England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		26th November 2010

The Hon Mr. Justice Burnett:

1. Allan Rutherford LLP is a firm of Norwich solicitors ["the Solicitors"] which failed to secure a contract from the Legal Services Commission ["the LSC"] to deliver publicly funded social welfare law services in the areas of debt, housing and welfare benefits following the recent tendering exercise. This is an application for permission to apply for judicial review of the rejection of the Solicitors' tender by the LSC, and the maintenance of that rejection following an internal appeals process operated by the LSC. The original decision was made on 23 July 2010 and the appeal decision on 8 October.
2. The application for permission is refused for reasons which follow.

The Background Facts

3. In 2008 the LSC published a consultation document which proposed a fundamental overhaul of the way in which civil legal aid was to be provided in England and Wales. Following the consultation exercise and the development of criteria, those wishing to provide publicly funded civil legal services would be required to tender for contracts with the LSC in a number of different areas of law. This case concerns the social welfare law services in the areas of debt, housing and welfare benefits which were, from the outset of the exercise, bundled together in a single package. As is well known, the family law package was the subject of judicial review proceedings brought by the Law Society against the LSC, decided by this court on 30 September 2010 ([2010] EWHC 2550 Admin). That case resulted in the need to re-run the tendering exercise for that package. The 'family and housing' package is also being re-run following that decision.
4. For the purposes of the tendering exercise the country was divided into 135 procurement areas. Where a designated procurement area was geographically large, separate locations were identified within the area from which the LSC considered that services should be delivered. These were known as 'access points'. Norfolk was designated a procurement area within which there were four access points: Norwich, Great Yarmouth, King's Lynn and West Norfolk, and finally the rest of Norfolk. The Solicitors' tender was for social welfare law services in Norwich. Each procurement area and access point was allocated a number of 'new matter starts' for which those taking part in the competitive tender process were bidding. The number of new starts available was made known in the tender documents. Any organisation making a tender was obliged to indicate how many new starts it sought, up to the maximum available at each access point. The tender exercise was subject to the Public Contracts Regulations 2006 ["the 2006 Regulations"].
5. It was a common feature of the arrangement of all the packages that the tender process imposed a number of conditions, or minimum entry requirements, which those seeking contracts were obliged to satisfy in order to succeed. The Solicitors satisfied those conditions for this package. In the event that the number of bidders who satisfied those conditions between them sought more new matter starts than were available, their bids were then scored against additional criteria (formulated differently for each package). The new matter starts were allocated according to the scores achieved. A feature of the scheme apparent from the outset of the consultation process was that at this stage, the bidder with the highest score would be allocated all the new matter starts it had bid for, with those remaining going to the next highest bidder and so on until the new matter starts were exhausted. The scheme had refinements to cater for a tie between different bidders. There was a further feature of the scheme as it applied to this package. Because the contract encompassed three different, albeit allied, areas of law the LSC made provision for bids to be made by consortia. It was therefore possible for groups of solicitors or other legal service providers to come together and bid jointly for this package. Whilst all members of a consortium were required to satisfy the basic conditions they were scored collectively on the additional criteria.
6. Each of the three elements within the social welfare law package was capable of attracting 29 points at this stage of the scheme. The Solicitors scored the maximum available for the criteria that were applied to debt and housing, but only 21 for the welfare benefits element of the package. In the result they scored 79 points out of a maximum 87.
7. Four bids were submitted for this package at the Norwich access point. Two of those bids were made as part of a single consortium. The members of the consortium were Norwich Citizens Advice Bureau and the charity Shelter. The Solicitors were one of the other bidders. The fourth bidder, who was also unsuccessful, has not been identified in these proceedings. The total number of new matter starts in this package available in Norwich was 3,650. That was broken down as follows: 1,150 for debt; 1,000 for housing; and 1,500 for welfare benefits. The consortium was the successful bidder with 86 points. It bid for all of the available new matter starts. Therefore none was available to allocate to either of the other bidders.
8. There were two criteria by reference to which the Solicitors failed to score full marks for the welfare benefits element. The first related to the number of new caseworkers which it was necessary to employ to be able to perform the contract. The Solicitors' original tender attracted two points out of five in respect of this criterion. Following an appeal lodged on 5 August 2010 this element of the score was increased to three points. The second criterion, which has been the focus of attention in this application, was in the following terms:

All ITTs

Preference will be given to Applicant Organisations whose Individual Bids can provide us with a higher level of confidence of delivery through experience of delivering appeals to the Social Entitlement Chamber of the Upper Tribunal (Administrative Appeals) or First-tier Tribunal in relation to Social Security and Child Support.

Marked out of 5 -The Applicant Organisation (or Key Personnel/Welfare Benefits Supervisor) has made oral or written representations on behalf of clients in at least 10 appeal cases to the Social Entitlement Chamber of the Upper Tribunal in relation to Social Security and Child Support (this includes leave to appeal) since 226 February 2009. (5 points) - The Applicant Organisation (or Key Personnel/Welfare Benefits Supervisor) has made oral or written representations on behalf of clients in at least 5 appeal cases to Social Security and Child Support (this includes leave to appeal) since 26 February 2009. (4 points) - The Applicant Organisation (or Key Personnel/Welfare Benefits Supervisor) has made presentations on behalf of clients in at least 10 appeal cases to the Social Entitlement Chamber of the First-tier Tribunal in relation to Social Security and Child Support since 26 February 2009. (2 points) - The Applicant Organisation (or Key Personnel/Welfare Benefits Supervisor) has made presentations on behalf of clients in at least 5 appeal cases to the Social Entitlement Camber of the First-tier Tribunal in relation to Social Security and Child support since 26 February 2009 (1 point) - None of the above (0 points)

This criterion was not found in the original consultation paper issued in 2008 nor did it feature in the consultation response published by the LSC in June 2009. The first time that bidders were aware of its existence was on the publication of the tender documents on 26 February 2010. The Solicitors scored nothing under this head. The firm did not have the necessary collective experience. None of those employed by the Solicitors at the time of the bid had any of the different experiences identified in that criterion, nor had the solicitors made arrangements to engage the services of anyone so qualified from 14 October 2010, the date on which the contract was due to start.

9. The winning bid scored 86 points. As I have already indicated, following the rescoring exercise on the Solicitors' successful appeal they achieved 80 points. Thus even had they scored full marks for this criterion, they would nonetheless have been unsuccessful in their bid for any new matter starts.
10. The appeal process was referred to in the tender documents. The material parts were as follows:

"14.31. Where an Applicant Organisation is tendering as a single legal entity there will be a right of appeal if, following assessment of the Selection Criteria, a tender is unsuccessful because it ranks lower than other tenders and the Applicant Organisation is subsequently not awarded any contract work. …

14.34. Appeals will only be accepted if made by an Applicant Organisation through the e Tendering system and must be received prior to the applicable deadline(s) set out in Section 3. An appeal submitted after the applicable deadline, in any other form or by any other method will not be considered.

14.35. The Legal Director (or the Legal Director's appointed representative) will review all appeals, and will determine the procedure and will decide whether to invite or require any further information from the Applicant Organisation, before making a determination on the appeal. …

14.37. There will be no further right of appeal."

11. The Solicitors submitted their appeal in the prescribed form. It relied on the following grounds. First, the Solicitors argued that the failure to award a contract was unreasonable and disproportionate. The Solicitors were able to perform the contract, they said. Secondly, an argument that LSC had mis-scored the criterion relating to new staff. Thirdly, the criterion relating to experience in the Upper Tribunal and First Tier Tribunal was disproportionate and discriminatory. It set the bar too high and sought experience in work for which legal aid was not, or was only very rarely, available. Fourthly, the award of the contract for all new matter starts to the consortium had the effect of creating a monopoly for the relevant services in Norwich. It would be very difficult to cater for conflicts of interest if clients had nowhere else to go locally. Fifthly, the consortium (the successful bidder) had misled the LSC in a number of material ways.

The Grounds of Challenge

12. The Solicitors attack the tender process on a number of grounds. The original grounds found in the claim form have been augmented, without objection from the LSC, by others set out in the skeleton argument of Mr Sinclair, who appears for the Solicitors. In summary they are as follows:

i) The criterion relating to experience in connection with Tribunal work was imposed irrationally. It was artificial and irrelevant. Furthermore it was unlawful to introduce it into the tender without its being heralded in the consultation process or the LSC's response to it.

ii) It was irrational to develop a scheme which allowed all the new matter starts available for an access point in any given package to be awarded to a single bidder. This has been referred to as 'the monopoly point'.

iii) There was a breach of the Solicitors' legitimate expectation as an existing supplier that it would win a share of the new matter starts based upon its size, experience and available competencies.

iv) The appeals process was not explained. Furthermore, the LSC fettered a broad discretion by refusing to deviate from the declared approach of the highest scoring bidder being allocated all the new matter starts if it bid for them. It should have awarded some new matter starts to the claimant on appeal as a matter of discretion.

13. The LSC resists each of these arguments on its merits. Additionally, Miss Scolding submits (a) that challenges to the criterion in issue and to the structure of the scheme are long out of time. The time for challenging those matters started to run on 26 February 2010 when the tender documents were published. There is no good reason to extend time and significant prejudice to other bidders and to the LSC would flow from having to rerun the exercise; and (b) that the Solicitors have failed to exhaust another remedy, namely that available under the 2006 Regulations.
14. I shall consider the merits first and then the general arguments advanced to resist the grant of permission.

Ground 1: The Criterion relating to Tribunal experience

15. Mr Sinclair submits that the criterion relating to Tribunal experience was an irrational imposition for a number of reasons. First, no similar requirement was imposed in connection with the debt or housing limbs of the social welfare law tender. Secondly, experience in the Upper Tribunal or First Tier Tribunal was not required as a qualification to act in a supervisory capacity in respect of a team of caseworkers. The requirement in that respect was for a person with appropriate experience before Tribunals or Courts. Thirdly, legal aid is not available for representation at a Tribunal hearing save in exceptional circumstances. Fourthly, the requirement would be more easily met by charitable organisations, who might devote charitable resources to such activities, than by solicitors running a commercial organisation.
16. Mr Sinclair further submits that the absence of this criterion from the consultation process and its introduction in the tender documents in February 2010 gave rise to a legitimate expectation that no such criterion would be applied. Additionally, the time available between the publication of the tender documents on 26 February 2010 and the date by which a bid had to be submitted (21 April 2010) gave an insufficient opportunity to enable any potential bidder whose score would be adversely affected by this criterion to take steps to make good that deficiency.
17. The evolution of this criterion is explained in the Statement of Kerry Wood filed on behalf of the LSC. She is the Head of Central Commissioning at the LSC. One of the matters upon which consultees were able to comment was the formulation of appropriate criteria for the second stage of the selection process, should it arise in any procurement area by reference to a given package. Miss Wood explains that many suggestions for criteria were made but that few of them would have been appropriate to a fair and transparent competitive bid process. She said this about the Tribunal criterion:

"17. We decided on the final selection criteria following a number of meetings with representative bodies, which included the Law Society, Advice Services Alliance (ASA), Legal Aid Practitioner's Group, Citizens Advice, Advice United Kingdom and Law Centre's Federation. This was done through discussions at meetings rather than by written correspondence Meetings were held on 7 October 2009, 4 November 2009, 12 January 2010 and 3 February 2010 at which we discussed the SWL criteria. The minutes of the meeting of 7 October and the agendas to the meetings of 12 January and 3 February 2010 are exhibited to this statement (KW1/12-15). We decided to consult on the proposed selection criteria only with representative bodies, having consulted on the policy more widely in the formal consultation process. We took the view that it would not have been representative or helpful to have consulted with potential applicant organisations on the selection criteria, because their response might have been influenced by the potential impact of that criteria on their organisation, rather than being objective and based upon the wording of the proposed criteria.

18. The tribunal criteria was decided upon in January 2010 in consultation with representative bodies and was included in the selection criteria because we consider it is a clear indicator, if the criterion were met, that the applicant organisation offered the range of services and experience in the practice area of welfare benefits law which would benefit clients most. Whilst a large number of organisations undertake welfare benefits work, many of these undertake this work exclusively at the lower levels and there is little correlation between those who undertake large volumes of cases and those who undertake cases that require representation to the highest level. Wherever possible we sought to commission end-to-end service for clients by giving more points at selection criteria to those able to demonstrate experience of welfare benefits work at the very highest level. This would therefore mean clients needing advice at tribunal, with the Upper Tribunal being the highest level, would be able to access advice from experienced advisers able the handle their matter without the need to referral to other organisations to progress their case. Using the tribunal criterion would therefore meet our policy objective by ensuring that clients had easier access to advice and could access the services they needed without having to be referred to another organisation to assist on that problem, or a related legal problem. The criterion was akin to the 'authorised litigator' for Housing and the 'approved intermediary' criterion in Debt, and we thought it appropriate to have a similar measure in Welfare Benefits so that each of the three categories carried the same weighting and the same score. That is why each of the categories has a specific criterion relating to its area of law.

19. I recall that when the tribunal criterion was discussed, the ASA did have some concerns that the tribunal criterion might favour larger organisations over smaller ones. After this concern had been raised, we took on board the ASA's concerns and amended the wording of this criterion so that it included greater graduation in the response options available against which points could be attracted. When ASA considered the amended criterion, it is fair to say that they still had some reservations, but we undertook an impact analysis which did not demonstrate to me that there would be such an adverse impact or a sectoral impact (NfP vs for profit). I attach a printout of that analysis, which comprises the numbers of Legal Help claims using the code (WSSC) by LSC account number which relate to Legal Help claims for cases before the Upper Tribunal to this statement at (KW1/16-22). My view remains that the ability to meet this criterion is not dependent on an organizations size but on the mix of cases which it has undertaken and its level of welfare benefits law specialism.

20. The rationale for this is detailed at paragraph 5.22 of the consultation response. We wanted the Selection Criteria to assist us in "(… reviewing experience of delivering priority areas, considering whether all levels of advice can be delivered and the extent that integrated services can be provided."

21. An important aspect of the Upper Tribunal Criterion was that it rewarded those Applicant Organisations that were able to demonstrate a range of experience across the full range of Legal Help work, comprising written representation and advisory work, and also experience of having represented clients at an important stage of the legal process in this practice area. I felt it was important that firms undertaking welfare benefits work had an opportunity to demonstrate their expertise, particularly because it is rare for legal aid certificates to be granted in this type of work because the tribunal is an excluded forum and so representation can only be granted if the conditions for exceptional funding under section 6(8)(b) of the Access to Justice Act 1999 are met.

22. From an internal statistical analysis of providers of Welfare Benefits legal services which I have mentioned above and is at [KW1/16], we identified that of 442 offices who undertook this work 366 (82.8%) had experience of cases reaching the Upper Tribunal level. 24% of these offices had undertaken at least 5 cases at this level. This data was used to inform that basis of our score setting for this criterion, which took into account that applicant organisations might also put forward cases which had been funded other than by the LSC, or had been undertaken on a pro-bono basis. The impact assessment which I referred to above also considered the position of the Not-for-Profit (NfP) sector in comparison to law firms. We found that no discernable difference existed between the experience of NfP organisations and other Applicant Organisations. We concluded that this criterion was a valid and appropriate indicator of experience within the field of Welfare Benefits law.

23. I remain sure that the decision to including the tribunal criterion was correct, because it enable organisations who can better demonstrate that they have experience of delivering services at first tier or upper tier tribunals (ie. Experience of delivering a broad range of services for clients) to obtain additional points, which in turn assisted the LSC in distinguishing tenders in a competitive process. "

18. There is in my judgment nothing arguably irrational in developing a criterion which is directed towards establishing the depth and breadth of the experience and expertise which a bidder is able to provide. Providing legal assistance to clients in this environment in connection with Tribunal work, rather than simply by engaging with the public authorities who administer benefits, is a reflection of both experience and expertise. There is nothing inconsistent between the approach developed for welfare benefits law and those relating to debt and housing. Those had their own equivalents determined by reference to the type of work involved. It is clear that the analysis undertaken by the LSC, in response to concerns raised by the Advice Services Alliance, anticipated the argument that not for profit organisations might be at an advantage. The analysis undertaken suggests otherwise. Furthermore, the analysis referred to in paragraph 22 of Miss Wood's statement suggests that a significant proportion of existing suppliers would, on the basis of past performance, be able to score the maximum available points and most, if not all, some points under this head. That said nothing of those who would be able to achieve a score, or enhanced score, by entering into a consortium agreement with another provider of legal services or by making arrangements to engage suitably qualified staff to augment the team from 14 October 2010. Both of those were options available to any bidder. It is correct that legal aid for advocacy before a Tribunal is available only exceptionally. It is, however, more widely available for providing assistance to a client taking a case through the Tribunal system. The criterion was formulated expressly to cover written representations, in addition to oral advocacy. The fact that an individual acting in a supervisory capacity did not independently need to satisfy this criterion does not undermine the rationality of a criterion that is looking for experience in the practice, rather than necessarily of an individual. In my judgment none of the points advanced in support of the 'irrationality' aspect of the challenge to this criterion provides an arguable case.
19. I am unable to accept an argument founded on a legitimate expectation that such a criterion would not be included in the invitation for tender on the basis that it was not heralded in the consultation document or response to it. There was no statement contained in the consultation document that the criteria would not extend beyond those mentioned as possibilities in the consultation process, nor any course of conduct that could give rise to such a legitimate expectation. One of the aims of the consultation process was to inform the development of criteria to be applied to tenders for each package. To have fixed the criteria at the outset of the consultation process would have defeated in part the purpose of that process. Miss Wood's evidence shows that the consultation responses were considered and that further discussions followed with interested bodies, before the criteria were determined.
20. Mr Sinclair's argument that this new criterion came too late in the process to enable bidders to take steps to improve their position proceeds from the fact that there were only eight working weeks allowed between the publication of the tender documents and the last date for submitting a tender. The way it worked was that bids had to be made on line and those bids could be amended up to 21 April, but not beyond. That, he submits, allowed far too short a period to make arrangements to bid as part of a consortium or to engage a new member of staff with experience in Tribunal appeals and thus score some points under this head.
21. However, the reason why the Solicitors scored no points for this criterion was essentially different. Whilst the firm had been involved in this area of work in the past, and no doubt members of staff remained engaged with relevant experience of it, very little welfare benefit work had been done in the previous year. LSC records show that the Solicitors undertook only one welfare benefits case in the year 2009/2010. It is likely to be right that establishing a consortium in the time available would be difficult if no thought had been given to doing so before the publication of the tender documents. There is no evidence that the Solicitors ever considered doing so, or that they had taken any preliminary steps in advance of the publication of the tender documents to make a joint bid, were it thought necessary. Neither is there any evidence that the Solicitors considered the possibility of augmenting their current staff with an individual with some experience of Tribunal work to enable something to be scored against this criterion. As it happens, their bid did involve the need to engage new staff to service the new matter starts for which they bid, in particular a supervisor in this area. The reality is that the Solicitors did not focus on the possibility that they would be altogether unsuccessful in securing a contract for this package.
22. The question is whether it was arguably unlawful to include a criterion relating to experience and expertise in the relevant area which was 'new' when the tender documents were published with just under two months available to take steps to improve one's position if the current state of affairs would deliver a low score. It is 'taking steps' that matters because the key worker or supervisor had to be identifiable, but need not yet be employed. Mr Sinclair draws an analogy with the Law Society case where the challenge was not to the legality of a criterion applied to the family law package, but to its timing. The analogy carries him only so far. In that case the criterion in question was to have at least one caseworker accredited under each of two different panel accreditation schemes at the date of the bid. It could be the same caseworker accredited to both, or two caseworkers accredited to one each. The complaint was that the criterion required the caseworkers to be accredited at the date of the bid (rather than at the date on which the contract was to come into force). It was not possible to achieve accreditation in the time available. It had not been appreciated by potential bidders that this would be how the tender would work, and so very large numbers of solicitors were unable to gain the points available. As it turned out, this failure was decisive in a large number of cases. It resulted in a wholesale culling of legal service providers in the family law arena. That was not what was intended (or expected) by the LSC. The Divisional Court identified the essential question before it at paragraph [80] of the judgment of Moses LJ and its conclusion at paragraph [105]:

"80. The essential question is whether the LSC gave those who tendered a fair opportunity to demonstrate their knowledge, experience and commitment through accreditation. After all, it was by the external assessment which accreditation afforded that the LSC was able to judge who was best fitted to provide the services it required. …

105. …the failures we have identified to make clear what would be required to put a provider in the best position to acquire the maximum points was unfair and arbitrary. It led to the absence of any opportunity to acquire an accreditation – an opportunity which ought in fairness to have been given to achieve the LSC's objectives."

23. Accreditation is different from experience. It may be necessary to have wide experience to gain accreditation, but there are many with wide experience who had not sought accreditation. They could not do so in the time available.
24. The criterion with which this application is concerned is one directed towards experience gathered in the previous year by the applicant organisation or, failing that, by an individual or individuals who would be working from the date on which the contract came into force. Nothing more needed to be done collectively by the bidding firm to gain the experience, nor by the key worker or supervisor concerned. In the unusual factual position of the Solicitors, namely bidding for welfare benefit work in which they had no very recent experience, their need was to identify a potential supervisor with experience of Tribunal related work. Ms McNally, a partner and member of the Solicitors, gives evidence that a supervisor was to be engaged in any event. Importantly and unlike the impact in the Law Society case, this criterion did not have the unexpected impact of the sort there apparent. The reasons which led this Court to quash the family law package in the Law Society case are not engaged. The timing of the introduction of the Tribunal criterion did not deprive bidders of a fair opportunity to bid with a view to securing the relevant points. The timing of the introduction of this criterion was not unfair or arbitrary. It does not follow from the particular difficulties that the Solicitors appear to have had with the criterion, given their unusual circumstances, that its introduction was arguably unfair. The timing point does not assist the claimants in this case.
25. It follows that the Solicitors have failed to show that the criterion was irrational or otherwise arguably unlawful in itself. Should I be wrong in that conclusion, in any event the argument could not assist them. It is plain beyond doubt that the application of this criterion had no impact on the outcome of this bidding exercise. The winning consortium had 86 points and the solicitors, after their appeal in respect of a different criterion, 80 points. So if the Tribunal criterion were excised altogether from the process, the winning consortium would have scored either 81 points (if it had otherwise achieved the maximum 5 for Tribunal related work) or 82 points (if the single point it lost in the evaluation exercise was attributable to this criterion).^[1]

Ground 2: The Monopoly Issue

26. As it applied to the social welfare law services package, the scheme envisaged by the LSC always had two aspects that have been attacked under the rubric of 'monopoly'. First, that a successful bidder would be allocated all the new matter starts for which it had bid; and secondly, that in any procurement area or access point there might be only one provider of legal services with a contract for this package. The second aspect was not a universal feature across all the new civil legal aid scheme. For some packages, the scheme expressly provided for multiple providers in any procurement area.
27. The background to this argument is section 4 of the Access to Justice Act 1999 which provides (in part):

"(1) the Commission shall establish, maintain and develop a service known as the Community Legal Service for the purpose of promoting the availability to individuals of services of the descriptions specified in subsection (2) and, in particular, for securing (within the resources made available, and priorities set, in accordance with this Part) that individuals have access to services that effectively meet their needs. …

(4) Every person who provides any function relating to Community Legal Service shall have regard to the desirability of exercising it, so far as is reasonably practicable, so as to –

(a) promote improvements in the range and quality of services provided as part of the Community Legal Service and in the ways in which they are made accessible to all those who need them,

(b) secure that the services provided in relation to any matter are appropriate having regard to its nature and importance, and

(c) achieve the swift and fair resolution of disputes without unnecessary or unduly protracted proceedings in court."

28. The result in Norwich, as already noted, was that all new matter starts for the social welfare law package went to the consortium comprising CAB and Shelter. The Solicitors characterise this as a 'local monopoly' contrary to the public interest, irrational and difficult to square with the statutory duties imposed upon the LSC by section 4 of the 1999 Act. Mr Sinclair has not suggested that the emergence of a single provider in these circumstances, albeit a consortium, puts the LSC explicitly in breach of its statutory duties. The argument is that people in Norwich and its surrounding area are deprived of any choice between different service providers should they need legal assistance within the ambit of this package. A particular difficulty has been identified should the CAB or Shelter finds themselves with two clients who have a conflict of interest. That is more than a possibility. Ms McNally has provided evidence of 46 instances of Shelter referring housing cases to her firm in the course of about a year principally because of conflicts of interest, for example between neighbours in anti-social behaviour cases. She gives one example of a fee earner in the Solicitors finding himself in conflict because of a dispute between two people jointly and severally liable for a debt. Ms McNally also instances one example in the welfare benefits area where a housing benefit claim was apparently made on behalf of two people with one of those two people being unaware of it.
29. Whilst I accept that conflicts of interest will inevitably arise in all of the three areas covered by this package, it seems to me that the problem is being overstated. First of all, although the CAB and Shelter came together as a consortium for the purposes of this contract, they remain separate organisations. True it is that the new matter starts have been attributed to them jointly. Nevertheless, they are each entitled to provide services quite independently of each other. The evidence before me does not detail the different expertise in the two halves of this consortium, but there is likely to be overlap. An important feature of the LSC contracts generally is that legal service providers are not restricted to delivering services to individuals who live within the relevant procurement area, still less are individuals restricted to obtaining services from providers with contracts local to them. We have seen that within Norfolk there are four access points. In theory, any conflict of interest might be solved by referring the client to a legal service provider at one of the other Norfolk access points. A possible difficulty arises with that suggestion. The local CAB to each of the other access points and Shelter formed consortia and were successful in their bids. Indeed, they were the only bidders for this package at those access points. I was told that each local CAB is independent of all others with the result that conflicts of interest could not arise as between one and the other. However, the position remains unclear and is not explored in the evidence. Be that as it may, should a conflict of interest arise in Norwich a client could be referred to another legal service provider in an adjoining county, or to a national organisation. Additionally, housing related services are provided both under this package and also under another package called "family and housing". As it happens, the Solicitors have a "family and housing" contract which has been extended until February next year with every expectation that they will keep it thereafter. Shelter will continue to be able to refer clients to the Solicitors in appropriate cases.
30. The statutory scheme does not require the LSC to provide contracts to more than one legal service provider for each package in every procurement area. The primary duty of the LSC is to secure that individuals have access to services that effectively meet their needs (section 4(1)). Mr Sinclair was, if I may say so, right not to suggest that the LSC was in breach of that statutory duty. In cases where conflicts arise they can be referred elsewhere, even if that may result in some inconvenience. Section 4(4)(a) of the 1999 Act requires the LSC to have regard to the desirability of exercising its functions so as to promote improvements in the range and quality of services provided. This statutory provision similarly cannot be read as imposing an obligation to establish multiple service providers in any one location. Furthermore, although once consequence of the new scheme is to create local monopoly suppliers of publicly funded legal services in some areas with respect to this package, one of the underlying purposes of the new scheme was precisely to improve the range and quality of services available. In allocating all new matter starts to the highest scoring bidder, the LSC was seeking to secure services for the public from the best qualified legal service provider.
31. The possibility of conflicts of interest, which might require a client to be referred to another service provider in a less convenient location, does not give rise to an arguable case that it was irrational to establish a scheme with the two features identified above, namely that a successful bidder could be allocated all the new matter starts available and thus become the only successful bidder at a given access point. It was not arguably irrational to apply those features to Norwich.

Ground 3: Legitimate Expectation that the Solicitors would get a share of new matter starts

32. The Solicitors have been delivering publicly funded legal services which fell within the social welfare law package for some years. They delivered publicly funded services in other legal areas as well. There has been no suggestion that the Solicitors have done so other than efficiently and in the interests of the public. The Solicitors argue that as an existing supplier they had a legitimate expectation that they would receive a share of new matter starts within this package based upon their size, experience and existing competencies. Mr Sinclair pressed this argument but lightly. It is clear, in my judgment, that there has been no departure from promises or assurances given to the Solicitors, nor were any representations made to them that they would succeed in the competition exercise. Indeed, to suggest that the Solicitors must necessarily have succeeded, despite the content of their bid and its evaluations by reference to objective criteria is inimical to an open competition process. This ground is unarguable.

Ground 4: The Appeal Process

33. As originally formulated this ground complained that the paragraphs in the tender documents setting out the right to an appeal failed to identify the basis on which an appeal might be allowed. There was also a complaint that at the date of the issue of these proceedings, the Solicitors' appeal had not been determined. These points have fallen away and been replaced by an argument that the LSC should have allowed the appeal on the basis of a general discretion to award new matter starts. The LSC disputes that it has a general discretion because a fair tender process must apply the same criteria to all bidders. A necessary feature of that process is to fix a date by which any bid must be finalised. To allow one bidder in effect to change or revise its bid after all other bidders have been told that cannot happen would, submits the LSC, result in an unfair process at least at the appeal stage when (necessarily) the results of the tender process have been announced.
34. Mr Sinclair is right to suggest that the detail of the appeals process is not spelt out in the tender document. Nonetheless, it takes its colour from the process of which it forms part. Having invited tenders against a set of published criteria it would generally not be lawful for the LSC to apply different criteria to one bidder in the appeal process. An appeal will result in a re-evaluation of a submitted bid against the published criteria. As happened with respect to the Solicitors' bid, and as has happened in many other cases, the appeal resulted in a different and higher score, although that did not mean that the bid became successful. I do not consider that the LSC can be criticised for preventing appellants at this stage in the process from amending their bids. It is undoubtedly right that a deadline for submitting a bid can, without offending the 2006 Regulations, in limited circumstances be extended if it would be proportionate to do so (see Azam & Co v Legal Services Commission [2010] EWHC 960 Ch at [41]) but they do not arise in this case, which is concerned with an appeal process after the results of the tender process have been announced.
35. Mr Sinclair pointed to an indication given by the LSC on its website that successful appeals would not result in the adjustment of new matter starts already allocated to successful bidders. What would have happened if the appeal had resulted in the Solicitors beating the consortium or tying with it? I accept that such a situation would have raised an acute problem for the LSC in an environment where a successful bidder has been allocated all the available new matter starts for a particular package at an access point or small procurement area. For other packages the LSC 'held back' new matter starts to enable a reservoir to be available in the event of successful appeals. The evidence available does not disclose how the LSC would have dealt with a successful appeal by the Solicitors (in the sense that they beat or achieved a tie with the consortium) but it is not a point, on the facts, that arises in this case.
36. There is no mileage in the argument that the LSC retained a general discretion to award contracts outside the tender process, or that it fettered its discretion in failing to do so to the benefit of the Solicitors. Such an approach is not compatible with an open competition process of the sort undertaken by the LSC. Had there been a reserve criterion set out in the documents that the LSC could award a contract in its discretion to a bidder who had otherwise failed, it would have been vulnerable to successful challenge under the 2006 Regulations. It would be unfair, arbitrary and fail to accord equal treatment to bidders.
37. On the merits, therefore, I conclude that the Solicitors have not demonstrated an arguable case that the LSC has acted unlawfully in connection with the tender process as it applied to this package in the Norfolk procurement area, or more generally. Permission is therefore refused on the merits.

Time and Alternative Remedy

38. The points taken by the LSC on time and alternative remedy relate to the complaints that the Tribunal related criterion was unlawful and that the process which delivered the 'local monopoly' was unlawful. The LSC contends that the date on which these aspects of the process became fixed (and thus open to challenge) was 26 February 2010. It was wrong as a matter of principle for the Solicitors to 'wait and see' whether their bid was successful before seeking to mount a challenge, which in any event should have been brought in the Chancery Division of the High Court under the 2006 Regulations. The LSC does not contend that the Administrative Court lacks jurisdiction to deal with the complaints by way of judicial review but rather, as a matter of discretion, no application should be entertained on account of the failure to exhaust other remedies.
39. Mr Sinclair's first answer to the time point is that it began to run only when the Solicitors failed in their bid (in which case this claim was not late). Alternatively, if time started to run on 26 February 2010 it should be extended in the same way as this Court was prepared to extend time in the Law Society case. Whilst accepting that an alternative remedy was available he submits that the public interest in access to justice, a feature not present in most procurement cases, provides a potent reason why judicial review is appropriate.
40. CPR 54.5 requires a claimant for permission to apply for judicial review to bring his claim promptly and in any event 'not later than 3 months after the grounds to make the claim first arose'. There can in my judgment be no doubt that, in so far as the claimant suggests that the criterion under attack in these proceedings is irrational, or that the feature of the tender process which allowed a single bidder to secure all the new matters starts at one access point for a particular package was unlawful, time began to run on 26 February 2010. Time will only be extended if there is a good reason to do so and, in any event, permission to apply for judicial review will be refused (alternatively relief will be refused as a matter of discretion) if otherwise hardship or prejudice would follow to third parties or there would be detriment to good administration. That is the language of section 31(6) of the Senior Courts Act 1981 which provides:

"Where the High Court considers that there has been undue delay in making an application for judicial review, the court may refuse to grant (a) leave for the making of an application or (b) any relief sought on the application, if it considers that the granting of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration."

41. In R. v Dairy Produce Quota Tribunal for England and Wales ex parte Caswell [1990] 2 AC 738 the House of Lords decided that if an application were not made promptly or within three months undue delay for the purposes of section 31(6) was established. There always needs to be a good reason to extend time. But even if such a reason were demonstrated, permission could be refused, or relief denied, if the requisite hardship, prejudice or detriment would otherwise follow.
42. In the arena of public procurement, Regulation 32(2) of the 2006 Regulations provides a right of action for any service provider who suffers or risks suffering loss or damage as a result of a breach of the Regulations by the contracting authority. Regulation 32(4)(b) provides that the proceedings must be:

"… brought promptly and in any event within 3 months from the date when the grounds for the bringing of the proceedings first arose unless the Court considers that there is a good reason for extending the period within which the proceedings may be brought."

The parallel with public law proceedings brought under what is now CPR 54 is clear.

43. In Jobsin Co UK Plc v Department of Health [2002] 1 CMLR 44 the Court of Appeal considered a number of questions relating to the time limit under the Regulations. The claim had been brought under the Regulations (not via judicial review). The claim was not brought promptly or within three months, but the judge had extended time. The complaint made by the claimant about the procurement process was a fundamental one. The Department had not published the criteria against which the bids would be evaluated. In paragraph [22] of his judgment Dyson LJ, with whom Thorpe LJ and Astill J agreed, identified the two questions which fell to be considered: (a) when did the right of action arise; and (b) if the proceedings were not brought promptly and within three months, was there a good reason to extend time? There was no doubt that time began to run when the briefing document in question was issued that failed to identify the relevant criteria. From that moment, the bidder was at risk of suffering loss. The cause of action was complete for the purposes of the Regulations. Dyson LJ rejected the submission that time did not begin to run until the procurement process had been completed and that no complaint could be brought until then. The Regulation is concerned not only with loss but risk of loss. Additionally:

"It would be strange if a complaint could not be brought until the process has been completed. It may be too late to challenge the process by then. A contract may have been concluded with the successful bidder. Even if that has not occurred, the longer the delay, the greater the cost of re-running the process and the greater the overall cost. There is every good reason why Parliament should have intended that challenges to the lawfulness of the process should be made as soon as possible. They can be made as soon as there has occurred a breach which may cause one of the bidders to suffer loss. There was no good reason for postponing the earliest date when proceedings can begin beyond that date. Mr. Lewis suggests that there is such a reason. He points out that if, in a case such as this, the limitation period runs from the date of publication of the tender documents, it will be possible for the contracting authority to rule out any real possibility of a challenge by issuing an invitation in breach of the regulations and then not taking any further steps in relation to tenders until after the three months period has expired. I confess that I find this an unlikely state of affairs, but I can see that it might conceivably happen. If it did, a service provider who wished to bring proceedings might have a good case for an extension of time: it would all depend on the facts. In my view, this cannot affect the plain meaning of regulation 32(2). I would therefore hold that the right of action which Jobsin asserts in the present case first arose on or about 14th August 2000. The essential complaint which lies at the heart of the proceedings is that there was a breach of regulation 21(3), in that the Briefing Document did not identify the criteria by which the DOH would assess the most economically advantageous bid." (paragraph [28])

44. That conclusion is consistent with the view I have already reached that for the purposes of CPR 54(5) the grounds for bringing these judicial review proceedings arose on 26 February 2010.
45. The Department for Health submitted that the Judge had been wrong to extend time. He had relied upon Jobsin's ignorance of the law (not a feature of the case I am considering), concluded that no hardship or prejudice would flow to third parties and was unconvinced that there was any detriment to good administration. Jobsin advanced a number of reasons to support the extension:

i) The extension of time sought was relatively short;

ii) Their excuse for being late was that they were unaware of the legal position until they consulted solicitors;

iii) There was no evidence of detriment to the Department of Health or to good administration over and above normal inconvenience;

iv) There was no evidence of damage to third parties, in particular because the contract had not yet been let;

v) There was a wider public interest in securing the validity of the procurement process because it affected the putative rights of all potential bidders throughout the EU. It would be strange if a process which the Court considered had been conducted contrary to EU law should be allowed to stand when only a short period of delay in challenging it was involved.

The Judge had additionally concluded that it was reasonable for Jobsin to wait to see whether they succeeded in their bid on the basis that its relationship with the Department might be imperilled if it were to launch an early challenge.

46. Dyson LJ considered that ignorance of the true legal position would not usually provide a good reason for failing to act and in so doing made a number of observations which apply with equal force to challenges to public law decisions brought under CPR 54:

"Regulation 32(4) specifies a short limitation period. That is no doubt for the good policy reason that it is in the public interest that challenges to the tender process of a public service contract should be made promptly so as to cause as little disruption and delay as possible. It is not merely because the interests of all those who have participated in the tender process have to be taken into account. It is also because there is a wider public interest in ensuring that tenders which public authorities have invited for a public project should be processed as quickly as possible. A balance has to be struck between two competing interests: the need to allow challenges to be made to an unlawful tender process, and the need to ensure that any such challenges are made expeditiously. Regulation 32(4)(b) is the result of that balancing exercise." (Paragraph [33])

Dyson LJ went on to describe as a 'startling proposition' that even where a bidder knows of the defect he could stay his hand for fear of jeopardising his eventual chance of securing the contract. He said:

"It seems to me that a tenderer who finds himself in such a situation faces a stark choice. He must either make his challenge or accept the validity of the process and take his chance on being successful, knowing that the other tenderers are in the same boat. In my view, it is unreasonable that he should sit on his rights and wait to see the results of the bidding process on the basis that, if he is successful he will remain quiet, but otherwise he will start proceedings. I do not believe that a tenderer who deliberately delays proceedings in an attempt to have his cake and eat it has good reason for an extension of time if the outcome of the process is not to his liking." (paragraph [38])

47. In dealing with the other arguments advanced on behalf of Jobsin Dyson LJ said:

"It is not necessary to adduce particular evidence of prejudice to third parties. It is inherent in the process itself that delay may well cause prejudice to third parties as well as detriment to good administration." (paragraph [40])

He added:

"Finally, I should deal with Mr Lewis's point that there should be an extension of time because the court has ruled in Jobsin's favour on the issue of classification, and because the court should not stifle proceedings where what is at stake is whether the process is in breach of EC law. This argument, carried to its logical conclusion, involves a proposition that the limitation provisions in regulation 32(4) are contrary to EC law. That argument was rejected by this Court in Mantra Communications SA v Home Office." (paragraph [41])

48. The facts in Jobsin provide two striking contrasts with those in the instant application. First, the contract had not been let and secondly the Court was persuaded that there had been a breach of European procurement law. Nonetheless, time was not extended.
49. The LSC has adduced evidence of prejudice and detriment to good administration in this case which would flow from extending time. At the least, were the Solicitors to be successful in their claim, the competition for this package would have to be run again in Norwich against revised criteria. The consortium which succeeded in its bid would very obviously be prejudiced not only because it would be threatened by a successful bid from the Solicitors but because others might also successfully bid. The LSC would be put to trouble and expense in running a fresh competition and the new arrangements would inevitably be significantly delayed.
50. The reason for the delay in challenging the criterion and the arrangements for the distribution of new matter starts is that the Solicitors believed that, despite their inability to score under the material criterion, they would nonetheless be successful. This is a classic case of a bidder deciding to 'wait and see' whether the perceived defects in the tender process would matter. This reason does not, in my judgment, provide a proper basis on which to extend time but, in any event, the potential prejudice to the successful bidder and detriment to good administration decisively tell against grant of leave even if there were merit in the underlying legal arguments.
51. Mr Sinclair seeks to avoid this conclusion by an appeal to the reasoning in the Law Society case in which this Court was prepared to extend time and grant relief despite the challenge being to a single criterion applied to the family package which had, similarly, been published on 26 February 2010. The Law Society decided to challenge the process in August 2010 after the outcome of the tendering process across the country was known.
52. The Divisional Court inclined to the view that it would not have been possible for the criterion, or the tight time frame it imposed (see paragraph [22] above), to be challenged at the time of its publication. That was because its profound impact on the whole process in the family package was unforeseen by both the Law Society and the LSC at the time as well as by bidding solicitors. There would have been an argument of prematurity and, in any event, the LSC had itself given indications that concerns about the panel membership criterion should await the outcome of the bidding process. Moses LJ said this:

"116. The need for promptness in judicial review is well-known. Good public administration requires finality. This is because public authorities need to have certainty as to the legal validity of their decisions and actions, and third parties need to be able to rely on those decisions and actions. Promptness has been recognised to be particularly important where the interest of other parties is concerned: see for example R v Monopolies and Mergers Commission, ex parte Argyll Group plc [1986] 1 WLR 763 at 782-783; R v Independent Television Commission ex parte TVNI Limited [1996] JR 60; and the authorities cited in Fordham's Judicial Review Handbook, Fifth Edition, 26.2.2."

53. At paragraph 123 and 124 of his judgment, Moses LJ discussed and distinguished Jobsin.

"123. It is because of the unexpected outcome that the LSC is now conducting the review to which we have referred. The fact that this challenge is to the impact of the timing of the introduction of the panel membership criteria, rather than to the criteria itself, distinguishes this case from Jobsin Co UK Plc (t/a Internet Recruitment Solutions) v Department of Health [2001] EWCA Civ 1241 on which Mr Lewis QC relied. That case involved a situation in which the defendant erroneously considered that a procurement exercise was for a type of contract which did not require the tendering documents to contain the criteria on which it intended to base its decision. In fact, the contract fell into a different category and it was necessary for the documents to contain the criteria. The question was whether a claim by a tenderer who had not been short-listed was brought within three months from the date when grounds for bringing the proceedings first arose. It was held that those grounds arose when the invitation to tender was public because tenderers were at risk of suffering loss or damage from that date as a result of the defendant's breach of duty.

124. In Jobsin's case the relevant facts were known to both the bidder and the defendant at the time of the tender, but the bidder did not appreciate the legal significance of those facts. In the present case neither the bidders, the Law Society, or indeed the LSC were aware of the impact of the introduction of the criteria on 26 February 2010 when the invitation to tender was published. Jobsin's case also differs from this case because it was a challenge by a disappointed bidder in private law proceedings under the relevant regulations. Taking the facts before us, it has similarities to a challenge by an individual firm employing experienced practitioners who are not panel members and who could not qualify in time. Such a firm would know at the date of the tender that it would obtain fewer points than it would have done had those qualified to become panel members done so. But a challenge of that sort is very different from the Law Society's challenge to the impact of the timing of the introduction of the criterion on the overall outcome of the process. This is a public interest challenge concerned with the impact of this aspect of the procurement exercise on access to justice for those needing advice and representation in family law matters."

54. The contrasts with Jobsin drawn by Moses LJ which provided the foundation for extending time are not apparent in this case. The 'timing' point referred to does not avail the Solicitors. The relevant facts were known to the Solicitors in February. When they made their bid it was clear that they would score no points under the Tribunal criterion and also that the scheme enabled a bidder to seek and secure all of the available new matter starts. That others might score such points must have been obvious. So too should have been the risk of failure. The solicitors are disappointed bidders seeking to challenge the process out of time rather than a body bringing a public interest challenge. Mr Sinclair submits that the challenge is one brought in the public interest because the aim of the Solicitors is not limited to their own financial interests but also to widen access to welfare law advice in Norwich. With respect to both Mr Sinclair and the Solicitors I am rather sceptical at that suggestion. This claim is being advanced to support the private interests of the Solicitors to secure professional work for the practice. Any perceived benefit more widely to the people of Norwich would be incidental. The situation has no parallel with the circumstances in which the Law Society made its challenge.
55. Moses LJ considered whether time should be extended, assuming but without deciding, that the time for challenge arose in February. He recognised 'that the general approach to extending time is strict, particularly in cases where third party interests are affected' (paragraph [125]) but the Court went on to extend time for the following reasons (paragraphs [126] to [129]):

The general importance of the issue, which was exceptional. The errors identified affected not only solicitors generally but also the wider public because the most vulnerable had 'been unlawfully prevented from the opportunity to obtain the services of a much wider pool of well qualified and experienced family lawyers.'

The claim was strong (indeed having extended time it was successful).

Even if time started to run from February, the uncertainly about its general impact upon the bidding process was a factor in favour of extending time.

56. The Court was prepared to extend time despite the detriment to good administration in having to re-run the whole of the family package across England and Wales and despite the prejudice that would be suffered by those who had been successful in the flawed bidding process.
57. In my judgment, not only are the factors which distinguished Jobsin not available to the Solicitors in this case, but the reasons which led the Court in the Law Society case to extend time do not apply either. Questions relating to extending time in public law proceedings are necessarily fact specific. But in the face of Jobsin and the consideration given to in the Law Society case it would take a strong combination of circumstances to justify an extension of time to challenge matters which were apparent when the bidding process opened, whether in public law proceedings or under the 2006 Regulations. In the result time should not be extended in this case and permission will be refused on that ground also.
58. Miss Scolding submitted that permission should further be refused because the Solicitors have not used the alternative remedy that was open to them via the 2006 Regulations. She told me that six challenges had been made using that route and one, at least, has been tried and determined and further considered by the Court of Appeal. That is Azam & Co v Legal Services Commission [2010] EWHC 960 (Ch); [2010] EWCA Civ 1194. The firm in that case sought relief under the 2006 Regulations in respect of the immigration package. The complaint was two-fold. First, that its failure to submit a bid before the deadline (28 January 2010) was the fault of the LSC and secondly that it was unlawful not to extend the deadline for submitting the bid by six days when the firm asked. The claim was expedited so that if it were successful its bid could be considered along with all others, before the results of the tender process were announced. Between paragraphs [29] and [42] of his judgment Briggs J set out the legal principles which govern a challenge under the 2006 Regulations. The Regulations reflect European public sector procurement law. The basis upon which a claim may be made is not restricted to allegations that a contracting authority has failed to accord equal treatment to bidders, or to do so transparently and in a non-discriminatory way but extends to a contention that the authority has failed to act in a proportionate way or in accordance with good administration. The claimants in Azam were unsuccessful. It is sufficient to note that the challenges to the Tribunal criterion and to the distribution of the new matter starts could have been brought under the 2006 Regulations. Indeed, a challenge under the Regulations would have been the natural mechanism to put right those perceived wrongs. In such a claim the High Court has very wide powers. Such proceedings would have advantages over judicial review, not least that evidence on all relevant questions including proportionality would be given orally and fully tested. Indeed, had there been any merit in the underlying claim the appropriate course might have been to transfer it to the Chancery Division to proceed under the 2006 Regulations always assuming that time was not, for practical purposes, a bar.
59. As Miss Scolding recognised, the alternative remedy point does not go to jurisdiction but rather operates at the discretionary level. Ordinarily, permission to apply for judicial review will be refused when the claimant has failed to exhaust an alternative remedy. However, in this case, having concluded that the claim lacks merit and that permission should also be refused for delay, it is unnecessary to determine what the position would have been given the alternative remedy, but in different circumstances.

Conclusion

60. Permission to apply for judicial review is refused because the grounds have no substance and, furthermore, because the claim has not been brought promptly in circumstances where third party interests and good administration would be prejudiced by the grant of any relief. There is no good reason to extend time.
61. This judgment is given following an application for permission to apply for judicial review. There was discussion about whether to treat the application as a rolled-up hearing. However, the LSC would have wished to put in further evidence if permission were granted. Nonetheless, this judgment will be placed on Bailii and may be cited in other proceedings.

Note 1   In their appeal to the LSC the Solicitors had originally contended that they should have the maximum five points in respect of the criterion relating to employment of new staff, rather than the two originally awarded. That was on the basis that they had made a mistake in the bid by mis-describing a supervisor as a caseworker. The LSC would not entertain an argument on appeal that amounted to an alteration to the original bid. That is because to do so would disadvantage other bidders. The appeal resulted in a revision of the award to three points by re-assessing the information provided in the bid. It is no longer suggested by the Solicitors that they could have been awarded more than three points under this heading.    [Back]