The CLP challenge considered.

[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.

About Giles Peaker

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts, and still is Nearly Legal on Google +.
Posted in Housing law - All, Various (non-housing) and tagged , .

10 Comments

  1. Is it a water-tight argument to say because we have been involved in few Upper Tribunal cases it must mean we are being unfairly penalised for being successful in the lower tier tribunal? That would suggest that appeals can only be made by applicants being represented by CLP. It is possible to be the respondent to an appeal or to be appealing a decision which was only partially successful at the lower tier tribunal.

    Having said that, I am fairly sceptical as to what can reasonably be deduced about the quality of service provided by totting up the number of cases in any particular tribunal. Does it provide an incentive for solicitors in future to push for an appeal where otherwise it may be thought that the merits do not entirely justify such action?

    • JAC – no, that wouldn’t be watertight, but that wasn’t the argument made. The argument was that because of the demonstrable success rate (90%) at the the Lower Tribunal, they didn’t have that many Upper tribunal cases and those mostly where the Benefit Agency concerned appealed. I think that is pretty clearly set out in the post (just checked – yes it is).

      But I am in complete agreement on the dubious merits of awarding a point for x number of cases in a higher tribunal. Not so much for any prospective incentive to go for dodgy appeals, as who knows what the next contract assessment exercise will look like, but rather because it wasn’t applied consistently (why no extra point for High Court, Court of Appeal, Supreme Court cases?) and the inevitability that the number for a threshold would be wholly arbitrary (5? why 5?).

    • All at CLP would like to thank all those who have sent messages of support. It really bucks us up. We trust everyone will undersand the ‘radio silence’ given that this is ongoing court action.

  2. presumably the way out for the LSC [and hence the adjournment] is simply to come up with a few matter starts from their “verification exercise”

    • But the hurdle is awarding a contract. Once that is done, then yes, I’d presume matter starts could be found.

  3. by taking away matter starts from those with higher points/contracts they may lower the points threshhold needed to have one – so they take away just enough from the firms above to mean that they only need 35 points or whatever to get one – give them a contract and a few matter starts and the a/c manager quietly indicates that a bit later they can apply for more once they have used them all up….

    • I don’t think that is quite how it could work – the point scores were used to divvy up matters starts, combined with number of matter starts bid for, not the other way round. So ‘taking away’ matter starts from those awarded them wouldn’t affect the points threshold. In fact, the only thing I can see that might lower the threshold would be if the ‘winners’ reduced the number of starts they were tendering for. Of course, if there is a sizeable secret stash and the ‘winners’ can’t take on extra (or the LSC decides they can’t) then…

  4. Without a transcript its difficult to comment, but I’d have thought that delay was a particularly strong argument. Collins just swats it away without much reasoning. Why would one think that discretion would be used? I’m far from being an expert in EU public procurement law, but I’m pretty certain it doesn’t allow for a broad discretion as suggested by Collins.

    If so, why couldn’t the tender process have been challenged when it was announced? The challenge is to the tender process and not the award of the contract and the consequences of the tender process – or even only a small part of the tender process – being declared unlawful is huge with October now less than a month away.

    It is certainly arguable that relief should be refused on the basis of delay. I don’t think its as hopeless as Collins makes out.

    For that reason I’m still not convinced that the government (lets be honest the LSC is dead, it is the government making the decisions) will cave on this. Collins is right that losing would set a precedent, but so would settling.

    On another point I agree with NL that it is wholly unfair on CLP that it has been left to them to argue this. What is the Law Society for if it doesn’t stump up the cash for a decent silk for a challenge like this?

    • There’s a post with CLP’s statement now up.

      On the message this sends – you might think that, I couldn’t possibly comment

      There is apparently another SWL JR very recently issued. I have no further information on it.

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