Breach of Public Contracts Regulations not “sufficiently serious” to warrant damages under Francovich test

 

The Court of Appeal has held that a breach of the Public Contracts Regulations 2015 (SI 2015/102) that results in the wrong bidder being awarded a contract will not automatically constitute a "sufficiently serious" breach to warrant damages in accordance with Francovich v Italy (C-C/90) [1991] ECR 1-5357.

The claimant brought a claim against NHSE.  The High Court found that there was a manifest error by NHSE which, if it had not been made, would have resulted in the claimant winning the tender.  NHSE committed a single, inadvertent breach in an otherwise careful procurement exercise, which caused the wrong result.

In the absence of bad faith of the decision-maker, their "excusability" and state of mind were important factors in considering the "sufficiently serious" test.  The Court of Appeal ruled that a manifest error could be excusable, depending on the facts.

The judgment will be welcome to contracting authorities.  It settles and dismisses any assumption that a breach of procurement regulations resulting in an incorrect contract award will automatically be sufficiently serious to warrant an award of damages.  Aggrieved tenderers will find that the bar for raising a claim for damages is significantly raised.

This is the second case where a party has sought to argue that a particular type of breach or result automatically means that the "sufficiently serious" test is made out. The claimant and appellant attempted to do this (unsuccessfully) in Ocean Outdoor Ltd v Hammersmith and Fulham London Borough Council [2019] EWCA Civ 1642.

Braceurself Ltd v NHS England [2024] EWCA Civ 39

CMA market study into infant formula

 

The CMA has announced a market study into infant formula and follow-on formula in the UK.

The CMA intends to use the market study to consider how the supply of formula has, or may have, adverse effects on consumers, and how it might work better.

In the market study, infant formula comprises infant and follow-on formula as defined by Commission Regulation 2016/127, and formulas labelled as foods for special medical purposes that can be sold without prescription under Regulation 2016/128.

The market study follows work that the CMA has conducted on the rising costs of living where its November 2023 report found that consumers are not always well-equipped to make informed choices for infant formula.  Danon had a 71% share in the UK infant formula market in 2023 and the penetration of own-label alternatives was found to be weak..

The CMA also proposes to consider the market for growing up and toddler milks marketed for children over 1 year old.

The deadline for responses is 13 March 2024.

The CMA must announce within six months if it is intending to make a market investigation reference and must publish its final report on the market study within 12 months. The CMA has indicated it intends to publish its final report in September 2024.

 

https://www.gov.uk/government/news/cma-to-scrutinise-infant-formula-market-through-a-market-study

CAT rules on carriage dispute in collective proceedings against Amazon

 

CAT rules on carriage dispute in collective proceedings against Amazon

The Competition Appeal Tribunal (CAT) has determined the "carriage issue" in two applications to commence collective proceedings, under section 47B of the Competition Act 1998, against Amazon.

 The first application was brought by Ms Julie Hunter and the second by Mr Robert Hammond (each as the proposed class representatives).

The proposed proceedings would both combine standalone claims for damages caused by alleged breaches by Amazon of Article 102 of the TFEU (prior to 31 December 2020) and the Chapter II prohibition of the Competition Act 1998.

Each sets of proceedings allege abuse of a dominant position by Amazon in the market for intermediation services on online marketplaces through the operation of its "Fulfilled by Amazon" and "BuyBox" features.

The CAT ruled that it would not be able to certify both sets of proceedings due to the overlaps between them.  It decided which set of proceedings should be allowed to continue to a certification hearing as a separate provisional issue.

 The CAT concluded that Mr Hammond was most suitable to act as the proposed class representative. It considered that the methodology submitted by Mr Hammond's expert was preferable as it more closely aligned the counterfactual to the alleged abuse.

However, this may not be the final resolution of the matter.  The CAT decided that Ms Hunter's application should be stayed, rather than dismissed. It could still proceed to a certification hearing on the event that Mr Hammond's application for certification were to fail or, if granted, be revoked.  It may even be that the two class representatives might join forces in the future to allow claims to be brought by as wide a body of claimants as possible.

The CAT made no ruling on which class definition was more appropriate, finding that it is not an issue to be determined in a carriage dispute.

Julie Hunter v Amazon.com, Inc and others and Robert Hammond v Amazon.com, Inc and others [2024] CAT 8