Court of Appeal considers in procurement case when respondent’s notice is cross-appeal in disguise

The Court of Appeal has ruled on the correct use of a respondent’s notice in a dispute over the award of an NHS contract for orthodontic services in East Hampshire.

Provider Braceurself had supplied this service but lost out narrowly when the contract was renewed.

Braceurself made a claim for breach of the NHS's statutory procurement obligations based on what it said were manifest errors in the tender evaluation.

NHS England had meanwhile awarded the contract and the case become one for a declaration and damages.

In February 2021, Mr Justice Fraser ordered a split trial between liability and quantum, with liability heard first and to include whether any breach was sufficiently serious to merit damages.

Alexander Nissen KC, sitting as a deputy High Court judge, found the NHS had made a manifest error as it misunderstood Braceurself's bid over access to the first floor premises and availability of a stair-climber and of alternative premises.

This brought Braceurself’s score in below that of a competitor but it would otherwise have won the contract.

Lord Justice Coulson said in a judgment also contributed to by Lady Justice Simler and Lady Justice Whipple that the Court of Appeal was asked to decide when a Respondent's Notice is really a cross-appeal in disguise.

In Braceurself Ltd v NHS England [2023] EWCA Civ 837 he said: “The issue matters because, if the NHS's Respondent's Notice is, in reality, a cross-appeal, then they need permission in order to bring it, whilst if it is a proper Respondent's Notice, they do not.”

NHS England decided to appeal against the finding of manifest error, arguing the judge had failed to attach proper weight to the access requirements of parents with buggies and that he discounted the evidence of the evaluators that, even if they had known there was a stair-climber, not a stair-lift, it would probably not have changed their mark.

The NHS submitted it was seeking to uphold the judge’s order but for other reasons, and could use a Respondent's Notice to raise other grounds for concluding the claim against the NHS had been rightly dismissed.

It said a successful defendant was entitled to raise matters unconnected to the claimant's grounds of appeal, but which did not alter the ultimate result. Braceurself argued the Respondent's Notice was a cross-appeal.

Coulson LJ said: “We acknowledge that this case has raised an issue which not uncommonly arises in the Court of Appeal Civil Division, namely the scope and range of the matters raised in a Respondent's Notice.

“It seems to us that this problem arises from time to time because the test - namely whether the respondent is seeking to appeal or vary the order, or merely upholding it on other grounds - is a blunt one. It means that, in theory, there is nothing to stop a successful party facing an appeal from raising, by way of a Respondent's Notice, all and any of the points on which it was unsuccessful before the judge. That would make a mockery of Fage.

“It also means that, in a particular case, the court may end up treating the successful party more generously than the losing party which, notwithstanding the 'special position' of a successful party, is never an entirely comfortable outcome.”

Coulson LJ said if the blunt tests were removed it was unclear what would replace it.

He said: “We have already said that it could not be by reference to separate issues, because on one view that is too general, and on another, especially in the wrong hands, it could become too granular.

“No other test or dividing line immediately suggested itself. If it was suggested that the test should be scrapped altogether, and it became the rule that all Respondent's Notices should be the subject of a permission application, then that would require wide consultation and the involvement of the Civil Procedure Rules Committee. Beyond drawing this issue to their attention, which we will, those are not matters for us.”

The Court of Appeal concluded NHS England did not require permission to appeal to raise the grounds in its Respondent's Notice.

Commenting on the case, Aisha Wardell and Jared Ursell of Acuity Law, who acted for Braceurself. said: “The NHS lodged a Respondent’s Notice, seeking to uphold the order of Alexander Nissen KC for other reasons.

“Those points raised in the NHS’ Respondent’s Notice attracted initial concern from the Court of Appeal, due to the fact that, on the face of it, in advancing those points the NHS was effectively asking the Court of Appeal to overturn the earlier finding of manifest error, rather than dealing specifically with the ‘Francovich’ damages issue in respect of which Braceurself was appealing.”

Acuity Law said the difference between the two positions was significant depending on whether the NHS needed permission to appeal.

It said the Court of Appeal found that the NHS was not required to seek permission to appeal because no question of an appeal arose on either side until the ‘Francovich’ damages issue was decided.

Acuity Law commented: “The Court of Appeal did, however, acknowledge that the current position is an uncomfortable one, in that it has the potential to place a respondent in a more favourable position than an appellant; given save for permission being granted by the lower court, an appellant will always require permission to appeal in respect of every ground of appeal advanced, whereas a respondent is not faced with the same level of (or indeed any) scrutiny at permission to appeal stage.”  

The firm added that the court’s decision to raise the issue with the Civil Procedure Rules Committee “suggests that the Court of Appeal acknowledge that the law in this area is currently unsatisfactory”.

Mark Smulian