Government's lack of transparency around PPE contract awards declared unlawful

United Kingdom

The Administrative Court’s recent decision in R (on application of Good Law Project & Ors) v Secretary of State for Health and Social Care [2021] EQHC 346 (Admin) highlights that while public authorities may have extensive powers, they are not at complete liberty to deal with the extraordinary circumstances of COVID-19 without regard to their obligations of transparency. Importantly the court recognised the standing of the First Claimant, the Good Law Project, to bring the claim in what was essentially a procurement claim (where the class of potential claimants is traditionally more limited).

The complaints against the Secretary of State for Health and Social Care

In 2020, following the onset of the global pandemic, the Secretary of State for Health and Social Care (the “SoS”) awarded contracts worth over £17 billion for the procurement of personal protective equipment (PPE) and other products required by keyworkers in the fight against COVID-19 in a process conducted pursuant to the Public Contracts Regulations 2015 (the “PCR”). The SoS had directly awarded contracts without advertising the contracts first, in reliance on powers that do not require prior publication due to unforeseen events requiring decisions to be made with extreme urgency. The SoS’ ability to do so was not challenged by the Good Law Project (the “GLP”), nor were any specific contracts challenged in this case. The claim related to the failure of the SoS to publish details regarding the contracts within 30 days as required under the PCR.

On 7 October 2020, the GLP and three individual MPs commenced judicial review proceedings challenging the SoS’ repeated failure to publish the contract award notices (“CANs”) or the details of the contracts on the Government’s Contracts Finder database within the applicable timescales. These included the publication timescales set out under (i) the PCR; (ii) the Government’s transparency guidance note relating to tenders and contracts from November 2017 (the “Transparency Policy”); (iii) the Government’s procurement policy note updating transparency principles from February 2017 (the “Transparency Principles”); and (iv) the Cabinet Office’s guidance on public procurement regulations and responding to the COVID-19 pandemic (the “Cabinet Office Note”). The Claimants also alleged that the numerous failures amounted to the SoS de-prioritising compliance with his transparency obligations, effectively a conscious “de-prioritisation policy”.

The Claimants sought a mandatory order requiring the SoS to publish any CANs or contracts to the extent he had not done so already, and declarations that the SOS had “systemically failed” to comply with transparency obligations under the PCR and relevant policies.

In his defence, the SoS maintained that:

  1. he did not have a published or unpublished de-prioritisation policy;

  2. while he admitted (multiple) breaches of the PCR by failing to comply with the time limits for publication set out in the PCR, in contrast, the Transparency Policy, Transparency Principles, and the Cabinet Office’s Note provided only ‘guidance’ on timescales for publication and were not strict time limits; and

  3. in any event, he had complied with the principles of the PCR and these policies, because by the time of the hearing the SoS had published nearly all CANs and details of the contracts.

Further, the SoS argued that the enormity of the burden on him to procure and deliver goods in the interest of public health and safety in light of COVID-19, weighed against the onerous nature of complying with the PCR and the various policies.

Standing

Perhaps the most important issue was whether the Claimants had standing to bring the claim.  Traditionally the class of permissible claimants for procurement claims under the PCR is more confined than in respect of other forms of judicial review. The SoS argued that the Claimants did not have standing because (i) they were not “economic operators” (that is bidders or potential bidders in the procurements) or otherwise entitled to relief under the PCR; and (ii) nor did they have a genuine interest in the SoS’ compliance with the PCR.

The Court recognised the GLP’s standing in the case, citing that there was a “powerful public interest in the resolution” of the issues raised given the gravity of the breaches in question and that economic operators could not be relied on to bring such a case.  GLP’s expertise in scrutinising government actions, and the lack of evidence that it was seeking to subvert the purpose of judicial review, all weighed in its favour.  Moreover, a claim for transparency like this was unlikely to be brought by an economic operator and so, if the GLP was denied standing, the obligation might in effect become unenforceable for the want of a plausible claimant.  The MPs by contrast did not have standing.

The SoS’ lack of transparency

The Claimants were unsuccessful in their claim that the SoS had a deliberate policy to de-prioritise transparency. The Court determined that the SoS’ evidence, which denied the existence of such a policy, must be accepted where it was unchallenged. The Claimants had not applied to cross-examine the SoS’ witness on this point (which is rare but not impossible in judicial review trials) and neither had they placed conflicting written evidence in reply before the Court.

The Claimants were successful in their claim that the SoS had further breached the Transparency Policy and Transparency Principles. The SoS had already admitted breaches of the PCR in respect of publication requirements. Citing R (Lumba) v Secretary of State for the Home Department [2011] UKSC 12, [2012], the Court held that the SoS was under a common law duty to comply with policies unless there was good reason to depart from them.  In this case, there was not even a decision to depart from them and the Judge held that the explanation given by the SoS amounted to an “excuse not a reason”.  Accordingly, the failure to comply with the policy was unlawful.

Relief

The Court emphasised that the transparency of public authority decision making was no less important during a pandemic and possibly even more important to maintaining public trust during such circumstances. It considered a mandatory order to be unnecessary given that by the time of the hearing, the SoS had published the vast majority of CANs and contract details, and there was no significant continuing breach. However, it did make a declaration to mark the illegality that had been found in the SoS’ conduct. In light of the Claimants’ failure to provide evidence beyond mere inferences of a ‘de-prioritisation policy’ it did not make declarations that the SoS had “systemically” failed to comply with his transparency obligations.

Comments

The facts in this case were unusual in that the Court took a generous approach in determining the standing of the GLP, and it remains difficult for non-economic operators to bring challenges under the PCR. Here, the Court focussed on the “powerful public interest in the resolution…of the issues raised” (given the high value of the contracts and the pleaded allegation – which ultimately was unsuccessful – that there was a deliberate policy of deprioritising transparency). Other factors that weighed in favour of the finding that the GLP had standing were the fact that this particular challenge in relation to transparency was one that an economic operator would be unlikely to bring, and the GLP’s sincere interest and expertise in scrutinising Government conduct in this area. It is therefore unlikely to pave the way for NGOs to bring PCR challenges, but a similarly unusual case may be similarly successful in future.

The decision also demonstrates how judicial review can be used to challenge the Government and other public bodies not only in respect of specific decisions, acts or omissions but also systemic practices or failures. On the other hand, the case arguably demonstrates the difficulties for a claimant in bringing more wide-ranging challenges where the documentary evidence required to prove the practice or failure may not exist or may be harder to identify despite the duty of candour on public bodies in such proceedings. Taking the unusual step (in judicial review) to cross-examine a defendant’s witness in respect of such allegations may have yielded the requisite evidence to succeed with such a challenge.

The Court also confirmed that failures to comply with policy must not only be explained after the fact, but also justified at the relevant time and drew the distinction between an “excuse” and a proper “reason”. However, had the SoS in this case shown that he had considered it necessary to depart from the policies or time limits, he may have been in a better position to defend any failure to comply with his transparency obligations.