Patrick Halliday secures lifting of suspension on contracts for healthcare in prisons

Cases

Practice Plus Group Health and Rehabilitation Services Ltd v NHS Commissioning Board

The High Court (HHJ Keyser QC) has ruled that the automatic suspension should be lifted in relation to contracts for healthcare in prisons.

The case concerns the procurement by the defendant (“NHS England”) of healthcare services in 11 prisons in the south-west of England.  The procurement was split into four lots, each covering a particular geographical area.  The collective value of the four lots is approximately £270m.

The claimant (“PPG”) is the incumbent provider for the Lot 3 and 4 services.  It lost the procurement competition for Lots 1, 3 and 4.  It started a claim under the Public Contracts Regulations 2015, challenging that result, and triggering the automatic suspension against entry into the new contracts with the winning bidder (“Oxleas”).

On NHS England’s application to lift the automatic suspension, PPG argued that damages would be an inadequate remedy for PPG on account of forthcoming reform of NHS procurement law.  Under a proposed new “Provider Selection Regime”, procurement of NHS services would no longer be governed by the Public Contracts Regulations 2015; and NHS commissioners would be permitted to award a new contract to an incumbent provider without a competitive procurement, if the incumbent is doing a sufficiently good job, and the service is not changing.  PPG argued that loss of the new contracts might prevent it from winning future contracts for these services, since the Provider Selection Regime will permit NHS England to award future contracts to the new incumbent (Oxleas) without a competitive procurement.  PPG argued that such a loss could not be compensated in damages, since the Court could not realistically calculate the probability of it occurring, and duration of the loss was unknowable.

The Court rejected those arguments.  It ruled that PPG’s arguments about potential loss of future contracts were too speculative to make damages an inadequate remedy for PPG.

The Court also held that damages would be an inadequate remedy for NHS England (since delay in signing the new contracts would prejudice the exercise of its public functions, which could not be compensated in damages); and, in any event, the balance of convenience favoured lifting the suspension (so as to avoid delay to improvements under the new contracts).

Patrick Halliday acted as sole counsel for NHS England (instructed by Katherine Calder and Joanne Dumphy of DAC Beachcroft).  PPG was represented by Sarah Hannaford QC and James Frampton.