AMEY OW LTD AGAINST NORTH LANARKSHIRE COUNCIL

Factual and Procedural Background

The Plaintiff, Company A, initiated a commercial action against the Defendant, The Council, challenging the latter's decision in March 2024 to award a contract for "Roads and Infrastructure Maintenance and Improvement Services" to Company B following a competitive procurement procedure with negotiation. The Plaintiff contended that the award breached several provisions of the Public Contracts (Scotland) Regulations 2015 and sought a declarator to set aside the award decision or alternatively damages amounting to £45,000,000. The Defendant sought an interim order under regulation 89(1)(b) permitting it to enter into the contract with Company B despite the ongoing litigation, which automatically suspended the contract award upon service of proceedings. The court granted commission and diligence for document recovery to assist in the dispute. The matter involves consideration of statutory duties under the Local Government in Scotland Act 2003 and the Public Contracts (Scotland) Regulations 2015.

Legal Issues Presented

1. Whether the Defendant breached its obligations under the Public Contracts (Scotland) Regulations 2015 by failing to act transparently and by not properly informing the Plaintiff about the procurement process and decisions (regulations 19, 85).
2. Whether the Defendant improperly used a "Should Cost Model" as an undisclosed award criterion in breach of regulations 19 and 30(23)(c).
3. Whether the Defendant erred in failing to exclude the successful tender as abnormally low or non-compliant, contrary to regulations 69, 87, and 19.
4. Whether the Defendant improperly scored the Plaintiff’s tender in relation to acceptance of contract terms, breaching regulation 19.
5. Whether the court should lift the automatic suspension imposed by regulation 89 to allow the Defendant to proceed with awarding the contract pending the outcome of the litigation.

Arguments of the Parties

Defendant's Arguments

• The Defendant acknowledged a prima facie case existed in relation to some grounds (notably grounds (c), (d), and (e)) but denied any breach in others (grounds (a) and (b)).
• The Defendant argued that damages would be an adequate remedy for the Plaintiff, whereas delay in awarding the contract would cause the Defendant irremediable financial and non-financial loss.
• The Defendant relied on established case law to submit that the balance of convenience favored lifting the suspension to avoid disruption to public services and economic projects.
• The Defendant maintained that the use of the Should Cost Model was consistent with its statutory duty to secure best value and was employed in accordance with Cabinet Office guidance, not as an undisclosed award criterion.
• The Defendant emphasized the public interest in proceeding with the contract award to avoid delays impacting statutory duties, social value commitments, and infrastructure projects.

Plaintiff's Arguments

• The Plaintiff contended that the Defendant breached regulation 19 and other relevant regulations by failing to disclose the use of the Should Cost Model as an award criterion, rendering the procurement process unlawful.
• The Plaintiff argued that the Defendant failed to act transparently, particularly by not informing tenderers of the award decision promptly and not providing sufficient information regarding the evaluation.
• The Plaintiff asserted a strong prima facie case that the successful tender was abnormally low and non-compliant and should have been excluded.
• The Plaintiff claimed reputational loss and that damages would be an inadequate remedy if the contract were awarded to another party before resolution of the dispute.
• The Plaintiff submitted that the balance of convenience favored maintaining the suspension of the contract award to preserve the status quo pending a quick resolution of the dispute.

Reply for the Defendant

• The Defendant reiterated that the Should Cost Model was used appropriately to ensure best value and not as an undisclosed criterion.
• The Defendant disputed the claim of reputational loss by the Plaintiff, arguing it was not supported by evidence and that delay in awarding the contract would cause irremediable harm to public services.
• The Defendant contended that the status quo was the existing suspension and that lifting it would allow the contract award to proceed as intended.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Shetland Line (1984) Limited v Scottish Ministers [2012] CSOH 99	Framework for lifting automatic suspension in procurement disputes balancing prima facie case, adequacy of damages, and public interest.	Adopted as a guiding model for assessing the motion to lift suspension.
Elekta Limited v The Common Services Agency 2011 SLT 815	Approach to interim relief considering strength of case, balance of convenience, and adequacy of damages.	Referenced in assessing whether the Plaintiff had a serious issue and adequacy of damages.
Clinical Solutions International Limited v NHS 24 [2012] CSOH 10	Public interest in procurement review and avoiding delay if challenge lacks reasonable prospect.	Supported consideration of public interest alongside other factors.
American Cyanamid Co v Ethicon Ltd [1975] AC 396	Principles for granting interlocutory injunctions: serious issue, adequacy of damages, and balance of convenience.	Used to frame the balance of convenience test in the context of lifting suspension.
Woods Building Services v Milton Keynes Council [2015] EWHC 2011 (TCC)	Requirement for award criteria to be clear, precise, and unequivocal; transparency obligations.	Supported Plaintiff’s argument on transparency and disclosure of award criteria.
OpenView Security Solutions Ltd v Merton London Borough Council [2015] EWHC 2694 (TCC)	Assessment of reputational loss and adequacy of damages in procurement disputes.	Guided court’s approach to Plaintiff’s claim of reputational loss and damages adequacy.
Medequip Assistive Technology Ltd v Kensington and Chelsea [2022] EWHC 3293 (TCC)	Consideration of serious issue to be tried, adequacy of damages, and balance of convenience in procurement cases.	Referenced for principles on serious issue, damages, and balance of convenience.

Court's Reasoning and Analysis

The court began by identifying the relevant statutory framework, including the Local Government in Scotland Act 2003 and the Public Contracts (Scotland) Regulations 2015, particularly regulations 19, 30, 57, 69, 85, 87, 89, and 90. It acknowledged the automatic suspension of contract award under regulation 89 upon service of proceedings and the court’s discretion under regulation 90 to lift that suspension after balancing benefits and negative consequences.

The court reviewed the parties’ submissions and relevant authorities from Scotland and England and Wales, notably the principles established in American Cyanamid and Shetland Line, emphasizing the need to assess whether a prima facie case exists, the adequacy of damages, and the balance of convenience including public interest considerations.

The court found that the Plaintiff had established a prima facie case in some respects but not a strong or compelling one, particularly rejecting the assertion that the use of the Should Cost Model constituted an undisclosed award criterion. The Defendant’s use of the model was deemed consistent with statutory duties and Cabinet Office guidance, used only to assess best value rather than as a formal evaluation criterion.

The court considered the Plaintiff’s claim of reputational loss but, relying on authority, concluded that such loss was unlikely to be significant or irreparable and thus did not render damages inadequate. The court also took into account the Defendant’s evidence of potential public interest harm, including delays in infrastructure projects, statutory duties, social value commitments, and increased costs if the contract award were delayed pending litigation.

Balancing these factors, the court determined that the negative consequences of maintaining the suspension outweighed the benefits, particularly given the public interest in efficient delivery of public services and economic projects. The court accordingly concluded that the suspension should be lifted, allowing the Defendant to proceed with contract award to Company B.

Holding and Implications

The court’s final decision was to GRANT the Defendant’s motion to lift the automatic suspension imposed by regulation 89 of the Public Contracts (Scotland) Regulations 2015, permitting the Defendant to enter into the contract with Company B pending the resolution of the litigation.

This decision means that the Defendant may proceed with contract award despite ongoing legal challenges, reflecting a balancing of interests that prioritizes public interest and the avoidance of disruption to statutory functions and infrastructure projects. No new legal precedent was established; rather, the court applied established principles governing interim relief and procurement disputes. The Plaintiff retains the right to pursue its substantive claims, including damages, but must do so without the benefit of suspending the contract award.