Procurement challenges typically involve proceedings being brought against the body conducting the procurement process.

But where the cause for complaint is the approach taken by the winning bidder, could there be a right of action against that bidder?

FACTS

Moray Off-Shore Renewable Power Limited v. Bluefloat Energy Holdings Limited [2023] CSOH 29 concerned the auction by Crown Estate Scotland of parts of the Scottish seabed for off shore wind developments. The pursuer had been unsuccessful in its bid for a floating windfarm site.

The defender was part of a consortium of bidders for the site in question. The pursuer's position was that certain claims made by the defender in their successful bid, about the experience and expertise of members of the consortium were materially inaccurate. The pursuer maintained that had the bid proceeded on the basis of accurate statements of experience, the pursuer would have won, or would have had at least a material chance of winning. It argued that the defender had committed the delicts (the Scottish equivalent of torts) of causing loss by unlawful means and also of a conspiracy to cause loss by unlawful means. It sought £400m in damages.

DECISION

Lord Sandison identified that to make out the delict of causing loss by unlawful means, four matters required to be demonstrated:

• 1. that the defender intended to cause economic harm to the pursuer;
• 2. that the defender's actions amounted to a wrong actionable at the instance of a third party (here, Crown Estate Scotland);
• 3. that the unlawful action affected the third party's freedom to deal with the pursuer; and
• 4. that the unlawful means caused the pursuer loss.

To make out the delict of conspiracy to cause loss by unlawful means, the same matters required to be demonstrated (except that there is no requirement to demonstrate that the wrong is actionable at the instance of a third party). In addition, a conspiracy to cause loss required to be demonstrated.

The defender argued (at a diet of debate - a preliminary hearing - and therefore before any evidence was led) that the pursuer's pleadings were not sufficient to support the case presented by it. Lord Sandison agreed. In particular, Lord Sandison advised that even if the pursuer was able to prove everything in its pleadings, there was no basis upon which it could be concluded that the pursuer would have won the site competition or even that it had been deprived of a sufficient chance of winning the competition to allow it to pursue a claim for the loss of that chance.

COMMENT

Although the pursuer in this case was unsuccessful, the case highlights that the route for compensation for an unsuccessful bidder in a procurement process is not necessarily restricted to a claim against the body conducting the procurement process. In the right circumstances, there is scope for a claim against other bidders, particularly where a material inaccuracy in the bid documentation can be identified. Such claims are also not constrained by the short timescales (often 30 days) associated with challenges in respect of the procurement decision itself.  

Whilst this claim was pursued in Scotland, the law applicable in many other jurisdictions (including England & Wales) would allow for the pursuit of a claim on a similar basis - and we may well start to see challenges of this nature becoming more frequent.