Introduction

The case of Roche Diagnostics Ltd against Greater Glasgow Health Board and Abbott Laboratories Ltd ([2024] CSOH 55) adjudicated by Lord Richardson in the Scottish Court of Session on June 5, 2024, centers on a contentious dispute in public procurement. Roche Diagnostics Ltd (hereafter "Roche") submitted a bid for a seven-year Laboratory Managed Service contract issued by the Greater Glasgow Health Board (the "First Defender"). The only competing bidder was Abbott Laboratories Ltd (the "Second Defender"), the incumbent provider of the services in question.

Roche was initially notified of its successful bid. However, subsequent actions by the First and Second Defenders led to Roche challenging the procurement process on grounds of unlawful abandonment and unjust extension of Abbott’s existing contract. Additionally, Roche alleged an unlawful means conspiracy between the First Defender and Abbott, aiming to deprive Roche of the contract award.

This commentary delves into the intricacies of the judgment, dissecting the legal principles applied, the precedents cited, and the potential ramifications for future public procurement disputes.

Summary of the Judgment

In this case, Roche Diagnostics Ltd brought forth claims alleging that the Greater Glasgow Health Board unlawfully abandoned the procurement process and unlawfully extended Abbott Laboratories Ltd's existing contract. Furthermore, Roche asserted that both defenders engaged in an unlawful means conspiracy to obstruct Roche's chances of securing the contract.

The Court meticulously examined the elements required to establish unlawful means conspiracy and causing loss by unlawful means under the Public Contracts (Scotland) Regulations 2015. After evaluating the arguments presented by both the pursuer (Roche) and the defenders (Greater Glasgow Health Board and Abbott Laboratories Ltd), Lord Richardson concluded that Roche's claims held sufficient relevance and plausibility to proceed to a more detailed examination in subsequent hearings.

Consequently, the Court repelled the defenders' motions to dismiss the claims, allowing Roche's case to advance pending further evidence and procedural directions.

Analysis

Precedents Cited

The judgment extensively referenced several landmark cases that define and influence the scope of unlawful means conspiracy and causing loss by unlawful means:

• OBG Ltd v Allan [2008] 1 AC 1: Established that intent to harm a claimant is necessary for unlawful means conspiracy.
• Kuwait Oil Tanker Company SAK v Al-Bader [2000] 2 All ER (Comm) 271: Clarified the elements of unlawful means conspiracy.
• Moray Offshore Renewable Power Ltd v Bluefloat Energy UK Holdings Ltd [2023] SLT 623: Further elucidated the requirements for establishing unlawful means conspiracy.
• JSC BTA Bank v Ablyazov (No 14) [2020] AC 727: Discussed the absence of a just cause or excuse in unlawful means conspiracy.
• Total Network SL [2008] AC 1174: Addressed the necessity of a high degree of blameworthiness in unlawful means cases.
• Barclay Pharmaceuticals v Waypharm LP [2012] EWHC 306 (Comm): Explored the knowledge element in unlawful means conspiracy.

These cases collectively shape the judicial understanding of the torts involved, particularly emphasizing intent, agreement, and the absence of just cause or excuse in such conspiracies.

Legal Reasoning

The Court’s reasoning hinged on deciphering whether the actions taken by the Greater Glasgow Health Board and Abbott Laboratories Ltd constituted unlawful means under the relevant regulations. Central to this was determining if there was an agreement to engage in actions intending to injure Roche, thereby fulfilling the elements of unlawful means conspiracy and causing loss by unlawful means.

Lord Richardson evaluated whether the extension of Abbott’s contract and the abandonment of the procurement process were orchestrated with malicious intent or merely as administrative decisions to ensure continuity of services. The Court scrutinized whether the actions were a means to an end that would inevitably cause harm to Roche, aligning with the "obverse side of the coin" principle established in OBG Ltd v Allan.

Furthermore, the Court considered the defenders' arguments regarding the absence of constructive intent and the presence of just cause or excuse, referencing JSC BTA Bank v Ablyazov's stance on the absence of such justifications undermining conspiracy claims.

Ultimately, the Court found that Roche's averments addressed sufficient elements of intention and causation, thereby warranting the progression of the case beyond preliminary objections.

Impact

This judgment has significant implications for public procurement practices and the application of economic torts within the public sector. By affirming the relevance and plausibility of claims involving unlawful means conspiracy against public bodies and incumbent suppliers, the Court underscores the necessity for transparency, fairness, and adherence to procurement regulations.

Future cases involving similar allegations can draw on this precedent to challenge procurement decisions perceived as biased or unlawfully influenced. Additionally, public authorities may need to reassess their procurement processes to mitigate risks of legal challenges based on conspiracy or causing loss by unlawful means.

Complex Concepts Simplified

Unlawful Means Conspiracy

An unlawful means conspiracy occurs when two or more parties agree to engage in actions that are unlawful with the intent to harm a third party. The essential elements include:

• An agreement between parties to perform unlawful acts.
• Intent to injure the plaintiff.
• The unlawful acts are executed as a means to achieve the intended injury.
• Resulting loss to the plaintiff due to these acts.

In this case, Roche alleged that the Greater Glasgow Health Board and Abbott Laboratories Ltd conspired to prevent Roche from securing the contract through unlawful contract extension and abandonment of the procurement process.

Causing Loss by Unlawful Means

This tort is established when a defendant uses unlawful means to cause loss to a claimant by interfering with the claimant’s business relationships. The elements include:

• The defendant's unlawful actions.
• Intent to cause loss or at least knowledge that loss is a likely consequence.
• The use of those unlawful means directly results in loss to the claimant.

Roche claimed that by extending Abbott’s contract unlawfully, the defenders caused Roche to suffer economic harm by preventing it from being awarded the contract.

Public Contracts (Scotland) Regulations 2015

These regulations govern the procurement processes of public bodies in Scotland, ensuring transparency, non-discrimination, and fair competition. Key provisions relevant to this case include:

• Regulation 28: Governs open procurement procedures.
• Regulation 72(1)(b): Outlines conditions under which contract extensions can be lawfully made.

Roche contended that the defenders’ actions breached these regulations, rendering their decisions unlawful.

Conclusion

The judgment in Roche Diagnostics Ltd v Greater Glasgow Health Board and Abbott Laboratories Ltd serves as a pivotal reference in delineating the boundaries of unlawful means conspiracy and causing loss by unlawful means within public procurement frameworks. By affirming the relevance of Roche's allegations and rejecting the defenders' motions to dismiss, the Court reinforced the imperative for public bodies to conduct procurement processes with utmost integrity and adherence to statutory regulations.

This case underscores the judiciary's willingness to scrutinize procurement decisions for potential conspiracies aimed at undermining fair competition. Public entities and incumbent suppliers must henceforth navigate procurement landscapes with heightened awareness of legal obligations and the ramifications of collusive conduct. The decision not only offers a pathway for addressing grievances in similar disputes but also fortifies the legal safeguards ensuring equitable public procurement practices.