures; and improved methods to hold the contractor to account for effective delivery of TfL services. These improvements will benefit both TfL and the travelling public.
The Proteus Contract replaces an existing revenue collection contract (the “RCC”), for which CTSL is the incumbent provider and which was procured in 2014.
The RCC had an initial term of seven years, commencing in August 2015 and expiring in August 2022. It was extended for three years in line with its terms.
It was extended again, for a period of one year, expressly to ensure that TfL had time to complete the Procurement. It is due to expire in August 2026, and contains no existing mechanisms to extend it further. A further extension would have to be commercially negotiated between TfL and CTSL were the automatic suspension to remain in place, and not if the suspension is lifted.
Under the RCC, CTSL is responsible for maintaining ticketing and fare collection equipment on approximately 7,000 buses, over 3,000 ticket gates, 1,800 standalone validators, 1,600 ticket machines and card readers at 250 National Rail stations, together with ‘back-office’ equipment for calculating and processing fares. These systems collect fares totalling around £6.2 billion per year.
The new Proteus Contract will be for an initial seven years, with an option to extend for a further five years. The value of the base contract for the seven-year term is around £800 million.
The Contract Notice for the Procurement was published on 14 November 2022. The Procurement was then conducted via the competitive procedure with negotiation under Regulation 29 of the Public Contracts Regulations 2015 (the “PCR”), with the following stages: Selection Questionnaire; Invitation to Submit Outline Solution; Invitation to Submit Detailed Solution; Stage 1 Tender Submission; and the Invitation to Submit Final Tender (“ISFT”). The Procurement included extensive negotiation, including 19 dialogue meetings with CTSL.
CTSL points out that there were delays in the Procurement. It says that the Procurement was announced in late 2020. At that time, it was envisaged that the Proteus Contract would be awarded in November 2023. However, there were repeated delays, as a result of both: (i) TfL not being ready to proceed as planned; and (ii) TfL agreeing to requests for extensions of time to submit tender documents from both CTSL and Indra. When the Decision was announced on 15 July 2025, it was nearly two years late.
The ISFT required bidders to submit responses to 15 technical questions, which were divided into 48 sub-questions.
On 21 March 2025, final tenders were submitted by CTSL and Indra.
On 15 July 2025, TfL sent out decision letters to both bidders.
In the letter to CTSL, TfL explained that CTSL had failed technical question 1, which was a Pass/Fail question, and that its bid had been disqualified. Extensive pre-action correspondence and disclosure followed.
On 15 August 2025, CTSL issued its claim form challenging the outcome of the ISFT evaluation. Particulars of Claim were filed and served on 29 August 2025, including a schedule of scoring challenges.
On 5 September 2025, TfL disclosed to CTSL the comments recorded by evaluators during their individual assessments of the bids, prior to moderation.
On 14 October 2025, CTSL filed and served its Amended Particulars of Claim (the “APOC”).
In the APOC, CTSL argues that it should have won the Contract, and claims damages. Its claim includes allegations:
that TfL failed to provide sufficient reasons (APOC/19);
that TfL failed to keep sufficient records (APOC/20);
that TfL treated CTSL unequally and unfairly (APOC/22(4));
that TfL failed to follow the ISFT (APOC/22(2), 22(3), 26);
that evaluators’ training was inadequate (APOC/22(5), 22(7));
that TfL applied undisclosed criteria (APOC/22(8)(a));
of conflicts of interest (APOC/23-25);
of bias (APOC/25(1)(d));
that TfL should have rejected Indra’s final bid (APOC/29(1)-(3)); and
that TfL should have rejected Indra at Selection Stage (APOC/30).
The APOC also incorporates Amended Schedule 1, which is a 108-page schedule of highly detailed scoring challenges (the “Schedule”). In the Schedule, CTSL challenges the scoring of its bid and/or Indra’s bid for no fewer than 32 out of the 48 sub-questions. The challenge in respect of each individual sub-question is itself complex: each sub-question response typically ran to 100 pages or more.
The claim gave rise to the ‘automatic suspension’ under Regulation 95(1) of the PCR, prohibiting TfL from entering into the Proteus Contract with Indra. TfL sought CTSL’s consent to the lifting of the suspension in correspondence, but CTSL refused. On 29 September 2025 TfL applied under Regulation 96(1)(a) to lift the suspension. Indra supports TfL’s application to lift.
That is the application presently before me.
There is also an application by CTSL to expedite these proceedings. In considering whether to grant TfL’s application, it is relevant to consider when CTSL’s claim is likely to come on for trial.
LEGAL PRINCIPLES
The legal principles governing an application to lift the automatic suspension are well known, agreed between the Parties and can be briefly summarised. The Court should apply the familiar American Cyanamid test. The relevant questions are: (Footnote: 2)
Is there a serious issue to be tried?
If so, would damages be an adequate remedy for the claimant if the suspension were lifted and it succeeded at trial? In other words, is it just in all the circumstances that the claimant should be confined to a remedy of damages? If so, that should be determinative; the suspension should be lifted.
If not, would damages be an adequate remedy for the defendant if the suspension remained in place and it succeeded at trial?
Where there is doubt as to the adequacy of damages for either of the parties, which course of action is likely to carry the least risk of injustice if it transpires that it was wrong; that is, where does the balance of convenience lie?
SERIOUS ISSUE TO BE TRIED
In paragraph 27 of TfL’s counsel’s Skeleton Argument, this issue is conceded:
In accordance with the normal approach to applications of this kind, TfL is willing to concede, strictly for the purposes of the application to lift only, and taking account of admonitions in the case law against holding a ‘mini-trial’, (Footnote: 3) that there is a serious issue to be tried. While TfL’s position is that there is no merit in the claim, it recognises that the Court cannot realistically be asked to determine the merits of CTSL’s very wide-ranging complaints at this hearing.
WOULD DAMAGES BE AN ADEQUATE REMEDY FOR CTSL?
CTSL puts forward three reasons why damages would not be an adequate remedy for it if CTSL succeeds at trial:
The Contract is an exceptionally large and prestigious contract;
Failure to obtain the Contract would be likely to require a radical downsizing of CTSL’s business and would cause CTSL to lose highly-skilled and trained staff. This would undermine CTSL’s ability to compete for other contracts;
The nature of certain of CTSL’s claims is such that damages may well be difficult to assess.
TfL contends:
The burden of proof lies upon CTSL to support the continuance of the automatic suspension;
There is no existential risk to CTSL or the wider Cubic Group;
Alleged harm to CTSL’s reputation does not mean that damages are inadequate;
Redundancies or job losses are remediable in damages;
If there was any breach, it was not sufficiently serious to provide TfL with a remedy in damages.
BURDEN OF PROOF
In Openview Security Solutions Ltd v Merton LBC (Footnote: 4), Stuart-Smith J. said:
What then are the criteria to be applied before a court accepts that “loss of reputation” is a good reason for holding that damages which would otherwise be adequate are an inadequate remedy for American Cyanamid purposes? In the absence of prior authority directly in point (none having been cited by the parties) but with an eye to the approach adopted by the Court in Alstom, DWF and NATS I suggest the following:
Loss of reputation is unlikely to be of consequence when considering the adequacy of damages unless the Court is left with a reasonable degree of confidence that a failure to impose interim relief will lead to financial losses that would be significant and irrecoverable as damages;
It follows that the burden of proof lies upon the party supporting the continuance of the automatic suspension and the standard of proof is that there is (at least) a real prospect of loss that would retrospectively be identifiable as being attributable to the loss of the contract at issue but not recoverable in damages;
The relevant party who must generally be shown to be affected by the loss of reputation is the future provider of profitable work.
These are general criteria, which need to be reviewed and considered in the light of the facts of each case. I readily accept that there is more to be said on the subject and that principles such as those I have suggested are not to be applied by rote.
I note that paragraph [39(ii)] was said in the context of a submission concerning the impact of loss of reputation in the context of consideration of the issue of adequacy of damages as a remedy for a dissatisfied tenderer, and I note the qualifications in paragraph [40], but I accept that generally the dissatisfied tenderer has the burden of proof in establishing that damages would not be an adequate remedy, firstly because the automatic suspension follows upon a claim made by that tenderer and, secondly, because the relevant facts are likely to be in the tenderer’s knowledge.
This is also consistent with what O’Farrell J. said in Bombardier Transportation UK Ltd and others v London Underground Ltd (Siemens Mobility Ltd, interested party) (Footnote: 5):
Each case must be considered on its own facts. In most cases, unsuccessful bids are part of the normal commercial risks taken by a business and will not have any adverse impact apart from potential wasted costs of the tender and lost profits. Not every failed bid will result in damage to reputation causing uncompensatable loss. There must be cogent evidence showing that the loss of reputation alleged would lead to financial losses that would be significant and irrecoverable as damages or very difficult to quantify fairly …...
In my judgment, it follows from what O’Farrell J. said in the second and third sentences of that passage that it is incumbent upon the dissatisfied tenderer to show that its case is not within the category of “most cases”.
THE APPLICABLE STANDARD
There was some debate before me, particularly in respect of the loss of reputation issue, as to what standard the Court should apply in assessing this issue.
There are cases in which the Court has stated that the applicable question is whether there is “cogent” evidence that the failure to be awarded a disputed contract is a breach in respect of which damages would be an inadequate remedy: see for example the passage from the judgment of O’Farrell J. in Bombardier set out above.
In Unipart Group Ltd and another v Supply Chain Coordination Limited (Footnote: 6), Constable J. said:
The Claimants raise the following points which either separately or in the aggregate, they contend, mean that it is arguable or likely that damages will not be adequate: (1) the prestigious/high value of the project and its impact on reputation/future bids/irreparable harm; (2) the complexity of calculation of loss; (3) that they may be left with no effective remedy if the breaches are found ‘not sufficiently serious’ (the Francovich point). I must consider the first issue as it applies to each Claimant separately, although there will be common themes; the second and third issues apply to each Claimant in the same way and can be considered together.
In Covanta Energy Ltd v Mersey Waste Development Authority [2013] EWHC 2922 (TCC), Coulson J. (as he then was) summarised the authorities on adequacy of damages:
“(a) If damages are an adequate remedy, that will normally be sufficient to defeat an application for an interim injunction, but that will not always be so (American Cyanamid, Fellowes [v Fisher [1976] 1 QB 122 (CA)], National Bank [v Olint Corp [2009] 1 WLR 1405]);
(b) In more recent times, the simple concept of the adequacy of damages has been modified at least to an extent, so that the court must assess whether it is just, in all the circumstances, that the claimant be confined to his remedy of damages (as in Evans Marshall [[1973] 1 WLR 349] and the passage from Chitty); …”
When deciding if the claimant should be so confined, the question is whether, if the automatic suspension is lifted, the claimant will arguably or likely suffer a loss for which damages are not an adequate remedy: see Draeger Safety UK Ltd v The London Fire Commissioner [2021] EWHC 2221 at [41], DHL Supply Chain Ltd v The Secretary of State for Health and Social Care [2018] EWHC 2213 at [48] and One Medicare v NHS NorthamptonshireICB at [12] and [15]. This is a question which might be answered with a varying degree of certainty (hence the different language used in some of the authorities). Providing the point is arguable – or, put another way – that the risk is a real one, the threshold has been met to avoid the outcome identified in (a) in the quotation above. However, the degree of certainty may be a factor then to weigh in the overall balancing exercise when considering where the least risk of injustice lies.
I accept and adopt Constable J.’s analysis. There is no absolute requirement of “cogent evidence” in this context. However, the further a claim departs from immediately obvious and easily provable losses (such as wasted tender expenses) towards more ephemeral losses (of which loss of reputation may be an example) then the clearer the evidence will need to be to satisfy the Court that there were, or there was a real risk of, such losses.
THE PROTEUS CONTRACT IS EXCEPTIONALLY LARGE AND PRESTIGIOUS
Again in the Unipart case, Constable J. said (Footnote: 7):
Both Claimants rely upon the fact that, they say, the New Contract is a large and prestigious one. Neither Claimant suggests that loss of this contract would be an existential threat to their business.
There are a number of cases where the contract has been perceived as highly prestigious and that this has contributed to a greater or lesser extent to the conclusion that damages would an inadequate remedy for the unsuccessful bidder: see Alstom Transport v Eurostar Internation Limited [2010] EWHC 2747; DHL (above), specifically in the context of the Existing Contract; Bombardier Transportation UK Limited v London Underground Ltd [2018] EWHC 2926 (TCC); Vodafone Ltd v Secretary of State for Foreign, Commonwealth & Development Affairs [2021] EWHC 2793 (TCC); NATS (Services) Limited v Gatwick Airport Limited [2014] EWHC 3133 (TCC).
It is nevertheless to be remembered that, as Coulson J (as he then was) pointed out in Sysmex (UK) Limited v Imperial College Healthcare NHS Trust [2017] EWHC 1824 (TCC), [2017] All ER (D) 155, merely because the contract in question is large and/or prestigious, that does not somehow mean that, necessarily, a failure to win it cannot be compensated for in damages. The relevance of whether the contract is particularly prestigious or high value feeds into the question of whether the failure to win the tender is likely to damage the tenderers’ reputation in the marketplace and/or make it harder for the tenderer to win other bids in the future, such that the tenderer will suffer financial losses which would be irrecoverable as damages. In this context, I remind myself of the helpful observations of Stuart-Smith J (as he then was) in Openview Security Solutions Limited v London Borough of Merton at [39]:
"What then are the criteria to be applied before a court accepts that ‘loss of reputation’ is a good reason for holding that damages which would otherwise be adequate are an inadequate remedy for American Cyanamid purposes? In the absence of prior authority directly in point (none having been cited by the parties) but with an eye to the approach adopted by the Court in Alstom, DWF and NATS I suggest the following:
Loss of reputation is unlikely to be of consequence when considering the adequacy of damages unless the Court is left with a reasonable degree of confidence that a failure to impose interim relief will lead to financial losses that would be significant and irrecoverable as damages;
It follows that the burden of proof lies upon the party supporting the continuance of the automatic suspension and the standard of proof is that there is (at least) a real prospect of loss that would retrospectively be identifiable as being attributable to the loss of the contract at issue but not recoverable in damages;
The relevant person who must generally be shown to be affected by the loss of reputation is the future provider of profitable work.”
Whilst the more prestigious a contract is the more readily a Court may be to conclude that its loss will produce collateral negative financial effects beyond a direct loss of profit, that does not obviate the need for a claiming party to provide by way of evidence a proper foundation upon which a Court can conclude to the appropriate degree of certainty not just that the contract is prestigious or high value, but that its loss will lead to financial losses that would be significant and irrecoverable as damages. What evidence a Court might expect to see will differ from case to case.
It is clear from this passage and the other authorities cited to me, that the fact that a tenderer has failed to gain the award of a large and prestigious contract is recognised as potentially giving rise to loss that cannot be compensated in damages, but such loss or the risk of such potential loss has to be established – as Jefford J. said in One Medicare t/a One Primary Care LLP v NHS Northamptonshire Integrated Care Board (Footnote: 8):
The threshold for establishing that a company will suffer reputational damage as a result of no more than an unsuccessful bid is a high one. Firstly, for a commercial body, loss of reputation as such is unlikely to mean that damages are not an adequate remedy unless the court can conclude that it will lead to financial loss that is irrecoverable. That was the view of Stuart-Smith J in Openview Security Solutions Ltd v The London Borough of Merton at [39]. That is a straightforward proposition because the relevance of reputation to a commercial body is in its contribution to the success of the business. In any event, the very nature of the procurement process involves the premise that the relevant body is seeking the most economically viable tender evaluated against specified criteria. The fact that a bidder, even if an incumbent provider, is not successful does not in and of itself tarnish that company's reputation. If, in due course, the court concludes that it ought to have been awarded the contract, that judgment establishes the rightness of its position. As Coulson J said in Sysmex (UK) Ltd. v Imperial College Healthcare NHS Trust [2017] EWHC 1824 (TCC) at [50]: "… it is fundamentally wrong in principle to say that an award of damages would not restore a reputation lost because of the rejection of a tender, but the award of the contract itself would".
As the ICB submitted, it is only in respect of contracts of particular prestige that such an irremediable loss may be regarded by the court as suffered. In Medequip Assistive Technology Ltd. v The Royal Borough of Kensington [2022] EWHC 3293 (TCC) at [70]-[75], Eyre J drew together the cases in which the court had found the contract to be so prestigious. DHL Supply Chain Ltd. v Secretary of State for Health and Social Care [2018] EWHC 2213 (TCC) is illustrative as a contract for the provision of all medical devices and hospital consumables to the NHS.
In respect of this aspect of CTSL’s case, its counsel submitted in their Skeleton Argument:
First, the Proteus Contract is exceptionally large and prestigious. If CTSL is not awarded the Proteus Contract, this will damage CTSL’s reputation in the marketplace and make it harder for CTSL to win other contracts in future, such that CTSL would suffer significant financial losses which would be irrecoverable as damages:
The Proteus Contract is “an exceptionally prestigious market-leading flagship contract” (Wear1, §23 [AB/13/200]). TfL’s revenue collection system is widely regarded as “world-leading”, and was described as such in the prospectus which TfL published for the Procurement [AB/20/2634]. CTSL’s experience is that the “contactless customer experience” in London “is viewed as the reference by all the politicians and transit authorities we have dialogued with” [AB/20/2713], and that decision-makers in other cities say that “they want what London has”. TfL has also assisted CTSL in showcasing its capabilities to other potential customers. Failure to obtain the Proteus Contract would therefore result in the loss of very significant reputational benefits for CTSL. See Wear1, §§20-23, 39-44, 54 [AB/13/199-200, 205-207, 209-210].
The scale and complexity of the contract is unique within the geographical markets in which CTSL competes, i.e. Europe and the Middle East. The only other contract of remotely comparable scale within those markets is in Paris, and even that contract involves ~40% fewer transactions (and the other contracts listed at Nguyen2, §25 [AB/10/81-82] are all very much smaller). The contract with TfL is also unusual in that it is a turnkey contract encompassing the provision of both ‘front-end’ equipment (e.g. ticket gates) and a ‘back-office’ solution for processing payments; CTSL has no other contract which combines those two elements. See Wear1, §§25-29, 50-51 [AB/13/201-203, 208].
If CTSL is not awarded the Proteus Contract, there is likely to be a long delay before it could bid for any remotely comparable contract, since: (i) the Paris contract is unlikely to be re-procured until well into the 2030s (Wear1, §§28, 58 [AB/13/202, 211]); and (ii) the Proteus Contract itself is for a term of at least 7 (and up to 12) years [AB/16/554]. CTSL therefore has no short- or medium-term opportunity to ‘replace’ the Proteus Contract.
Public procurements often require bidders to demonstrate their technical capabilities and scale by reference to previous experience, and to provide case studies from other contracts. CTSL currently relies heavily on the Existing Contract when bidding for other opportunities, at the stages of both qualification and evaluation, but the rules for some procurements (i) restrict the extent to which bidders can rely on contracts which are more than a certain number of years old; (ii) are such that CTSL would not be able to rely on contracts which are held by related entities outside Europe; and/or (iii) require that reference contracts be from within Europe. CTSL’s competitive position would therefore be very significantly weakened without the Proteus Contract, especially by the time that any opportunity arises to bid for a comparable contract in London or Paris. See Wear1, §§28, 31, 45-49, 52-54, 58 [AB/13/202, 203, 207-208, 209-210, 211], and also §Error! Reference source not found. below.
The evidence which Indra has filed underlines that the Proteus Contract is likely to facilitate the winning of other tenders by the company to which it is awarded. Mr Garcia states that: (i) the Proteus Contract would “consolidate Indra’s position as a trusted partner for the Defendant and as a competitive supplier in future UK and international transport procurements” (Garcia1, §33 [AB/12/172]); (ii) delivery of the Proteus Contract would “build valuable experience and know-how” which could be “leveraged across [Indra’s] global operations, strengthening its competitiveness in future tenders, both in the UK and further afield” (Garcia1, §45 [AB/12/175]); and (iii) “continuation of the suspension could reduce Indra’s chances of securing other contracts” (Garcia1, §64 [AB/12/182]). Indeed, Indra is already seeking to leverage the Proteus Contract to win further contracts: see Banks2, §17 and the slides referred to there. The logic of the points made by Mr Garcia applies with even greater force to CTSL, which would be permanently denied the benefits of holding the Proteus Contract if the suspension is lifted. By contrast, if the suspension is maintained and TfL succeeds at trial, Indra’s enjoyment of those benefits will merely have been deferred. Compare Vodafone, §89.
In its counsel’s Skeleton Argument, TfL contends:
CTSL’s claims of loss of future opportunities due to alleged damage to reputation are speculative, remote and unconvincing.
CTSL’s competitor, Indra, has not had the benefit of providing revenue collection services to TfL (as CTSL has done, for decades). Yet Indra was successful in the Procurement. Indra was also recently successful in a procurement for the Dublin National Transport Authority, and CTSL was also unsuccessful (Nguyen2/22) [AB/80] (Garcia1/9) [AB/162]. It is generally accepted that any bidder will ‘win some’ and ‘lose some’ in this market: CTSL’s own annual accounts observe that the sector is “inherently risky” by its nature (Nguyen1/52-53) [AB/44].
Transport contracts are competitively tendered on a regular basis. CTSL competes for and wins contracts. Its wins include contracts for South Western Rail and other UK rail operators, and two contracts in Ireland. It is currently competing in Manchester. Entities in the wider Cubic Group compete for, and win, large contracts internationally, including in New York, Vancouver, San Francisco, Sydney and Queensland.
Both CTSL and the wider Cubic Group have a proven track record on which to rely; in part as a result of their longstanding operation of previous revenue collection contracts for TfL. As was said by O’Farrell J in Camelot (at §96):
“…No doubt, the Camelot Group has benefitted from the leverage available from association with the National Lottery…That is evidenced by the other lottery and consulting business that the group has obtained around the world… the Camelot Group can now use those other lottery and consulting contracts, as evidence of relevant experience and past performance, to obtain future projects. Camelot is an established operator in the lottery business, with a proven track record over decades. It can continue to leverage its experience in order to demonstrate its expertise and technical and professional ability”
CTSL can still rely on the RCC as a reference in its bids for future contracts. This will not suddenly cease when the contract itself expires in August 2026. CTSL has over a decade’s worth of experience of performing the existing RCC which it can rely upon. There are numerous valuable opportunities coming up across the market, as set out in CTSL’s own internal documents, for which the RCC can be a case study (Nguyen2/25-26) [AB/81]. (Footnote: 9) CTSL has had “recent dialogue” with the contracting authority for [a number] of these opportunities. CTSL also has its other ongoing European contracts, including two contracts in Ireland, that it can use as references if required (Nguyen2/15-20) [AB/78]. To the extent that CTSL requires another high profile, ‘prestige’ contract as a reference, it can rely on other marquee contracts in the wider Cubic Group, including the revenue collection services for the New York subway, and contracts in Sydney and Boston (Nguyen2/23) [AB/80].
The high point of Mr Wear’s evidence as to alleged damage to CTSL’s reputation is the claim that CTSL will be at a competitive disadvantage in any future procurement of the Paris contract. But this does not stand up to scrutiny (Nguyen2/30-31) [AB/82].
Mr Wear accepts that the Paris solution is “quite different” to the Contract (Wear/28) [AB/202]. It is far from clear that the Contract would be a good reference in any event, were CTSL to compete for Paris in future.
Should the Paris contract be reprocured when it expires in 2027, it is highly likely that CTSL can continue to rely on the RCC as a reference if it wishes. If, on the other hand, the current Paris contract is extended such that it is reprocured later in the 2030s, it is highly likely that CTSL can use the Cubic Group’s global case studies as references (in the same way as it did in this Procurement).
Mr Wear’s contention on this is speculative at best. As Ms Nguyen states (emphasis in original): “It does not seem obvious to me that the Automatic Suspension should remain in place so that CTSL's position might be improved in relation to one procurement process which might start in the 2030s and which might limit the reference contracts only to European examples” (Nguyen2/31) [AB/83].
Against that background, CTSL’s evidence that it will suffer irremediable reputational damage lacks specificity and credibility. The reality is that CTSL, and the wider Cubic Group, are significant players in the international transportation market, and that CTSL’s failure to win the Contract will not significantly affect its chances in future procurements. Notably, despite recently losing a significant procurement for the Dublin National Transport Authority, CTSL has adduced no evidence explaining the adverse effect of that loss.
I have set out both Parties’ submissions in extenso because it seems to me that this issue is the pivotal issue in this application.
The evidence shows that the TfL system is probably the largest and most extensive revenue collection system in the world outside the United States of America. Having lost this contract award, I accept that the status of CTSL outside the United States of America is, to an extent, diminished. On the other hand, CTSL does have other irons in the fire outside the USA, including for South Western Rail in the United Kingdom and two contracts in Ireland.
It is also part of, and can point to its parentage in, the Cubic Group which has competed for, and won, large contracts internationally, including in New York, Vancouver, San Francisco, Sydney and Queensland.
CTSL competes in a sophisticated and limited market, in which future contracting partners will know from experience in the procurement of public sector contracts that such contracts are tendered and, when they expire, retendered. The mere failure by CTSL to win this tender should not necessarily mean to a future employer that CTSL’s place in the market place as a successful and professional designer, supplier and maintainer of such systems is diminished, although I do not rule out that at a full trial of an issue as to damages such a case as to diminution of reputation might be made out on evidence before a Court in future.
It seems to me there is also some strength in the point made by TfL (see for example paragraph 54 of Hong-Lam Nguyen’s First Witness Statement) that any damage to the reputation of CTSL that it might have suffered or will suffer would be likely to be rectified were CTSL to succeed at trial and receive an award of damages.
In the circumstances, I accept TfL’s submission that the reality is that CTSL, and the wider Cubic Group, are significant players in the international transportation market, and I also consider that CTSL has failed to establish at this stage that its failure to win the Proteus Contract will significantly affect its chances in future procurements by reason of loss of reputation (I accept that it is always possible that at a full trial on different evidence, such a case might in due course be made out).
WOULD FAILURE TO OBTAIN THE PROTEUS CONTRACT BE LIKELY TO REQUIRE A RADICAL DOWNSIZING OF CTSL’S BUSINESS AND CAUSE CTSL TO LOSE HIGHLY-SKILLED AND TRAINED STAFF?
There is no question that these factors are capable of establishing that damages are not an adequate remedy.
On the need for cost-cutting, see Lancashire Care NHS Foundation Trust v Lancashire County Council (Footnote: 10); One Medicare t/a One Primary Care LLP v NHS Northamptonshire Integrated Care Board (Footnote: 11).
On the potential loss of a skilled workforce, see Counted4 Community Interest Co v Sunderland City Council (Footnote: 12).
On the other hand, as Edwards-Stuart J. said in Mitie Ltd v Secretary of state for Justice (Footnote: 13):
I accept that from time to time valuable employees will be lost when the employer fails to win a new contract or, more probably, the renewal of an existing contract … this is a hazard that is inherent in this type of business.
On the evidence before me, I accept that such is the share of CTSL’s present business represented by the existing RCC that the failure to win the award of its successor contract will have a marked effect upon CTSL’s existing business including the probable loss of a significant portion of CTSL’s existing workforce. This is well explained in paragraphs 21.1 to 21.4 of CTSL’s counsel’s Skeleton Argument.
However, against that, as TfL submits in paragraph 36(1) of its counsel’s Skeleton Argument:
CTSL has recently announced a restructuring involving a loss of up to 9% of CTSL’s employees, and, it appears, offshoring software development to India. Even if CTSL were to win the Contract, there would be significant changes to its UK-based workforce in any event (Nguyen2/41-42) [AB/85].
CTSL will remain part of the wider Cubic Group and able to rely on the technical expertise of that group (as Mr Wear has done in preparing his evidence). CTSL will also be able to rely on the technical expertise of individuals who TUPE transfer across to CTSL for future contracts (Nguyen2/43-44) [AB/85].
Whilst I accept that the loss of the Proteus Contract will have a significant effect upon CTSL’s business, in my judgment, if breach is established in due course, a Court will be able to enter upon investigation of, and assess, an appropriate award of damages.
DIFFICULTY OF ASSESSING DAMAGES
CTSL sets out its submissions in this regard in paragraph 22 of its counsel’s Skeleton Argument:
Third, the nature of certain of CTSL’s claims is such that damages may well be difficult to assess. CTSL’s allegations include that TfL: (i) failed to comply with its obligations of transparency and record-keeping (APoC, §§19-20 [CMB/11/43-45]); (ii) adopted a subjective and impermissible “in the round” approach to evaluation (APoC, §22(2) [CMB/11/46]); (iii) failed to ensure that evaluators were not improperly influenced by other parts of the evaluation (APoC, §§22(3), 26 [CMB/11/46-47, 53]); (iv) used evaluators who lacked sufficient training and/or expertise (APoC, §22(5)-(7) [CMB/11/47-49]); (v) applied undisclosed criteria, had regard to irrelevant considerations, and/or failed to give any or any adequate consideration to various matters (APoC, §22(8) [CMB/11/49-50]); (vi) failed to take appropriate measures to address conflicts of interest (APoC, §§23-26 [CMB/11/50-53]); and/or (vii) unlawfully failed to reject Indra’s bid (APoC, §§27-30 [CMB/11/53-56]). If CTSL succeeds on any or all of those allegations, difficult questions would arise as to what would have happened in the relevant counterfactual.
TfL’s response is in paragraphs 37 and 38 of its counsel’s Skeleton Argument:
It is submitted that damages would be wholly adequate for CTSL, to the extent that any such entitlement could be established. There would be no real difficulty in quantifying any damage to which it might be entitled, given that the Court will have the financial elements of the CTSL bid which will enable its likely profit to be calculated. The parties and the Court therefore have a very good understanding of the value of the claim.
Further, any calculation of damages is simplified in this case by the fact that there were only two bidders at the final stage of the Procurement. CTSL’s primary claim for damages is not even a ‘loss of a chance’ case; it says that it should have won. Even if CTSL fails on its primary case, and needs to fall back on a claim for ‘loss of a chance’, the fact that there were only two bidders would simplify assessment of the relevant probabilities, and the variables should not be so complex as to render the Court unable to assess damages. (Cf. Unipart (Footnote: 14) at §§48-49: in a case far more complex than the current one in relation to causation issues, Constable J concluded that ‘loss of a chance’ remained capable of assessment by the Court).
Ultimately, deciding in the context of assessing whether damages are an adequate remedy whether a Court can fairly assess damages in the case before it, much depends upon judgment by the Court based on experience without necessarily being able to identify all factors which may be relevant because which factors will be relevant will depend upon the Court’s future findings on liability in which not all allegations made may succeed – here there are so many permutations of possible successes (and failures) in the claim pleaded in the APOC and 108 page Schedule to the APOC that predicting the future as to which elements of the claim may succeed is particularly difficult.
That said, it seems to me that damages will probably fall into one or more of the following categories:
Wasted costs of the tender process – these should be reasonably easy for CTSL to establish;
Lost profit on the Proteus Contract: CTSL will have calculated with care the potential profit on the Proteus Contract when tendering, and therefore should be able to quantify and establish a claim under this head;
Disruption costs as a result of the disruption to CTSL’s business by reason of any down-sizing that occurs or by reason of loss of skilled staff: these losses may be more difficult to establish and identify than the first two categories of loss discussed, but are nevertheless the type of losses which the Courts are well used to assessing;
Loss of further contracts as a result of the disruption to CTSL’s business by reason of any down-sizing that occurs or by reason of loss of skilled staff: such losses are more difficult to assess than category (3) above, but are the type of loss of a chance claims which frequently come before the Courts for assessment;
Loss of further contracts by reason of damage to reputation: I have held above that CTSL has failed to establish on the evidence before me that its failure to win the Proteus Contract will significantly affect its chances in future procurements by reason of loss of reputation. However, I have also accepted that at a full trial such a case, based on different evidence, might yet be made out. If so, it would be a case in which the Court (as in category (4) above) would carry out an assessment of damages for loss of a chance of a type with which the Court is familiar.
In assessing this question, it seems to me that the most important consideration is that I have concluded that the fact that the Proteus Contract is large and prestigious does not mean that damages are not an adequate remedy. Further I have concluded that the case put forward as to disruption to CTSL’s business and loss of staff does not establish that damages are not an adequate remedy. In both cases, at the heart of my decision is that damages will be capable of assessment.
I do not consider that outside those two main areas of consideration CTSL has established that there are other aspects of breaches in respect of which a Court will be unable fairly to assess damages.
CONCLUSION
There were other arguments raised between the Parties as to (1) whether any breach which CTSL might establish would not be sufficiently serious as to provide TfL with a remedy in damages; and (2) whether CTSL needed to establish an “existential threat”. In the event I have not found it necessary to reach decisions on these issues.
For the above reasons I conclude that if CTSL establishes its claim, damages would be an adequate remedy for CTSL.
However, in case this matter falls for consideration in another Court, I will set out briefly my conclusions on the other issues which would arise if I am wrong in my above conclusion.
WOULD DAMAGES BE AN ADEQUATE REMEDY FOR TfL?
TfL contends that if the suspension were to be kept in place, and were CTSL to lose at trial, damages would be an inadequate remedy for TfL for the following reasons, as summarised in paragraph 41 of TfL’s counsel’s Skeleton Argument:
Delayed benefits: the Proteus Contract will deliver major benefits, including passenger benefits, which, on a realistic timetable for these proceedings, would be delayed by two years if the suspension is maintained.
Serious operational risks: critical assets within TfL’s revenue collection system are now at the end of their reliable lifespan, and cannot sensibly be replaced under an extension of the current RCC. If the Proteus Contract is not signed without further delay, there is a real risk that assets will start failing, which could result in revenue loss, passenger inconvenience, harm to Train Operating Companies (“TOCs”) (Footnote: 15) on whose behalf TfL collects revenue in London, or even the breakdown of TfL’s entire revenue collection system.
Expiry of Indra’s offer: Indra’s offer expires in March 2026. If the Contract is not signed before then, Indra may well revise the terms of its offer. There can be no guarantee that any revised offer will be acceptable to TfL. There is a significant risk that the Contract will not be signed at all if the suspension is maintained.
CTSL’s counsel respond in detail to TfL’s case at paragraphs 25 to 31 of their Skeleton Argument.
As I have said, I am dealing with this part of the issues between the Parties briefly.
As to the first point raised, in assessing the point it is necessary for me to take a view as to when a trial on the validity of the evaluation process is likely to take place.
CTSL submits that this case could be ready for a 12 day trial from mid June 2026 onwards.
TfL contends that the trial on liability alone will take between four and six weeks. It contends that a fair trial could not take place before June 2027, after which a judge would have to consider the matter and write a judgment: on this basis (leaving aside any appeal) the case would not be concluded before September 2027.
I have considered both Parties’ submissions as to timing and have formed the view that a fair hearing of a 12 day trial would not be possible before the end of 2026 at the earliest: there will be extensive disclosure, likely to lead to further amendments to the pleadings, followed by lengthy preparation for a trial even if “only” a 12 day trial. I do not see this as being feasible, even if the Court can find time, before January 2027. If the trial is longer, the time to trial will inevitably be longer.
The answer to CTSL’s application for expedition is not a matter with which I deal in this judgment, but in order to assess TfL’s case I have to form a broad overview as to how long a continuation of the automatic suspension will delay TfL’s plans. It suggests 2 years – that is not unrealistic, but at least 18 months (assuming no appeal to the Court of Appeal) appears to be a minimum.
Looking at TfL’s first point, my conclusion suggests at least an 18 month delay, if not 2 years.
The evidence before me suggests that if the incoming Indra team produce the improvements to the systems which are hoped, those improvements will be of great advantage to the travellers on TfL’s network (and to TfL). TfL has a real interest in procuring such improvements sooner rather than later.
As to the second point (serious operational risks), this Court must be slow to reject serious issues raised by a party in TfL’s position on an interlocutory hearing. This is an interlocutory hearing which, in the nature of such hearings, receives evidence which is not tested by cross-examination. However, the concerns raised in the evidence as summarised in paragraph 64(2) above cannot be dismissed as fanciful and must be given some weight in TfL’s favour.
As to the third point (expiry of Indra’s bid) it seems to me overwhelmingly probable that Indra would not wish to lose this prestigious contract and would keep its offer open – however I accept that a price would be extracted for doing so.
It seems to me that the first two points raised matters which fundamentally may disadvantage passengers which cannot easily be compensated in damages.
Accordingly, if my reasoning had required me to decide whether damages would be an adequate remedy for TfL, my conclusion would probably be that damages would not be an adequate remedy for TfL.
This conclusion also answers in TfL’s favour the remaining point as to the balance of convenience: on the one hand, CTSL will have an adequate remedy in damages if a breach has occurred. On the other hand, if there has been no breach, the delay caused by awaiting a trial in this matter is liable to disadvantage TfL’s passengers in a way that cannot be compensated by damages.
CONCLUSION
For the above reasons I conclude that the automatic suspension should be lifted.