ROCHE DIAGNOSTICS LTD AGAINST GREATER GLASGOW HEALTH BOARD AND ANOTHER

Factual and Procedural Background

This case concerns a dispute about a public procurement process conducted by a public health board. On 1 August 2022, the health board issued an Invitation to Tender for a seven-year contract to provide a Laboratory Managed Service. Two companies submitted bids: the Plaintiff and the incumbent provider, Defendant B. The health board notified the Plaintiff on 24 March 2023 that its bid was successful, subject to contract finalisation and due diligence, and notified Defendant B that its bid was unsuccessful.

Following concerns raised by Defendant B’s solicitors about the procurement process, the health board reviewed the bids and reconfirmed the Plaintiff as preferred bidder on 15 May 2023. Subsequently, Defendant B commenced legal proceedings challenging this decision on 23 May 2023. In response, the health board conducted a further assurance review and on 28 June 2023 notified the Plaintiff of its intention to abandon the procurement.

Concurrently, the health board and Defendant B agreed in principle to extend the existing contract with Defendant B by 44 months, formalised by a modification notice on 22 August 2023. The Plaintiff initiated the present proceedings in late July 2023, contesting the lawfulness of the procurement abandonment and contract extension, seeking declaratory relief and damages under the Public Contracts (Scotland) Regulations 2015 ("the 2015 Regulations"). The Plaintiff also alleges unlawful means conspiracy involving both Defendants and claims damages against Defendant B for causing loss by unlawful means.

The procedural context includes ongoing document recovery disputes, with the Plaintiff challenging the defenders’ claims of legal privilege, without prejudice status, and commercial confidentiality over certain documents. The court convened a hearing to address the relevancy of the Plaintiff’s pleadings on unlawful means conspiracy and causing loss by unlawful means.

Legal Issues Presented

1. Whether the first Defendant’s decision to abandon the procurement procedure was lawful.
2. Whether the first Defendant’s decision to extend the existing contract with the second Defendant was lawful under the 2015 Regulations.
3. Whether the Plaintiff has pled a relevant case of unlawful means conspiracy involving both Defendants.
4. Whether the Plaintiff has pled a relevant case of causing loss by unlawful means against the second Defendant.
5. The relevancy and sufficiency of the Plaintiff’s averments concerning intention, knowledge of unlawfulness, and loss causation in respect of the alleged torts.

Arguments of the Parties

Plaintiff's Arguments

• The Plaintiff contends that the abandonment of the procurement and the extension of the existing contract by the first Defendant were unlawful under the 2015 Regulations.
• The Plaintiff alleges that the first and second Defendants conspired by unlawful means to extend the contract unlawfully, thereby causing the Plaintiff loss by depriving it of the contract award.
• The Plaintiff asserts that the second Defendant anticipatorily breached contractual obligations to provide services after 12 September 2023, thereby forcing the first Defendant to abandon the procurement and unlawfully extend the second Defendant’s contract.
• The Plaintiff submits that constructive intent to injure can be inferred from the fact that the Defendants should have known the unlawful extension would cause loss to the Plaintiff, referencing established case law on unlawful means conspiracy.
• The Plaintiff rejects assertions that the timing of the contract extension notice undermines the case, explaining that the formal extension implemented an earlier agreement in principle.
• The Plaintiff argues that knowledge of unlawfulness by the second Defendant is established by its participation in negotiations and awareness of contractual obligations.
• The Plaintiff maintains that the alleged anticipatory breach by the second Defendant is a standalone actionable wrong and that the first Defendant’s choice to extend the contract does not negate the unlawfulness of the second Defendant’s conduct.
• The Plaintiff asserts that the alleged unlawful acts interfered with the first Defendant’s freedom to contract with the Plaintiff, satisfying the dealing requirement for the tort of causing loss by unlawful means.
• The Plaintiff contends that the loss caused is the obverse side of the Defendants’ gain, satisfying the necessary intention element.

First Defendant's Arguments

• The first Defendant argues that the Plaintiff’s averments of unlawful means conspiracy are irrelevant, particularly due to the absence of any subjective intention by the first Defendant to injure the Plaintiff.
• The first Defendant submits that it is a public body whose primary intention was to ensure continuity of essential health services, not to harm the Plaintiff.
• The first Defendant contends that the alleged unlawful acts were caused by the second Defendant’s breaches, which provided the first Defendant with a just cause or excuse for its actions.
• It challenges the relevancy of the Plaintiff’s case on the lawfulness of the contract extension, arguing the dispute concerns the duration rather than the necessity of the extension, and criticises the lack of averments on what duration would have been lawful.
• The first Defendant relies on authorities cautioning against extending economic torts to cover acts wrongful only in a third party’s eyes and stresses the need for a high degree of blameworthiness.
• It submits that the Plaintiff’s averments fail to establish the necessary intention and that the first Defendant could not simultaneously be victim and conspirator.

Second Defendant's Arguments

• The second Defendant adopts the first Defendant’s arguments regarding the irrelevancy of the unlawful means conspiracy and causing loss by unlawful means claims.
• It submits that economic torts have been judicially restricted and that the Plaintiff’s averments fail to meet the essential elements, including intention and agreement to injure.
• The second Defendant argues that the alleged unlawfulness is one-sided, arising only from the first Defendant’s statutory duties, and that the second Defendant owed no obligations under the 2015 Regulations.
• It challenges the existence of an unlawful agreement, emphasizing that an innocent party entering a contract does not become part of an unlawful conspiracy.
• The second Defendant criticizes the Plaintiff’s pleadings as inconsistent regarding the timing of the contract extension agreement and abandonment of procurement.
• It argues the Plaintiff failed to aver that the second Defendant knew the contract extension was unlawful, relying on a dissenting judgment supporting this requirement.
• The second Defendant contends the Plaintiff has not sufficiently pled interference with the first Defendant’s liberty to deal with the Plaintiff, citing contractual provisions for transition services.
• It submits that the Plaintiff’s anticipatory breach allegations are inadequately supported and that the Plaintiff has not established an actionable wrong.
• The second Defendant challenges the sufficiency of the Plaintiff’s averments on causation, loss, and intention, arguing the causal chain is too convoluted to infer intent.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Kuwait Oil Tanker Company SAK v Al-Bader [2000] 2 All ER (Comm) 271	Ingredients of unlawful means conspiracy: agreement, intention to injure, unlawful acts pursuant to agreement, causation of loss.	Used to define essential elements of unlawful means conspiracy and to emphasize requirement of agreement and intention.
Moray Offshore Renewable Power Ltd v Bluefloat Energy UK Holdings Ltd 2023 SLT 623	Application of economic tort principles in Scottish law consistent with recent English authorities.	Confirmed that English case law principles apply in Scottish context for unlawful means conspiracy and causing loss by unlawful means.
OBG Ltd v Allan [2008] 1 AC 1	Definition of intention in economic torts; distinction between intended harm and foreseeable consequences; reluctance to extend torts to regulate fair competition.	Guided the court’s analysis of intention and blameworthiness, emphasizing constructive intent and the “obverse side of the coin” concept.
Revenue and Customs Commissioners v Total Network SL [2008] 1 AC 1174	Degree of blameworthiness required for liability in economic torts.	Referenced to assess whether the first Defendant’s conduct met the threshold for imposing liability.
JSC BTA Bank v Ablyazov (No 14) [2020] AC 727	Concept of absence of just cause or excuse in unlawful means conspiracy; unlawful means must be objectively directed at claimant.	Applied to evaluate whether the Defendants had just cause or excuse for their actions and whether the alleged conspiracy was actionable.
Racing Partnership Ltd & Ors v Done Bros (Cash Betting) Ltd & Ors [2021] Ch 233	Judicial trend to restrict economic torts; dissenting opinion on knowledge of unlawfulness requirement.	Considered in debate on whether knowledge of unlawfulness is required for unlawful means conspiracy; majority decision followed.
Secretary of State for Health v Servier Laboratories Ltd [2020] AC 959	Requirement that unlawful means affect third party’s freedom to deal with claimant in causing loss by unlawful means tort.	Used to assess whether the second Defendant’s conduct interfered with the first Defendant’s liberty to deal with the Plaintiff.
Cuadrilla Bowland Limited and others v Persons unknown [2020] EWCA Civ 9	Four elements of unlawful means conspiracy restated: unlawful act, intention to injure, agreement, actual injury.	Adopted for clarity on the elements required to establish unlawful means conspiracy.
Barclay Pharmaceuticals v Waypharm LP [2012] EWHC 306 (Comm)	Party to unlawful means conspiracy need not be the actor of unlawful act if party to agreement.	Relied upon to support argument that second Defendant’s participation in agreement suffices for conspiracy claim.
Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435	Definition of conspiracy as agreement to effect unlawful purpose causing damage.	Used to define conspiracy and the requirement of agreement to unlawful purpose.
Constantin Medien AG v Ecclestone and others [2014] EWHC 387 (Ch)	Requirement of intention in causing loss by unlawful means.	Referenced regarding intention element and sufficiency of evidence to infer intention.
Meretz Investments NV v ACP Ltd [2008] Ch 244	Commercial probity and legitimate reasons negating unlawful means conspiracy claim.	Used to argue that legitimate commercial reasons exclude liability for unlawful means conspiracy.
Belmont Finance Corpn v Williams Furniture Ltd (No 2) [1980] 1 All ER 393	Knowledge of unlawfulness not required for unlawful means conspiracy.	Followed in majority decision rejecting requirement for knowledge of unlawfulness.
Churchill v Walton	Knowledge of unlawfulness not required for unlawful means conspiracy.	Referenced in support of no knowledge requirement for unlawful means conspiracy.

Court's Reasoning and Analysis

The court proceeded on the basis that Scottish law on unlawful means conspiracy and causing loss by unlawful means aligns with recent English authorities. It applied the established four-element test for unlawful means conspiracy: unlawful act, intention to injure, agreement, and causation of loss.

The court found the Plaintiff’s pleadings sufficiently pled a relevant case of constructive intent, whereby the Defendants should have known that the unlawful extension of the contract would cause loss to the Plaintiff. The court rejected the first Defendant’s argument that its intention to maintain essential services negated intent to injure, emphasizing that economic interests encompass such objectives and that the Plaintiff’s loss was the “obverse side of the coin” of the Defendants’ gain.

The court also rejected the first Defendant’s and second Defendant’s submissions that the Plaintiff’s averments were irrelevant or immaterial because the extension was necessary or lawful in some form. The Plaintiff’s denial of necessity and lawfulness was accepted as raising a mixed issue for proof, not a basis for dismissal at this stage.

Regarding knowledge of unlawfulness, the court sided with the majority in Racing Partnership, holding that knowledge of unlawfulness is not a required element for unlawful means conspiracy. The Plaintiff’s averments that the second Defendant participated in negotiations leading to the unlawful extension sufficed to establish knowledge or constructive knowledge.

The court found no inconsistency in the Plaintiff’s pleadings concerning the timing of the agreement in principle and formal contract extension.

On the claim of causing loss by unlawful means, the court accepted that the alleged anticipatory breach by the second Defendant, communicated prior to negotiations, constituted an actionable wrong. The court rejected the second Defendant’s argument that contractual mechanisms for transition services negated interference with the first Defendant’s freedom to deal with the Plaintiff, holding that the Plaintiff’s averments sufficed to establish interference.

The court also found the Plaintiff’s pleadings on causation and loss relevant and adequately specified, rejecting the defenders’ arguments that the causal chain was too convoluted or that the Plaintiff failed to give fair notice.

Overall, the court concluded the Plaintiff’s pleadings on unlawful means conspiracy and causing loss by unlawful means were relevant and should be admitted to probation, allowing the claims to proceed to proof.

Holding and Implications

The court repelled the motions by both Defendants to exclude the Plaintiff’s pleadings on unlawful means conspiracy and causing loss by unlawful means. The court held that the Plaintiff’s averments were relevant and sufficiently pled to proceed to evidence and further procedure.

The direct effect of this decision is to allow the Plaintiff’s claims to continue to trial or further procedural steps. The court did not establish any new legal precedent but applied existing principles from English and Scottish law consistently with recent authorities.

Questions of the merits of the claims, including the factual findings and ultimate liability, remain to be determined at proof. The court reserved all questions of expenses pending further directions.