PLC Public Sector reports:
The Law Society recently scored a high profile victory when the High Court held that the tender process adopted by the Legal Services Commission (LSC) for its family contracts was “unfair, unlawful and irrational”. The challenge brought by the Law Society had been wide ranging, with allegations of “legal aid deserts” and breaches of equality legislation. However, reports suggest that the judgment was based on a failure to comply with technical procurement requirements and not any ideological opposition to the proposed cut in the number of firms given legal aid contracts. It is a decision that all contracting authorities should take note of, and not dismiss on the basis that it is confined to legal aid.
This is the second damning verdict for the LSC in a matter of weeks and (putting them simply) the key findings in this case appear to be that:
- For a tenderer to score maximum marks on the criteria for the award of family contracts it had to have a case worker that was a member of two different specialist family panels.
- It had neglected to inform the tenderers that this was the case.
On this basis alone, it appears that the court was faced with a relatively straight forward decision in light of the much publicised requirement for contracting authorities to disclose award criteria established in cases such as Lianakis and Newham. It also suggests that defending the claim was a questionable decision on the part of the LSC (its attempts to do so appear to have been given short shrift by the court).
There are two interesting issues that arise from the reported basis of this decision:
- Those with a vested interest (most notably the Law Society and existing panel members that were unsuccessful in the tender process) should note that this may be a stay of execution rather than an end to the matter. Nothing appears to have been reported that suggests that the concept of reducing the number of firms providing legal aid would be overturned if launched on the back of a compliant tender process.
- All contracting authorities must be aware that post-20 October 2010 (that is, the looming CSR), procurement challenges are likely to become even more common as firms desperate for a slice of shrinking public expenditure will be far less willing to accept a no. In this climate, any contracting authority seeking easy savings by cutting back on public procurement law advice runs the risk of operating on a false economy and actually increasing the number of challenges that it receives, which in turn may lead to an increase in costs and delays to any projects that survive the CSR axe.
In other public procurement news this week, three local authorities have announced that they have applied for judicial review of the government’s decision to withdraw funding from their Building Schools for the Future (BSF) projects. While there can be little doubt that Nottingham, Luton and Waltham Forest councils (and many others) have a right to feel aggrieved, they are likely to face a difficult task in arguing that the government’s decision should be set aside on the basis of legitimate expectation. As the recent case R(Grimsby Institute of Further and Higher Education) v Chief Executive of Skills Funding, highlighted:
- In almost all instances, for a claim of legitimate expectation to succeed it must be based on a “clear and unambiguous” representation.
- Any claim not founded on such a representation must satisfy the test of conspicuous unfairness; such cases are exceptional.
Given that this unsuccessful claim was only for wasted costs and the Institute did not dispute the withdrawal of the funding itself, it is clear that the bar for the three local authorities will be high.