Which comes first – disclosure or lifting the automatic suspension?

Angelica Hymers, Browne Jacobson

In the recent case of Alstom Transport UK Limited v (1) London Underground Limited and (2) Transport for London, the High Court gave guidance on an issue which commonly arises in procurement challenges – whether an application for specific disclosure should be heard before an application to lift a suspension.

Context

The Public Contracts Regulations 2015 provide that (Regulation 95 (1)) “where:

(a) A claim form has been issued in respect of a contracting authority’s decision to award the contract,

(b) The contracting authority has become aware that the claim has been issued and that it relates to that decision, and

(c) The contract has not been entered into, the contracting authority is required to refrain from entering into the contract”

This is referred to as an ‘automatic suspension’. (It is worth noting that the Public Contracts Regulations 2006, and the Utilities Contracts Regulations contain provisions to the same effect.)

In order for the suspension to be lifted, a contracting authority must apply to court. Applications to lift suspensions are decided in accordance with the principles laid down in the American Cyanamid case, which require the court to consider:

  1. whether there is a serious issue to be tried, and if there is
  2. what is the balance of convenience?

In procurement cases, it is often the case that a contracting authority will want the automatic suspension to be lifted as quickly as possible, and so will argue that there is no serious issue to be tried. However, an unsuccessful bidder will often need further information in order to fully argue its case and will therefore make an application for disclosure of specific documents. Therefore, the court is often required to decide which application to deal with first – lifting the suspension so that the contracting authority can enter into its contract, or granting disclosure so that the unsuccessful bidder can better understand its position.

Facts

In this case, London Underground Limited (‘LUL’) had run a procurement for supply of a new traction system for its central line fleet. Alstom Transport UK Limited (‘Alstom’) had submitted a bid but was unsuccessful. Alstom issued proceedings to challenge the award of the contract, which caused LUL’s ability to enter into the contract to be suspended. LUL applied to the court to lift the suspension. The following day, Alstom applied to court for disclosure of certain documents, which it had been requesting from LUL for some time. The court then had to decide whether to hear the application to lift the suspension first (which would mean that LUL could enter into the contract and that Alstom would be limited to claiming for damages only) or whether to hear the application for disclosure first.

Analysis

The court considered two previous decisions:

Pearson Driving Assessments v DVLA
In this case, the court considered that on the facts of the case, an application for specific disclosure did not need to be heard before the hearing to lift the suspension because the unsuccessful bidder would have sufficient material upon which to base its argument that there was a ‘serious issue to be tried’ (and therefore that the suspension should not be lifted before the matter could go to trial) without any further documents.

Bristol Missing Link Limited v Bristol City Council
In this case, the court was concerned that the contracting authority was trying to gain an unfair advantage over the unsuccessful bidder, by refusing its requests for information and then, at the hearing to consider lifting the suspension, producing information which was potentially in dispute in order to support its case without giving the unsuccessful bidder the opportunity to see that information. The judge was very critical of this approach and accordingly refused to hear the application to lift the suspension before the application for disclosure could be held.

Having considered these two precedents, the court confirmed that there is no rule or principle which provides that an application to lift an automatic suspension should always or even usually be heard before an application for disclosure of information. Which application will be held first will depend on the facts of the case. However, practitioners should be aware that:

  1. courts will be keen to see that unsuccessful bidders are not disadvantaged by contracting authorities refusing to disclose information and then relying on the fact that the unsuccessful bidder does not have sufficient information to demonstrate that there is a serious issue to be tried in order to get an automatic suspension lifted
  2. courts will also wish to avoid situations where an application to lift a suspension needs to be adjourned part way through because it has become apparent that documents which the unsuccessful bidder has requested but not been given are, in fact, relevant to the application.

The court in Alstom confirmed that the question as to which application to hear first will depend on whether the documents sought in the application for disclosure are relevant to the application to lift the suspension. The court will therefore analyse the documents sought, and what the issues are likely to be in the application to lift the suspension. This requires consideration of the facts of each particular case, and means that such decisions will be made on a case by case basis by the court, with an eye to the issues set out above. It may be that in many cases, the safest course for the court to follow is to hear the application for disclosure first.