[Edit 27/08/10 An early version of this post said that the JR had been given permission. This was wrong. The hearing was actually adjourned to 8 September without permission having formally been given. Apologies for my error. I’ve edited the post to correct this.]

[Edit 2. I have been contacted by CLP to ask me to say that CLP will not be commenting while the case is ongoing, as it would not be proper for them to do so. They also ask that people do not contact CLP directly about the case in the meantime.]

So, what actually happened in the hearing of Community Legal Partnership’s application for judicial review? I’ve been thinking about the report in the Gazette and what was at issue.

Background
CLP put in a Social Welfare Law tender bid, as they operated in all social welfare categories. At the time of awards of contracts (or provisional acceptance of bids…) CLP did not get a contract of any size. It became clear that CLP had been given one point less in the scoring process than the small number of successful SWL bids in the Birmingham area. More on this one point later.

CLP appealed. However, the LSC insists that appeals could take up to a month to be considered. In terms of planning for the October start date, let alone retaining staff, a very difficult position.

JR
CLP issued a Judicial Review claim, initially in the Birmingham Administrative Court, After a preliminary hearing, the application was transferred to London for urgent hearing on 26 August.

The claim is apparently on the principle ground of the irrationality of the tender scoring criteria.

I should also mention that on 25 August, the LSC informed CLP that their appeal was unsuccessful.

In the absence of transcript , it appears that the hearing before Collins J became focussed on one particular ground, that of assessment and scoring by the LSC under the tender process.

The position of CLP was this: The one point difference in their ‘score’ was because the firm did not have 5 upper tribunal cases under welfare law. This was therefore the sole factor that meant that they did not have the same score as the few ‘top’ bidders awarded contracts.

CLP – via Counsel Marc Willers – argued that this was irrational, because they were being penalised for having been thoroughly successful in their lower tribunal cases – 90%, so that it was only if the Benefit Agency appealed that they would have an upper tribunal case. This had not happened 5 times. They were, in effect, being punished for being good and, indeed, efficient.

The LSC apparently argued that any challenge to the selection criteria and points process should have been made at a much earlier stage: “The tender invitation went out last year. If they wanted to argue about the criteria they should have done it then, not now.”

Of course, there were a lot of people very vocally unhappy about the criteria at the time. It is slightly surprising to find the LSC suggesting that it should have been judicially reviewed at that point, but hindsight is a powerful thing. It would also be likely to be the case that no-one on the bidding side expected that a one point mark on such a relatively minor issue would be the determinant between a full contract and no contract. The bidders generally lacked tender modelling software and the weeks to run permutations to assess these things.

In any event, Collins J was not impressed by the LSC’s argument, taking the view that:

Those tendering are entitled to take the view that access to justice criteria will be taken into account and discretion used, rather than just box ticking.

On the specific ‘box ticking’ exercise – the points award for upper tribunal appeals – Collins J appear to accept CLP’s argument wholly:

How can it be rational to penalise a firm that takes fewer cases to the upper tribunal, when any decent firm will do its best to make sure it doesn’t have to appeal? […]

If firms have a good record of ensuring they succeed in the lower tier tribunal, then appeals to the upper tribunal won’t be needed. To adopt a criteria which looks to the number of appeals to the upper tribunal and punishes those who do not need to appeal to it, because they are successful in the lower tier tribunal, is utterly absurd and totally irrational.

Thus, the LSC’s decision on this specific criteria was, on the face of it, totally irrational. On the significance of the rigid reliance on the criteria, Collins J observed to Counsel for the LSC:

There is ample evidence that this is a highly reputable and utterly efficient firm that is approved of by the judges, and you’re going to ruin it. You’re bringing it to an end as a result of this decision. How can you justify that? You can’t.

It was then put to the LSC whether a firm’s reputation could be taken into account or whether it was simply a ‘tick-box exercise’. The LSC responded that they had to comply with public contract law and could not exercise discretion.

Collins J set a date for the next hearing of 8 September. He warned the LSC to carefully consider its position as to fight and lose would set a precedent.

Collins J said:

I take the view that it’s not only arguable, but it would be difficult to dispute that the criteria relied on to mean this firm didn’t get a contract is totally irrational.

Comment
This is clearly a shot across the bows of the LSC in respect of this particular challenge, but – without benefit of transcript – what is going on here? My speculation follows.

Firstly – the specific criteria awarding an additional point for 5 upper tribunal cases is clearly in grave danger of being found to be irrational, for the very good reason that it potentially (and actually) penalises success. Even if the claim does not go to full hearing, this is now a clear and viable argument for others. So, I would anticipate that any provider that suffered on that specific point score would now be polishing up the pre-action protocol letters.

Secondly – and contrary to some suggestions I have seen elsewhere – this does not mean that Collins J is about to find the whole tender process to be unlawful. While the quoted comments about ‘tick box exercises’ and an ‘expectation that access to justice criteria will be used and discretion exercised’ suggest that the nature of the tender process tout court attracted Collins J’s ire, it is one hell of a leap from considering a specific assessment criteria to be (strongly) arguably irrational to finding the whole process flawed due to a lack of discretion.

One would have to say that the LSC might have a point if it asked what a reasonable process for assessing whether a bidder is ‘highly reputable’ and ‘approved of by the judges’ could possibly look like? And just how would it avoid endless challenges to any assessment of reputation?

So, if the claim did go to full hearing, my expectation would be for a specific finding of irrationality on the upper tribunal criteria but nothing broader. In this claim, at least.

But, of course, it cannot end there. The LSC are now between a very pointy rock and a buttock-squishingly hard place. To settle the JR would surely have to be to offer CLP a contract. But that would mean the exercise of a discretion that they have denied to themselves and denied to everyone else that they have. It would also leave them open to a challenge by any bidder that had suffered on the same criteria (and I know of at least one other). This is assuming that they have enough matter starts in their secret stash for this to happen without impacting the current ‘victors’ in the bidding. If not, then it is messy.

On the other hand, to continue to defend the claim is very clearly to risk having that specific criteria declared unlawful, which would mean – at the very least – having to withdraw and reassess all bids and contract offers in areas where this criteria was remotely a deciding factor. Which would mean practices who thought they had an award of matter starts seeing it vanish again for an undetermined period, as October draws ever nearer…

In any event, I would expect any provider affected by the ‘upper tribunal’ point score issue to be readying their challenge. I would also expect there to be much scouring of the point score system, in SWL but also in Family, for other areas where success and efficiency were effectively penalised in the scoring. The point has been clearly made.

August suddenly became very interesting.

One has to ask, though, why it falls on an individual firm to make this challenge and to take the risks that come with doing so. CLP are, of course, pursuing the challenge for themselves, not on behalf of the whole sector. The Law Society is pursuing a challenge in relation to the Family tender, but has been wholly silent on SWL. Given Collins J’s reported comments, can we expect anything at all from the Law Society?

But coming tomorrow, some actual housing related law. Honest.