Case No: A3/2010/1226
Neutral Citation Number: [2010] EWCA Civ 1194
IN THE COURT OF APPEAL ( CIVIL DIVISION )
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE BRIGGS)

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Thursday 10th September 2010

Before:

LORD JUSTICE PILL
LORD JUSTICE RIMER
and
LORD JUSTICE SULLIVAN
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Between:

	Azam & Co Solicitors	
Appellants	
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Legal Services Commission	

Respondents	

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(DAR Transcript of 
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Mr Michael Bowsher QC and Mr Abdurahman Jafar (instructed by Azam and Co) appeared on behalf of the Appellants.
Mr Paul Nicholls (instructed by the Legal Services Commission) appeared on behalf of the Respondent.
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Judgment
Lord Justice Pill:

1.	This is an appeal against the judgment of Briggs J given on 5 May 2010 whereby he dismissed a claim by Azam & Co, a firm of solicitors ("the appellants") whereby they claimed a declaration that their exclusion by the Legal Services Commission ("the respondents") from a tendering process for the carrying out of publicly funded work in relation to immigration was unlawful.  The appellants also sought a mandatory order requiring the respondents to accept their tender and, in the alternative, damages for their exclusion from the tender process.  An alternative claim was made during the hearing before this court.  If the appellant succeeds, and succeeds only on what describe as the discretion point, the case should be remitted to the respondents for further consideration.  

2.	The respondents have now allocated most of the relevant immigration work, but the issue remains of practical importance because, if they succeed, the appellants will have the opportunity to seek work from what is known as "the residual list" of cases.  They could also pursue their claim for damages.

3.	A breach by the respondents of regulation 47 of the Public Contracts Regulations 2006 (SI 2006/5) ("2006 Regulations") is alleged.  Paragraph 47 provides, insofar as is material:

"1) The obligation on a) a contracting authority to comply with the provisions of these Regulations … and with any enforceable community obligation in respect of a public contract …

b) … 

is a duty owed to an economic operator.  

(6) A breach of the duty owed in accordance with paragraph (1) or (2) is actionable by any economic operator which, in consequence, suffers, risks or risks suffering, loss or damage and those proceedings shall be brought  in the High Court."

By virtue of Regulation 2 the appellants are an economic operator.  The respondents are a contracting authority.  

4.	Regulation 4(3) provides: 

"A contracting authority shall (in accordance with Article 2 of the Public Sector Directive) --

(a) treat economic operators equally and in a non-discriminatory way; and
(b) act in a transparent way.”

The respondents also accept that the decision they took must have been proportionate if it is to survive.

5.	The judge set out the basic facts and submissions of the appellants at paragraphs 2 to 5 of his judgment :

“2. Azam & Co is a firm of which Mr Shafiul Azam is the sole principal. At the time when the 2009/10 tender process was instituted, the firm was an existing supplier of publicly funded immigration services to the LSC pursuant to a Unified (Civil) Contract which will expire on 13th October 2010, and which represents the bulk of the firm's work. Azam & Co missed the deadline for submitting a tender for immigration work, namely 12 noon on 28th January 2010, and its application on 4th February 2010 for permission to submit its tender out of time was refused by the LSC. If the firm obtains no relief in these proceedings, it will later this year cease to be able to carry out publicly funded immigration work (save possibly in a very restricted field), with financial and professional consequences both for Mr Azam himself, and for his employed staff, which include other solicitors qualified in the same field, which may fairly be described as disastrous.

3. The firm's case is, in a nutshell, in two parts. First it claims that its failure to submit a tender before the deadline was itself caused by a failure of the LSC expressly to identify that deadline by any direct communication to the firm, and that this constituted a breach of the LSC's duties of equal treatment and transparency (imposed by Regulation 4(3)), breach of its enforceable Community obligation to give effect to a legitimate expectation of the firm that it would be directly notified and, more generally, breach of the LSC's enforceable Community obligation to comply with the principles of good administration. 

4. Secondly, the firm alleges that the LSC's refusal of an extension of time constituted a breach of the LSC's enforceable Community obligation to comply with the principle of proportionality, having regard to the serious commercial damage likely to be caused to the firm by a refusal, and the absence of any prejudice which would have been occasioned by the grant of an extension, in particular in the context that the firm's missing of the deadline was itself the result of the LSC's fault, rather than its own lack of reasonable care and diligence. 

5. It is common ground that if the firm were to establish any of its allegations of breach of duty against the LSC (together with any necessary causal link between that breach and the firm's predicament), then the appropriate outcome would be that the firm would be given time to submit its tender late. These proceedings have been directed to be determined urgently so as to ensure that (subject to the outcome of any appeal) the result will be known in time for the LSC to make an appropriate award of publicly funded immigration work to the firm before the progress of the tender process has reached a stage where that would be impossible.

The urgency referred to by the judge continues, and the court gives judgment this morning following yesterday's hearing.  

6.	At paragraphs 9 to 28 of his judgment, the judge set out the history of the relationship between the parties.  It is accepted that the narrative is accurate and it need not be set out in full.  The appellants first became a supplier of publicly funded immigration services to the respondents on 1 July 2003.  They were later offered General Civil Contracts to run from 1 April 2004.  In 2007 the appellants obtained a Unified Civil Contract, which was effectively an automatic renewal of the earlier General Civil Contract.  

7.	In October 2008 the respondents published on their website a consultation paper entitled "Civil bid rounds for 2010 contracts”.  It was sought to provide opportunities for both new and existing providers to compete for contracts.  On 30 November 2009 the respondents published on their website information by way of invitations to tender for immigration and asylum contracts from 2010.  A press release placed on the website at the same time identified the closing date for bids as 28 January 2010, as did the document previously mentioned.  Further, an advertisement was published in the Law Society Gazette referring to the forthcoming invitation to tender and also stating that the process would close at 12 noon on 28 January 2010.  

8.	The appellant's reaction or lack of reaction to those documents was described by the judge at paragraph 25 of his judgment.  He, that is Mr Azam, said that he had not noticed the July 2009 publication of the LSC's intention to extend the Unified Civil Contract for a further six months, nor did he or anyone in his firm either monitor the Law Society Gazette for publication of matters relevant to his firm's practice, still less study the advertisement pages where the LSC's advertisement of the immigration tender was placed.  For those reasons, neither he nor anyone in his firm became aware of the launch of the immigration tender for 2010 prior to receipt of the 23 December 2009 letter.  

9.	By a standard form letter to all existing providers, including the appellants, dated 23 December 2009, the respondents gave information in relation to the tendering process which they had set in motion.  The letter provided:

"We notified providers in July this year that we intended to extend the Unified Contract (Civil), which is due to expire on 31 March 2010, for a further six months. We have extended that period slightly, to six months and 2 weeks.

Please find enclosed formal notice of extension of your Unified Contract (Civil) under clause 2 of the Contract for Signature. This contract will now end at midnight on 13 October 2010. You do not need to take any action in relation to this extension and can carry on working as usual.

If you wish to undertake publicly funded civil work after 13 October 2010 in any category of law you must submit a tender(s), in response to our Invitations to Tender (ITT) by the applicable ITT deadline. The first ITTs, in relation to the Immigration category of law, were published on 30 November 2009 and 16 December 2009. ITTs for the remaining civil categories of law will be published from February 2010 onwards.

Full information on the tender processes and how to tender can be found on our website at www.legalservices.gov.uk following the path Community Legal Services > Tenders > Civil contracts for 2010.
We look forward to receiving your tender(s) in due course and continuing to work with you in the future.”

10.	The judge found that on visiting the website, the reader would have seen a timetable which identified the relevant deadlines for tendering for work including immigration.  In his evidence Mr Azam said that neither he nor anyone else in his firm carried out any systematic monitoring of the contents of the respondents’ website and did not subscribe to the respondents’ update service.  

11.	Mr Azam assumed that since the appellants’ contract was being extended until October 2010 there was no immediate need to do anything about it.  He assumed that the firm would receive a further letter from the respondents giving express notice of the relevant deadline, as had been done, he said, in relation to all previous civil and criminal contract renewals and other matters of importance arising out of existing contracts such as extensions.  Nothing was done about responding to the invitation to tender for immigration work until Mr Azam learned of the deadline during casual conversations with a professional colleague on 4 February 2010.  There is no evidence of any other existing or prospective provider of the services having failed to meet the deadline or having complained about it.  

12.	Mr Azam took immediate action. He sent an e-mail to an officer of the respondents, Mr Hatrick, at 21.42 on 4 February:

"Dear Mr Hatrick, I am totally stressed today; due to the fact that I missed the deadline to submit the Tender for the 2010 Standard Civil Contract -- Immigration. 

I have spoken to bravo solutions about the closing date for two other Tenders – ITT_15 and ITT_16 and have also checked in the website. 

I have submitted my two Tenders by completing ITT_15 and ITT_16 tonight at 9.30 pm. 

I have briefly explained that I missed the submission date of 28th January 2010.  I need your urgent help and guidance to submit the tender of which I missed the deadline. 

Kindly advise me on how I should rectify this situation."

13.	On the following day a relationship manager, though not the manager to whom the email had been addressed, replied by email:

"Dear Mr Azam 

I write to you as the relationship manager for Hackney & City firms.  

Unfortunately there exists no provision for accepting bids once the tender had closed. The reason for this is to ensure that all tenders are accessed within the context of standardised criteria."

14.	Mr Azam took prompt action by way of a letter dated 8 February to the respondents' Director of Policy.  That set out what had happened.  It made complaints, subsequently made at the hearing, and stated:

"In view of the fact that we acted promptly and the process has just closed, we do not feel the integrity of the process would be disaffected were you to allow us that opportunity."

Mr Azam supplied further information on the following day by letter.  

15.	It is accepted on behalf of the appellants that the letter of 12 February is the relevant decision letter.  The respondents are not constrained by the short and immediate e-mail response by a relationship manager on 5 February.  The letter, which is signed by a legal adviser to the respondents, referred to the decision under challenge, namely:

“The Commission's refusal to consider an out of time application by the Claimant concerning the Commission's Invitation to Tender to deliver Publicly Funded Immigration Services in respect of the 2010 Standard Civil Contract."

The respondent's responded:

"We are afraid that the Commission cannot accept an out of time application from you and does not consider that that decision is susceptible to judicial review as you suggest, for the reasons set out below."

There is then a long explanation.  Reference is made to the 2006 Regulations:

"The Commission is satisfied that it has conducted the tender in question in accordance with the relevant law, and in particular the Public Contract Regulations 2006, insofar as they concern Part B services contracts.  In this context the Commission's obligations are broadly that it treats economic operators equally and that it acts in a transparent way, its obligations to advertise being limited (where, in any event, the Commission had advertised the tender in the Law Society Gazette on 19 November 2009 and on its website)."

The writer dealt with the claim that the appellants had a legitimate expectation of receiving further information.  The letter continues:

"The tendering process was governed by the terms and conditions in the information for applicants (IFA) which was publicised by a range of methods. The Commission was obliged to treat all tenderers equally and to conduct the process in a transparent way.  To do otherwise for your firm would be unfair towards other applicants and reduce the transparency in the process.  

The appropriate comparator for the purposes of procurement law is the communication to the whole class of other potential tenderers, not just existing suppliers.  Judged on this basis your firm has not been treated any differently from other applicants."

European authority was cited.  The letter continued:

"Thus, all entities which are in a comparable position in terms of their ability to participate in the procurement exercise must be treated equally.  If some already have contracts to work for a public authority, this is not, in itself, a reason for different treatment, all [emphasis in the letter] tenderers must face the same conditions"

Reference was then made to Commission v France [2000] ECHR 1-8315 and to the decision of the European Court of Justice in Commission v CAS Succhi di Frutta SpA [2004] ECR 1-381/01.  I will refer later to that case.  The letter continued: 

"When viewed in the context of the procurement exercise as a whole, the Commission has treated your firm no worse than it treated the class of potential tenderers for the delivery of Publicly Funded Immigration Services in respect of the 2010 Standard Civil Contract. 

It is not for the Commission, after the tender has closed, to evaluate the overall pros and cons of awarding your firm a Contract out of time.  Indeed, it would be inappropriate, in the context of a nationwide procurement exercise, governed by the Terms and Conditions of Tender, set out in the IFA, for the Commission to embark upon such an exercise now.  

In conclusion, the Commission does not consider, for the purposes of judicial review, that its approach could properly be said to disclose any error  of reasoning on its part, let alone an error that would make its decision one which no reasonable decision-maker could have reached having regard to all the circumstances."

16.	I referred to earlier findings of the judge. The judge then considered the respondents' refusal to extend the deadline and acknowledged the harsh economic consequences for the appellants of a failure to do so.  Having done that, he gave reasons why there were weighty considerations to the contrary.  Paragraph 70: 

“But that analysis ignores the weighty reasons to be considered in the balance against the grant of a week's extension.  First, the immigration tender process had been published expressly on the basis that deadlines were there to be complied with, and that no extensions would be given. Secondly, the grant of an extension to the firm, occasioned by a failure to submit a tender on time which was by no means beyond its control, would run the grave risk of constituting unequal treatment of other tenderers. In particular, it would be likely to be regarded as unfair by tenderers who would have wished for longer time in which to perfect their tenders, but who nonetheless completed them on time and, in reliance on the warning that extensions would not be granted, sought no further time for themselves. Thirdly, it seems to me that the principles of transparency and good administration weigh very heavily in the balance against an applicant for an extension of time who is unable to point to reasons beyond his control by way of justification.”

The judge concluded at paragraph 71:
	
"…it was not a breach of the LSC's obligation to respect the principle of proportionality for it to refuse the requested extension."

The judge found that the claim wholly failed "but not without considerable sympathy for Mr Azam and his staff", sympathy which, I add, I share.  The appellants had failed "to take a proper care in the furtherance and protection of its own interests". There was no breach of duty by the respondents.

17.	In the Grounds of Appeal it is submitted that the respondents as a public body were in breach of duty in failing to give direct notification to the appellants of the deadline for the submission of tender.  The appellants had a legitimate expectation that they would be notified of the deadline and the refusal to consider the tender submitted shortly after the expiry of the deadline was not proportionate.

18.	The appellants take the further point in this appeal that, in making their decision not to accept the tender, the respondents failed to recognise and to exercise the discretion they had to extend the period for tender, a decision-making process, it is submitted, which did not include consideration of whether to exercise the discretion was unlawful.  

19.	The appellants rely on the terms of their existing contract with the respondents to demonstrate a duty on the part of the respondents to notify the deadline for tenders in terms (clauses 2.1 and 2.2).  Clauses 2.1 and 2.2 provide that the parties "agree to work together in mutual trust and cooperation" and the respondents state that they would act "in good faith" and as a responsible body.  The earlier contract provided that the respondents would appoint a relationship manager to the appellants with a responsibility for working closely with them and, among other things, providing better information to help them plan their future and develop their legal aid businesses.  

20.	The appellants rely on the consultation response of June 2009, which provided: 

"We now have to balance two priorities: ensuring that current legal aid services are not disrupted through the civil contracts bid round at a time when demand for civil legal services is high; whilst encouraging new entrants into the market."

It was stated at 5.1 of the document:

"In accordance with EU procurement legislation, we are required to run a process that enables new entrants to bid for contracts as well as existing providers.  We therefore cannot guarantee contracts to those already delivering services.  In developing a procurement process we have considered how we can best ensure that providers are in a position to deliver a full service from the start date of the contract.  This requires recognition of those already delivering LSC services but also those with a track record in delivering comparable services to allow new entrants access to the market. We are still developing the details of the process and the precise criteria will be set out in the tender documentation."

A press release of 31 July 2009 stated that the respondents would keep providers and stakeholders informed of developments.

21.	For the appellants Mr Bowsher QC submits:
1) The history of the relationship between the parties was such that the appellants were entitled to express notification of the deadline for tenders.  It could not be assumed that they, as existing suppliers, would look for advertisements or on the website in relation to tenders.  
2) The letter of 23 December 2009 was defective in failing to state the deadline and in giving the impression that a deadline may not have been fixed.  The expression "in due course" gave a false sense of security, suggesting that no early action was required.  It is further submitted that the decision letter of 12 February 2010 was defective, first in failing to exercise the discretion, which the respondents undoubtedly had, to grant an extension, and secondly in failing to have regard to the principle of proportionality.  It was disproportionate not to grant the short extension of time required. It is not suggested that having a deadline for this tendering process was in itself disproportionate.

22.	Both Mr Bowsher and Mr Nicholls, for the respondents, refer to authority.  In SIAC Construction Limited v Mayo County Council [2002] IESC 39, the Supreme Court of Ireland, in the Republic of Ireland, Fennelly J referred, at paragraph 84, to "the principles of equality, transparency or objectivity" in this context.  Where a failure is clearly made out "there is of course no question of permitting a margin of discretion.”  At paragraph 81, Fennelly J stated:

“The function of the courts is to guarantee legality, though that notion itself has a number of elements, some procedural and some substantive."

23.	In Commission v CAS Succhi di Frutta SpA, mentioned by the respondents in the letter of 12 February 2010, the court stated, at paragraph 111:

"The principle of transparency which is its corollary [having considered the principle of equal treatment] is essentially intended to preclude any risk of favouritism or arbitrariness on the part of the contracting authority.  It implies that all the conditions and detailed rules of the awards procedure must be drawn up in a clear, precise and unequivocal manner in the notice or contract documents so that, first, all reasonably informed tenderers exercising ordinary care can understand their exact significance and interpret them in the same way and, secondly, the contracting authority is able to ascertain whether the tender submitted satisfy the criteria applying to the relevant contract."

24.	In R (Law Society) v Legal Services Commission [2008] QB 737 Lord Phillips of Worth Matravers CJ, giving the judgment of the court, stated, at paragraph 40:

"The Directive and the Regulations are concerned with the award of contracts by public authorities.  Their objective is to open up public procurement to competition.  To this end the award of contracts must comply with the principles of equal treatment, non-discrimination and transparency.  Technical specifications must clearly set out the requirements of the authority so that the tenderers will be aware of what they will be required to do under the contract for which they are tendering. This is an application of the principle of transparency."

25.	In Leadbitter and Co Ltd v Devon County Council [2010] ELR 61, [2009] EWHC 930 (Ch), the issue was whether the tender rules in that case had been drawn and applied in ways which were transparent and which ensured equal and non-discriminatory treatment that was proportionate.

26.	David Richards J stated, at paragraph 56, in relation to the waiver of terms and having referred to European authority: 

"Secondly, a waiver of terms which are stated as applying without exception is a departure from the terms of the procurement process and is therefore an exceptional course. A waiver of such terms carries the very risks of unequal treatment, discrimination and a lack of transparency which the contracting authority is required to avoid. It is to be noted that the Commission's action under review in Tideland Signal involved a failure to exercise an express power under the invitation to tender, not a failure to waive express terms."

27.	David Richards J expressed his conclusions at paragraph 66 and following: 

"Fundamentally, Devon CC relies on the simple proposition that a procurement process requires a deadline for the submission of tenders and that a deadline is a deadline. The ITT could not have been clearer on the requirement for a single upload and submission before the deadline, and the claimant's witnesses readily accepted that they knew this was the requirement. In addition, there are clear statements of policy and practice in Devon CC's code of business conduct that both tenders are not considered. True it is that the deadline was extended for three hours to accommodate a particular tenderer, but the extension of the deadline was agreed before the expiry of the existing deadline, it was caused by an event outside the control of the tenderer in question, it applied to all tenderers and was communicated to them all, and complete submissions had to be made by the new deadline."

28.	In paragraph 68:

"There may be circumstances where proportionality will, exceptionally, require the acceptance of the late submission of the whole or significant portions of a tenders, most obviously where, as noted by Professor Arrowsmith, it results from fault on the part of the procuring authority. But in general, even if there is discretion to accept late submissions, there is no requirement to do so, particularly where, as here, it results from a fault on the part of the tenderer. In addition to the considerations already mentioned, the particular facts on which the claimant relies to characterise its case of exceptional would require investigation and determination by Devon CC and I do not see that it was required to undertake those tasks. In my judgment, the decision of Devon CC to reject the claimant's tender was well within the margin of discretion given to contracting authorities."

The reference to Professor Arrowsmith is to his publication, The Law of Public and Utilities Procurement, 2005, paragraphs 7 .94 to 7.96.  

29.	Mr Nicholls relies strongly on the approach taken by David Richards J in Leadbitter which, he submits, reflects the approach of the European Court of Justice to this issue and the approach in domestic courts.  

30.	I am entirely unimpressed with the claim based on legitimate expectation.  I acknowledge the working relationship which had developed between the parties since 2003, including the respondents' appointment of a relationship manager.  As an existing provider, the appellants received the letter of 23 December 2009: the letter is plain; it refers to the need to submit a tender; it states where full information of the tendering process can be found and it looks forward to receiving a tender in due course.  That was a sufficient notification, making full allowance for earlier dealings between the parties. The appellants had no legitimate expectation that a further letter, or any further information, would be given to them prior to the deadline for receipt of tenders.  The submission that different treatment was required to achieve equality for the appellants is without merit.

31.	The respondents plainly had to take care -- and this applies also to the proportionality challenge -- that individual tenderers, or prospective tenderers, were not being given favourable treatment, and that applies where the suggestion could be that it was an existing provider who has the advantage of earlier dealings who was given that advantage.  

32.	On the discretion point Mr Bowsher relied on paragraph 71 of the judgment:

"It appears that the LSC told Mr Azam at the time that it was unable to grant an extension, rather than that, having considered the matter as one of discretion, it had decided that it ought not to do so. For the reasons which I have given, related to the essentially objective nature of any question as to breach of duty under Regulation 47 (by comparison with the different considerations which might have affected a challenge based upon the principles of domestic administrative law) that way of communicating the LSC's refusal to the firm is of no legal consequence in these proceedings."

33.	If the judge was saying in paragraph 71 (and the expression “objective analysis” also appears in paragraph 42) that it did not matter whether the respondents followed a lawful decision-making process, I respectfully disagree.  The allegation that they did follow an unlawful decision-making process merits consideration, because, if it was defective, a reconsideration may be required.

34.	I do not accept that there was a legal error in the decision-making process.  The rules of tender had been drawn up; the significance of the deadline was stated.  In a detailed letter the respondents explained the importance of their duty to adhere to the principle of equal treatment.  A three-page letter would not have been necessary if the application for an extension of time had not been considered.  Mr Bowsher seeks to rely on the words, that it is not for the respondents: 

"to evaluate the overall pros and cons of awarding your firm a contract at the time."

He submits that the wording indicates that the respondents did not give the application the attention it required.  He submits that it demonstrates a refusal to consider whether exceptionally an extension should be granted.  

35.	The expression must, however, be read in the context of what surrounds it -- a reference to a nationwide procurement exercise governed by terms and conditions, and a claim that it was not a decision which no reasonable decision-maker could have reached having regard to all the circumstances.  No exceptional circumstances have been mentioned in the letter of 8 February or that of 9 February.  There was no denial by the respondents of a power to waive the deadline, and the several pages of reasoning demonstrate that the  application was addressed and that there were good grounds for not acceding to it or considering it further.  

36.	As to proportionality, the judge acknowledged the "harsh economic consequences of the inability to tender" as expressed at paragraph 70.  However, he gave "weighty reasons against the grant of an extension".  I agree with those reasons.  The decision not to permit an extension was not, in the circumstances, disproportionate.  I have already read paragraph 70 of the judgment where the reasons are set out.  These are put as an objective test, but it is clear, in my judgment, that the relevant considerations were kept in mind by the respondents.  I also agree with the approach of David Richards J in Leadbitter and I accept that it reflects the earlier authorities.  A deadline is a necessary part of a tendering process.  The deadline was plainly stated in readily accessible documents.  There is no fault by the respondents; they needed to be conscious of their duty to treat tenderers and potential tenderers equally and to avoid suggestions of favouritism towards a particular party.  The failure to tender arose from a single and very unfortunate failure, though against the background of a failure by Mr Azam and his firm to monitor what would seem to be documents sensible to be monitored by a firm doing this type of work, it was the failure to take action on the receipt of the letter of 23 December.  The need for an extension could not be attributed to any fault on the part of the respondents or to any factor outside the control of the appellants.  

37.	I would add that there was, on the material placed before the court, also a potential prejudice to other tenderers in granting an extension permitting the appellants to tender.  I mention that because the judge did not attach importance to that aspect of the case, save in terms of time for preparation of bids.  We have been referred to evidence showing that the number of bids for new matters in London exceeded the available work by a factor of approximately three.  Those ranked lower on the list of acceptances, assuming that the appellants would have been accepted, would have obtained fewer cases than if the appellants were not present on the list and would therefore have been prejudiced by their presence.  This also applies to the residual list for which the appellants could have applied if the appeal were to be allowed.  

38.	The judge did not have regard to this aspect of the case.  Acknowledgement of it appears to me to be a part of the duty to treat tenderers equally.  A tenderer who is granted an extension of time, notwithstanding the terms of the tender, may well affect adversely the position of other tenderers.  My comments in relation to bids and ranking are not, however, essential to the conclusion I have reached.

39.	I repeat that I find no error of law in the respondents' approach and decision. The appellants were in no worse position than other tenderers because the deadline was not mentioned in the letter.  It is most unfortunate that a firm of solicitors, whose competence and experience in the relevant field is not in doubt, and where the consequences may be disastrous for the firm, were deprived of the opportunity to tender for publicly funded immigration work.  They are, however, entitled to relief only if they can establish an error of law by the respondents, and, with reluctance, notwithstanding the persuasive submissions of Mr Bowsher, I am unable to find such an error.

40.	For those reasons, I would dismiss this appeal.

Lord Justice Rimer:

41.	I too would dismiss the appeal. I doubt if anyone familiar with the facts of this case could fail to have the greatest sympathy for Azam and Co (“Azam”) for the seriousness of the consequences that it faces as a result of its omission to respond to the tender invitation from the Legal Services Commission (“the Commission”) by the deadline of 28 January 2010. Speaking for myself, that sympathy is in no way moderated by the fact that -- as I consider the judge fairly assessed -- Azam was "extraordinarily careless" in not responding to the letter of 23 December 2009 in the way that it plainly invited, namely by promptly informing itself of the tender process to which it referred by following up the directions to the Commission's website and submitting its tender by the deadline of 28 January 2010 that such exercise would have disclosed. Despite Azam's arguments to the effect that it was entitled to expect a further communication from the Commission informing it of the deadline by which it had to respond to the tender invitation, I suspect that if Mr Azam can bring himself to re-read the letter of 23 December 2009 with the objectivity which, as a solicitor, I am sure he customarily applies, he will recognise that the firm's failure to respond to it was an obvious and very unfortunate mistake.  

42.	Azam's arguments to us, as to the judge, fell into two linked halves. The first was directed at the proposition that the requirements imposed upon the Commission by the Public Contracts Regulations 2006 to treat economic operators equally and non-discriminatorily and to act in a transparent way, were collectively features that also required it to state expressly in the letter of 23 December 2009 that the deadline for tenders was 28 January 2010. It was also a material part of Mr Bowsher QC's argument that the special relationship that was said to exist between the Commission and Azam as one of its existing suppliers itself imposed upon the Commission the duty to state the deadline.  

43.	Had the Commission done so, it would obviously have been helpful both to Azam and to other existing suppliers to whom like letters were sent and who did not already know the deadline. Mr Nicholls submitted that for the Commission to have done so would have been to give preferential treatment to existing suppliers as compared with potential suppliers and so would have put it in breach of regulation 4(3) of the 2006 Regulations which required it to treat all economic operators equally and in a non-discriminatory way. I was not convinced by that argument and would not accept it.  The crucial question, however, is whether the omission so to state the deadline put the Commission in breach of one or more of its obligations under the Regulations or else made the letter - construed in the light of the special relationship which Mr Bowsher said existed between Azam and the Commission – unfairly misleading.

44.	As to that, I found Mr Bowsher's submissions on this aspect of the case insufficient to make good the attack on the letter because, as I consider the judge rightly concluded in paragraph 57 of his judgment, no careful and diligent solicitor reading it could reasonably have been left with any expectation that he would receive a further letter relating to the tender process or, in particular, a further letter explaining to him the date of the deadline referred to in the third paragraph of the letter.  The letter was clear. It told the recipient solicitor that if he wished to undertake publicly funded work after 13 October 2010 he must submit a tender in response to the Commission's ITT "by the applicable ITT deadline". It explained that the ITT in relation to immigration work had been published some few weeks earlier. It explained that information about the tender process and how to present a tender could be found on the Commission's website, and it explained the path that a proposing bidder had to follow in order to find out about the process. It concluded by saying that the Commission: 

"[looked] forward to receiving your tender(s) in due course and continuing to work with you in the future."

45.	The information in the letter was all that a proposing bidder needed to know in order to take steps to be able to present his tender in time. No diligent reader of the letter could have derived from it that he could safely ignore it and do nothing until he received a further letter from the Commission about the tender process.  In my judgment, Azam's failure to follow the guidance in that letter as to that process, and in consequence its failure to learn of the tender deadline, was its own fault, and I would reject Mr Bowsher's submission that the Commission contributed to that failure.

46.	The second half of Mr Bowsher's submission went to whether the Commission should have extended Azam's time in presenting its bid. The tender conditions provided expressly in condition 11.2 that tenders would not be accepted if submitted after 12 noon on 28 January 2010 and that the Commission would not consider requests for any extension of time. It was, however, common ground between both sides that, despite that ostensibly inflexible provision in the tender conditions, the principles of proportionality would require the Commission to extend time in any case in which the strict application of that provision would be disproportionate.

47.	Mr Bowsher's submission was that the Commission's email of 5 February 2010 and its letter of 12 February 2010 showed that it had in effect closed its mind to any consideration of whether it could, might or should extend Azam's time for presenting its bid, whereas the Commission was, he said, under a duty to exercise its discretion as to whether or not to extend time. He said that if it could be shown that, had the Commission properly exercised its discretion it would have been open to it to admit a late bid from Azam, that would be sufficient to entitle Azam to succeed in its present claim. His further submission was that the considerations of proportionality positively required a conclusion that Azam's time should have been extended.

48.	That submission depended in part upon the correctness of the submission that the Commission was, by reason of its alleged shortcomings in relation to the letter of 23 December 2009, itself, at least in part, the cause of Azam's failure to meet the deadline. I have rejected that submission and so it does not assist Azam in the context of Mr Bowsher's further submission, although I would agree with him that, had Azam been able to demonstrate that its timing problems had been caused or contributed to by the Commission, that would have been a compelling factor to bring into consideration when considering whether or not it was disproportionate for the Commission not to accept Azam's late bid. Otherwise Mr Bowsher relied upon assertions that, having regard to the particular nature of the bidding competition in question, the admission of a late bid by Azam would not give it any material competitive advantage over other bidders who had presented their bids in time. Indeed, he said that the effect of admitting Azam's late bid would have had but a negligible effect on the other bidders, whereas the effect of not admitting it would have a serious effect on Azam. It was also said to be consistent with the objective of the competition for which tenders were invited that good firms like Azam should be given the opportunity to continue to bid for the right to continue to provide the services they had been provided.

49.	Mr Nicholls' contrary submission on behalf of the Commission was that it was strictly inaccurate to regard the tender conditions as conferring any discretion upon the Commission as to whether or not to extend the time for any particular tenderer to present his bid. The rules provided for no such discretion. The position was, he said, simply that they had to be applied according to the letter unless the requirements of court proportionality compelled a departure from them.  He accepted that there can be exceptional cases in which they will.  The rationale for such cases is that the tenderer who requires such treatment is not in a comparable situation to other tenderers, and so the application to his case of exceptional treatment will involve no violation of the principle that all tenderers must be treated equally.

50.	I am not sure that that way of putting the position is a complete answer to Mr Bowsher's submission that the impact of the proportionality issue required a considered thought process on the part of the Commission as to whether or not the late bid should be admitted. But the letter from the Commission of 12 February 2010 did, in my judgment, set out fully the Commission's reasons why it considered that there was no justification for any extension of the time limit.  Furthermore, I agree with Mr Nicholls that, whatever the Commission's thought process on this topic in early February 2010, the question of whether or not it was disproportionate for the Commission to deny Mr Azam a time extension is a question which focuses on the outcome of the Commission's decision and is therefore one for the decision of the court; and Mr Nicholls advanced cogent submissions to the effect that, on the facts of this case, it cannot possibly have been disproportionate for the time extension to be refused.  

51.	This was, said Mr Nicholls, and I agree, not a case in which the overlooking of the deadline was anyone's fault but Azam's. It was a straightforward and wholly unexceptional case in which a proposing bidder had simply overlooked the deadline. If an extension ought to have been granted in this case, then Mr Nicholls said it would be difficult to see why it should not be granted to anyone who overlooked the deadline and sought an extension, an approach that would effectively emasculate the deadline condition. Moreover, the vice in Azam's case was that it necessarily involved a violation of the principle of equality between tenderers required by the 2006 Regulations. To extend Azam's time to present its bid in the unexceptional circumstance of its case would be to give it an advantage denied to all other tenderers. There might, for example, Mr Nicholls said, be some who had rushed the presentation of their bid in order to meet the deadline but who could have improved it had they had an additional week.  Moreover, in an oversubscribed competition such as this one was, in which there would have to be a proportionate scaling down of the awards of "new matter starts" to the successful bidders, the introduction of a late bidder into the system would have the potential to affect those awards in a way which would not otherwise arise.  

52.	I would accept Mr Nicholls' submissions as to why on the facts of this case there was nothing disproportionate about the Commission's refusal to change the tender rules to accommodate the unexceptional circumstance that a particular proposing tenderer had, through his own carelessness, missed the deadline. Any different decision by the Commission would, I consider, have been unprincipled and would have involved an unjustified violation of the requirement of equality of treatment imposed by the Regulations. The essence of a competition by way of tender such as that in question is to provide all competitors with an equal opportunity to make their case. It is obviously essential to that end that all competitors should have to work to the same deadline, and it will obviously be perceived to be, and in fact be, unfair for the Commission then to change the rules so as to allow those who carelessly failed to meet the deadline to make late bids. The treatment that the Commission applied to this case is, I consider, properly consistent with its duty under the 2006 Regulations to act in a transparent way. 

53.	We were referred, as my Lord has said, to the decision of David Richards J in JB Leadbitter and Co Limited v Devon County Council [2010] EuL.R 61, which contains a valuable discussion of the application of the principle of proportionality in relation to the type of issue raised in this case, although the tender there in question was of a different commercial nature.  In paragraph 68 David Richards J recognised that there may be exceptional cases in which proportionality will require the acceptance of a late tender, most obviously where the lateness is because of the procuring authority’s fault. In general, however, even if the tender conditions give a discretion to accept late submissions, his view was that there was no requirement to extend time, particularly where, as in the case before him, the lateness results from a fault on the part of the tenderer. I would respectfully agree with that approach as being a good working approach to the like issue in this case.

54.	Like my Lord, I would dismiss the appeal.

Lord Justice Sullivan:  

55.	I agree with both judgments and have nothing to add.  

Order:  Appeal dismissed