Casenote: Automatic Suspension and Adequacy of Damages: Irish Court of Appeal Clarifies Rules in Context of Multi-Supplier Frameworks

• Ireland

• Other

14-02-2022

The Irish Court of Appeal recently considered the rules concerning applications made by contracting authorities to the Courts to lift the automatic suspension of contract awards which are triggered when a procurement decision is challenged.

In Word Perfect Translation Services Limited v Minister for Public Expenditure & Reform, the Court clarified the law in a number of important respects which will provide support to those seeking to challenge the structural aspects of framework competitions.

Word Perfect, a translation and interpretation services company, challenged various aspects of the procurement of certain multi-supplier frameworks (rather than any award decision itself). An automatic suspension of the award process came into play. On application by the Minister, the High Court initially lifted the suspension, however the Court of Appeal overturned this decision and reinstated the suspension pending the outcome of the full hearing of the case.

Unlike a typical scoring challenge by a second-ranked bidder, this was not a situation where the challenger would been clearly awarded a contract but for an error by the contracting authority. In the present case, it would be necessary to speculate how the contract would have been re-run without the aspects complained of and to consider the many variables involved in assessing whether damages would be an adequate remedy (one of the issues the Courts consider when deciding whether to lift a suspension).

The Court concluded that that there would be some complexity to assessing damages on a ‘loss of chance’ basis; this would be very difficult and would give rise to a risk of injustice. Also, there was not a ‘compelling urgency’ in the present case to proceed with contract award and on balance it would be better to preserve the suspension until the full case was heard.

In recent years there has been some reluctance among Irish contracting authorities to apply to have suspensions lifted, since the Courts made it clear that procurement breaches had to be ‘sufficiently serious’ before damages could be awarded. In the present case, the Minister conceded that any breach, if made out, would be sufficiently serious, which helped to persuade the High Court to lift the suspension initially. Although the authority was subsequently unsuccessful in the Court of Appeal for the particular reasons referred to above, we are likely to see similar concessions being made by contracting authorities and more applications to lift suspensions in the future.

For a more detailed review of the decision, please follow this link.