In a successful procurement claim, one of the forms of relief commonly sought is the recovery of damages. Where the automatic suspension is lifted by the court, this will often be the only substantive remedy left.

However, the recent appeal decision in Braceurself v NHS England [2024] EWCA Civ 39 raises the bar for seeking an award of damages. In a case where the contract had already been let to the other bidder, and so damages were the only recourse available to Braceurself, on appeal the Court of Appeal upheld the decision not to award the claimant bidder damages. 

The claim and automatic suspension

Braceurself and one other bidder submitted their tenders for the provision of orthodontic services for NHS England. Braceurself’s bid was unsuccessful, having scored 2.25% behind the successful bid. In practice, that difference was one mark on a single question. 

The tender included questions relating to clinical and service delivery and accessibility. ’Braceurself’s premises were on the first floor and its bid proposed the use of a stairclimber and alternative premises. However, NHS England incorrectly evaluated their bid on the mistaken belief that the Claimant was proposing: 

• to install a stairlift, which had less flexibility than a stairclimber; and
• to routinely use alternative premises for patients with reduced mobility, which was actually only to be used where access to the first floor of their usual premises was inaccessible (due to flooding or fire, etc.). 

Braceurself’s alleged ‘manifest error’ in the marking of their bid and claimed that, had the manifest error not occurred, they would have been the successful tenderer. 

Braceurself challenged NHS England’s decision, triggering the automatic suspension which prevented NHS England from entering into the contract with the successful bidder. However, NHS England successfully applied to lift this suspension, with the Judge concluding that damages would be an adequate remedy should Braceuself be successful at trial. The contract was subsequently entered into. 

The initial decision

The court concluded that there had been a ‘straightforward misunderstanding’ of the bid, meaning the ‘margin of appreciation’ (also known as the ‘margin of discretion’) afforded to evaluators was not relevant, as it was not a question of judgment or assessment. It determined that Braceurself should have received a higher score (albeit by only 0.25%), and therefore should have been awarded the contract. 

It was then necessary to consider whether it would be appropriate to award damages to Braceurself. Principles derived from retained EU law require that in order to be awarded damages, a breach must be ‘sufficiently serious’. The court concluded that the breach was not sufficiently serious and therefore did not award Braceurself damages. They noted that it was an isolated error in a close competition, the breach was inadvertent and the procurement was otherwise carefully managed.

Braceurself were therefore left without a remedy, despite the court acknowledging that they would have been awarded the contract, but for the manifest error.

Braceurself appealed the decision, and the Judgment was handed down at the end of January 2024. 

The appeal

There were three main issues considered in the substantive appeal:

1. Where the court finds that a breach prevented the challenging bidder from being awarded the contract, does that in itself make the breach sufficiently serious to warrant an award of damages? 

The Court of Appeal concluded that the relevant principles were concerned with the nature and quality of the breach, rather than the consequences of it. The consequences weren’t, and shouldn’t be, determinative when considering whether the breach was sufficiently serious, even where a causal link between the breach and loss is established.

1. How relevant are factors of the ‘excusability’ of the breach and the state of mind of the contracting authority (e.g. whether the breach was inadvertent)?

The court confirmed that these factors are highly relevant. They evidence the degree of culpability, which is a key factor when considering whether a breach is ‘sufficiently serious’ to warrant an award of damages. 

It was also noted that a factual error – such as the difference between a stairlift and a stairclimber – may be understandable at the time and context it was made, even if obvious in hindsight. 

1. Whether Braceurself had been left without an effective remedy, e.g. by the automatic suspension being lifted and no damages awarded.

Finally, the court acknowledged that there may be a potential conflict between the result of an application to lift the automatic suspension (which considers whether damages would be an adequate remedy for the challenging bidder) and the decision at trial on whether a breach was sufficiently serious to warrant those damages being awarded. Nonetheless, it is not bound to award damages where the bidder is successful at trial. 

The Court of Appeal considered the case a “very unusual” situation, as it related to “A single, inadvertent breach in an otherwise impressive and careful procurement exercise [which] caused the wrong result”.

The appeal was therefore rejected, and Braceurself continues to be left without damages.

As an aside, the Court of Appeal also considered whether the error should have led to the court adjusting the scores such that Braceurself’s score was the highest. They therefore concluded it should not have done. We don’t consider this in detail here, beyond noting that this related to evaluators’ other underlying access concerns. 

The implications

Braceurself may seek to appeal this decision to the Supreme Court, but for now, the effects of this decision could be wide-reaching for procurement challenges. The case undermines the assumption that a breach resulting in the ‘wrong’ bidder being awarded a contract is in itself sufficient to justify an award of damages. 

As a consequence, the bar for obtaining an award of damages is higher than many believe. Not only must a breach be proven but, regardless of the potentially significant consequences, the bidder must also prove by reference to a number of factors, that it is sufficiently serious. 

Understandably, the decision may result in bidders exerting increased efforts in seeking to oppose applications to lift the automatic suspension, in order to preserve alternative remedies available to them.

If you have any questions in relation to the issues raised by this decision or would like advice in relation to a public procurement challenge, please contact Amy Callahan-Page.