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