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BEYOND THE DIRECTIVE

BEYOND THE DIRECTIVE. Nigel Giffin QC 11KBW Chambers Bangor University procurement week 22 March 2013. WHERE DO PROCUREMENT LAW RIGHTS AND REMEDIES COME FROM?. Most obviously, Directive 2004/18/EC and Public Contracts Regulations 2006 But potentially also -

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BEYOND THE DIRECTIVE

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  1. BEYOND THE DIRECTIVE Nigel Giffin QC 11KBW Chambers Bangor University procurement week 22 March 2013

  2. WHERE DO PROCUREMENT LAW RIGHTS AND REMEDIES COME FROM? • Most obviously, Directive 2004/18/EC and Public Contracts Regulations 2006 • But potentially also - • EU law – general principles derived from TFEU • Domestic public law • Law of contract • Law of tort

  3. WHY DOES IT MATTER? • Obligations under PCR, TFEU principles and implied contract in many ways similar • But they apply to different contracts • And they lead to very different remedies regimes (procedures and relief)

  4. WHAT ARE THE TFEU PRINCIPLES? • Most obviously – • Non-discrimination • Equality • Transparency • Potentially also – • Proportionality • Good administration • Legal certainty • Confidentiality • And others?

  5. BASIS FOR APPLYING THETFEU PRINCIPLES • TFEU prohibits restrictions on freedom of establishment/freedom to provide services of nationals of member states • Award of a public contract to one undertaking inhibits freedom of others to provide services • To avoid restriction contrary to TFEU, must be done on basis which avoids discrimination • Hence implied positive obligation to comply with general principles

  6. WHICH CASES ARE COVERED? • Part B services contracts (before expressly made subject to transparency/equality obligations in Directive) – C-532/03 Commission v Ireland • Sub-threshold contracts – C-59/00 Vestergaard [2001] ECR I-9505 • Concession contracts – C-324/98 Teleaustria [2000] ECR I-10745; C-458/03 Parking Brixen [2006] 1 CMLR 3 • For definition, see C-274/09 PrivaterRettungsdienst Sadlerand JBW Group Ltd v Ministry of Justice [2012] EWCA Civ 8 • At least some other economic opportunities • C-145/08 Club Hotel Loutraki [2010] 3 CMLR 33 – share sale and management agreement • C-203/08 Sporting Exchange Ltd [2010] 3 CMLR 41

  7. KEY ISSUES ON GENERAL TFEU PRINCIPLES • What exactly is authority obliged to do? • What are limits to when TFEU principles apply? • When is a contract of cross-border interest?

  8. OBLIGATIONS UNDER TFEU • Not required to follow detailed rules in Directive • AG in C-195/04 Commission v Finland • C-226/09 Commission v Ireland (disclosure of weightings) • C-95/10 Strong Seguranca SA (reliance on associated company) • But some advertising and competition is required • Explained in Commission’s Interpretive Communication (2006/C 179/02) – upheld in T-258/06 Commission v Germany

  9. EXCEPTIONS TO TFEU OBLIGATIONS • C-6/05 Medipac-Kazantzidis[2007] ECR I-4557 • Directive exceptions apply by analogy • Probably also a broader public interest justification, though must be limited and proportionate • Possibly also TFEU Article 106(2) in cases where Treaty obligations would obstruct performance of tasks in operation of services of general economic interest • Query whether broader exceptions apply to Part B services under PCR

  10. AG QUIDNET HOUNSLOW LLPv HOUNSLOW LBC[2012] EWHC 2639 (TCC) –LIMITS OF TFEU • Council negotiating exclusively with one landowner (L) for town centre development agreement – claimant (Q) arguing it should have had chance to compete • Development agreement assumed not to be a public works contract, because no obligation on developer to carry out works – a frequent technique • Council’s agreement crucial to site assembly • Q argued that transparency and equality obligations arose under TFEU Article 56

  11. QUIDNET – COULSON J’s DECISION • Not within Article 56 – L not providing services - only an agreement to agree terms of a long lease • No obligation on L to carry out development/provide any services • Construction etc for development would be services provided to L, not by it – no restriction on who could provide those services • Not akin to concession where concessionaire put in shoes of authority and obliged to provide services but entitled to charge • Too radical to suggest TFEU applies to grant of a lease • Matter anyway wholly internal to UK (see next slide) • If Article 56 had applied, obligations not met merely by council making known its intention to enter agreement with L

  12. QUIDNET AND CROSS-BORDER INTEREST • Land was in UK, and Q and L were UK undertakings • No evidence that any non-UK undertaking interested in development • Held therefore to be confined to UK, as in RI.SAN [1999] ECR I-5219 • Rejected conflicting approach in C-231/03 CoNaMe [2006] 1 CMLR 2 and Parking Brixen – enough that non-UK undertaking might be interested if advertised • Doubtful that this is correct

  13. PROCEDURE FOR A TFEU CLAIM • Falls outside remedies provisions of PCR – they cover enforceable EU obligations, but not where contract outside PCR scope • So how to enforce? – must be an effective remedy • Judicial review proceedings in R (Virgin Trains Ltd) v Secretary of State for Transport – on basis that franchise was a concession • In Quidnet, claim for breach of statutory duty under European Communities Act 1972 • Held in Phonographic Performance Ltd v DTI [2004] 1 WLR 2893 that ECA claim (rather than JR) not abuse of process where seeking Factortame damages

  14. WHY DOES FORM OF PROCEDURE MATTER? • Whether automatic suspension applies • Time limit for claim – PCR 30 days – JR 3 months (promptness requirement contrary to EU law – C-406/08 Uniplex[2010] 2 CMLR 47) – breach of statutory duty 6 years! • Held in Quidnetthat relief could not be withheld on delay grounds if acted within limitation period • Availability of damages – no special test under PCR – otherwise necessary to show grave and manifest breach • Procedure – normally no cross-examination in JR – no automatic disclosure (though duty of candour) – permission required

  15. JUDICIAL REVIEW FOR BREACH OF PCR? • Claims by economic operators – • Rejected in R (Cookson & Clegg) v MoD [2005] EWCA Civ 577 • Possibility accepted in R (Hossack) v LSC [2011] EWCA Civ 788 • Need should be rare – perhaps in a case such as Federal Security Services Ltd v PSNI [2009] NICh 3? • Claims by third parties – • R (Chandler) v Secretary of State for Children Schools and Families [2010] LGR 1 accepts possibility • R (Unison) v NHS Wiltshire PCT [2012] EWHC 624 (Admin) indicates very limited standing

  16. JUDICIAL REVIEW TO ENFORCE OTHER OBLIGATIONS IN PROCUREMENT CONTEXT? • Public sector equality duty (Equality Act 2010 s 149) • Consultation on local authority best value arrangements under Local Government Act 1999 s 3 – R (Nash) v Barnet LBC • Best consideration under Local Government Act 1972 s 123 • Alleged defects in decision-making process e.g. R (De Whalley) v Norfolk CC [2011] EWHC 3739 (Admin) • Does breach make contract void? – probably not – Charles Terence Estates Ltd v Cornwall Council [2013] 1 WLR 466

  17. JUDICIAL REVIEW FOR BIDDERSWHERE OUTSIDE EU LAW? • Do contracting decisions have sufficient public law element? • Not usually – R (Menai Collect Ltd) v DCA [2006] EWHC 727 (Admin); R (Gamesa Energy UK Ltd) v National Assembly for Wales [2006] EWHC 2167 (Admin) • But sometimes – R (Law Society) v LSC [2008] QB 737 • Local Government Act 1988 injects sufficient statutory element in local authority cases – R (A) v B Council [2007] LGR 813 • Judicial review often exercised in cases re bidding for grants, exclusive licences etc e.g. Re Watters [2009] NIQB 71, R (Asha Foundation) v Millennium Commission [2003] EWCA Civ 88

  18. CURRENT GOVERNMENT CONSULTATION • December 2012 - Judicial review: proposals for reform • Para 51 proposes 30 day time limit for JR proceedings “based on decisions or actions within the ambit of the PCR” – would catch Unison - not Quidnet – what about Nash? • Para 65 proposes amendment to CPR r.54.5 to make clear that JR claims to be brought within 3 months of first instance of grounds in cases where multiple decisions involved

  19. CLAIMS IN CONTRACT (1) • Implied contract idea developed in exceptional, pre-PCR circumstances – Blackpool & Fylde Aero Club [1990] 1 WLR 1195 • Some subsequent enthusiasm for idea that a contract to be implied generally – Harmon CFEM Facades v House of Commons (1999) 67 ConLR 1; Natural World Products Ltd v Arc21 [2008] LGR 49; Deane Public Works Ltd v Northern Ireland Water [2009] NICh 8 • Could apply in private procurements? – SES Contracting Ltd v UK Coal plc [2007] EWHC 161 (QB)

  20. CLAIMS IN CONTRACT (2) • More recent cases unenthusiastic • No scope to imply on top of statutory regime (J Varney & Sons Waste Management Ltd v Hertfordshire CC [2010] LGR 801) • Even in other cases, only a limited good faith obligation (JBW Group; cf. Re Sidey Ltd [2011] CSOH 194) • Could not use to obtain 6 year limitation period (Montpellier Estates Ltd v Leeds CC [2013] EWHC 166 (QB)) • Most tender documents now expressly exclude contract

  21. CLAIMS IN TORT • May be relevant especially in wasted costs claims • Misrepresentation – implied continuing representation of intentions? • Misfeasance in public office • Claim in deceit failed on facts in Montpellier Estates

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