High Court lifts automatic suspension in procurement dispute over £46m care and support services contract, refuses expedited trial

Damages will be a sufficient remedy in a procurement dispute over the provision of community equipment services and technology enabled care and support services should the claimant succeed against Devon County Council, the High Court has concluded.

Anneli Howard KC, sitting as a deputy High Court judge, heard the case brought by Millbrook Healthcare, which counsel for both sides said provided “important guidance on the legal principles applicable to applications to lift automatic suspensions in procurement disputes in relation to the adequacy of damages as a remedy for a claimant”.

Millbrook has supplied the services to Devon for seven years.

The council in 2023 tendered a new contract for five years with an optional two-years extension valued at some £46m.

It decided to award this to rival bidder Nottingham Rehab whose total score of 75% exceeded Millbrook’s 72.5%.

Millbrook raised concerns regarding NRS’s information security and financial standing - subjects among the pass/fail selection criteria - contending its rival had fallen victim to a cyber security incident.

Devon investigated the matter but the resulting standstill agreements were terminated on 23 January 2025 with the decision unchanged.

Millbrook sought a declaration Devon breached its obligations in the Public Contracts Regulations 2015, and an order to either award the contract to Millbrook or re-run the exercise. It also sought damages and interest.

The judge concluded there was a serious issue to be tried and that damages would form an adequate remedy for Millbrook.

Millbrook claimed that were the contract awarded to Nottingham Rehab once the suspension was lifted it would “suffer a very large loss of profits, running to millions of pounds, which would be difficult to quantify” and that there would be a staff exodus, degradation in service quality, loss of market share and a reduced capacity to invest in technology and service improvements.

Anneli Howard KC said: “As a starting point, most of the points raised by the claimant to establish prejudice are made by mere general assertions, without supporting evidence.“

She continued: “Secondly, to the extent that Millbrook faces loss of profits as a result of losing its incumbent position, that is very much part of life.”

The Devon contract was a sufficiently small part of Millbrook’s business that: “I do not find it compelling that the loss of one single public sector contract, for a fixed term of seven years maximum, and of modest value and profitability, would undermine the claimant’s entire business model or its ability to win new work from other local authorities”, the judge said.

There was “no credible evidence” of a staff exodus and “I cannot see that the loss of a single contract out of many others would undermine Millbrook’s reputation, in a sector where it is evident that contracts are put out to tender at regular intervals and often move between service providers”.

The judge dismissed Millrook’s other arguments and concluded: “In all of these circumstances I find that it is just and appropriate to confine the claimant to a remedy in damages, which will be adequate to remedy any breach.”

She also rejected the claimant’s application for an expedited hearing, noting that the backlog of cases and the 10-12 days hearing needed would delay any ruling until late 2027-28.

This meant lifting the automatic suspension “is likely to carry the least risk of injustice”.

Commenting on the case, Joseph Barrett KC of 11KBW, sole counsel for Devon and Patrick Halliday, also of 11KBW, sole counsel for Millbrook, said: “The court’s judgment provides important guidance on the legal principles applicable to applications to lift automatic suspensions in procurement disputes in relation to the adequacy of damages as a remedy for a claimant.

“In particular, the court's judgment provides the first detailed discussion of whether damages should be regarded as an adequate remedy for a claimant where the defendant has denied that any breach was ‘sufficiently serious’ to sound in damages.”

They noted Millbrook had argued that damages were an inadequate remedy because it might succeed at trial in respect of breach of duty and causation, yet obtain no damages because the breach might not be regarded as ‘sufficiently serious’ and that, since lifting of the suspension would preclude a ‘set aside’ remedy, it might therefore be left with no substantive remedy at all.

“The court rejected this contention, holding that the application of the ‘sufficiently serious’ breach criterion is irrelevant to the court’s assessment of the adequacy of damages as a remedy,” they said.

“The court’s decision is likely to have significant implications for the conduct of procurement disputes. In future, contracting authorities may no longer offer a concession to a claimant that any breach which deprived the claimant of the contract will be sufficiently serious to entitle it to damages.”

Mark Smulian