Category Archives: Procurement

Pace and timing of adjudication did not deny natural justice

The courts will usually enforce the decision of an adjudicator.

There may be exceptions where a properly arguable case can be made out that there has been a breach of natural justice, or that the adjudicator lacked the necessary jurisdiction to reach the decision.

In CSK Electrical Contractors Ltd v Kingwood Electrical Services Ltd [2015], the defendant raised both challenges:

The natural justice challenge was based on the adjudicator’s timetable being too quick and therefore overstretching their resources.

This argument had been unsuccessfully raised in earlier cases.

The High Court said adjudication is a “rough and ready process” because it has to take place within a very strict timetable.

That often puts the responding party under particular pressure.

That was “a fact of adjudication life”. It is “inherent in the whole process”.

Here, the claimant testified that they had proper cash flow reasons for pursuing the claim at the time they did.

After all the importance of cash flow was the principle that underlies the adjudication process.

The timetable the adjudicator had set down made the best use of the 28 days that was available.

Though it took place over the Christmas/New Year period, the defendant had held the disputed invoices since the middle of November and so must have known what points it intended to make in the adjudication. Otherwise what was the basis for the defendant saying that the claims would be ‘strenuously defended’ on 18 December 2014? Also there had been no great complexity about the disputes between the parties.

The only real point of significance was whether or not the defendant had served on the claimant a valid “payless notice”. That was relatively straightforward and well capable of determination within the 28 days.

Lastly the defendant could have asked the adjudicator for further time but the defendant failed to do that.

That strongly suggested to the judge that this challenge was not based on something that was of great concern to the defendant at the time, but rather “on an attempted comb through the authorities on adjudication, to try and find a reason after the event for avoiding making payments to the claimant.”

So the defendant’s challenge to the adjudication, on this ground, was unsuccessful. Indeed it was on all the other grounds as well.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Planning authority’s multiple roles did not mean application was predetermined

Local planning authorities deciding a planning application may have more than one statutory role meaning that they are actually engaged in the project themselves in one or more different capacities.

Given the inevitability of this the courts are at ease with that multiple engagement so long as the local authority in its capacity as local planning authority (“LPA”) exercises its discretion genuinely and impartially.

In the High Court case of R (on the application of Khan) v London Borough of Sutton (2014), recently mentioned on this blog in another context, the LPA was also the waste disposal authority for the district.

In that latter capacity it had contracted with the “interested party” of the litigation for the interested party to provide a waste incinerator. In its capacity as the LPA, for the district, it then granted the interested party planning permission for it.

The claimant argued that the planning decision was not the result of planning considerations but was led by commercial considerations instead. These included the need to meet the targets set within the waste disposal contract which had meant that the LPA had not assessed the planning application “with an open mind”.

However the court said:

1. The council’s dual role as local planning authority and as waste disposal authority was authorised and required by Parliament under section 1(2) of the Town and Country Planning Act 1990.

2. The claimant had been merely inferring that the council’s discretion was inevitably fettered because permission was granted after the waste contract had been procured. Actually the claimant had failed to demonstrate a single act showing that the council’s discretion to decide the planning application had been fettered. In fact the council had throughout been sensitive to the potential for challenge on that ground and had taken all measures needed to make sure that their decision could not be challenged on that ground.

Additionally the court found evidence that:

1. The council were aware of the need to demonstrate openness and accountability in the council’s decision making process. That process was structured to ensure that it had and maintained a clear separation of its functions. The council had a differently constituted scrutiny committee which was able to hold the main committees including the development control committee to account. In this case the scrutiny committee had reported on the waste incinerator contract and given suggestions as to the way in which the planning application ought to be dealt with.

2. The planning performance agreement (“PPA”) the council had made with the interested party included, at paragraph 1.3, the statement that:

“Nothing in this agreement shall predetermine or prejudice the proper consideration or determination of any consent or application or override or fetter the statutory powers, duties or responsibility of any party”

thereby clarifying that by entering into the PPA the council was not fettering itself in its role as the statutory planning authority for the district.

So the court eventually dismissed the claimant’s challenge on predetermination of the application by the LPA as “quite hopeless”.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

ERDF Grant repayable due to an EU Procurement breach?

In the case which follows, there had never been any intention on the part of the Claimant to evade its responsibilities under the EU procurement processes. However, the EU requirements are demanding and the onus is on any grant recipient to get its own processes right.

In Mansfield District Council v Secretary of State for Communities and Local Government [2014] there was no open advertising of proposed procurement contracts for improvements to two Mansfield Railway Stations in the way contemplated by local EU guidance.

So the right to claw back European Regional Development Fund (“ERDF”) monies advanced for those purposes was triggered.

There was no evidence that the Claimant, as the recipient of the ERDF Grant, took any steps to investigate whether the proposed contracts “might potentially be of interest to suppliers located in other Member States”.

The justification now given was that the contracts were relatively small in the overall scale of things and were to be executed “in a remote part of North Nottinghamshire”.

The High Court could see why such a conclusion might have been reached, but the European Procurement guidance given required a conscious process to have been adopted conscientiously at the relevant time backed up by a suitable audit trail.

The Claimant’s failure to consider whether there was any realistic prospect of cross-border interest, and to consider the need for appropriate advertising for tenders, if it might exist, represented a breach of the EU procurement requirements.

No later justification for it could remedy that omission.

The penalty for the omission should remain at the Defendant clawing back 25% of the value of the contract that the Claimant placed for the works, as the guidance did not suggest any scope for departure from that figure here.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.