Challenging an award decision under the NHS Provider Selection Regime

The Health Care Services (Provider Selection Regime) Regulations 2023, which regulate the procurement of most health care services in England, have not generated decided cases since their entry into force on 1 January 2024. This is perhaps unsurprising, given that the intention behind the Regulations was to prioritise “local resolution of disagreements which should in most cases obviate the need for further escalation”.¹ However, there remain interesting questions as to what the Regulations require and how they will be enforced, and it seems likely that urgent injunctions will have to be sought in some cases. This article highlights some key issues that litigants may encounter.  

The 2023 Regulations 

The 2023 Regulations exempt the procurement of most health care services from the detailed regime which is currently contained in the Public Contracts Regulations 2015 (“PCR15”) and which will be replaced by the Procurement Act 2023 later this year. For these purposes, health care services are defined by reference to a list of CPV codes taken from the EU CPV Regulation (2195/2002, as amended), although not everything falling within the health services group of CPV codes is included.  

Under the 2023 Regulations, NHS bodies (and certain other procuring authorities) have five options when procuring health care services of this nature (or mixed contracts which involve health care services, in certain limited situations). The options are, in broad summary: 

• Direct Award Process A, where there is only one possible provider;
• Direct Award Process B, where patients have a choice of provider, and the authority will enter into contracts with all providers;
• Direct Award Process C, which can be used to renew a contract where the contract will not be subject to a “considerable change” and the authority is satisfied with the current provider;
• the “Most Suitable Provider Process”, which can be used where the authority considers that it can choose its provider based on a comparison of providers (rather than the evaluation of bids); and
• the Competitive Process, involving the evaluation of bids. 

The 2023 Regulations lay down specific conditions which the authority must consider satisfied when choosing which process to adopt. They also impose specific duties on the authority, including a duty to act “fairly, transparently and proportionately”.   

The latter three options (Direct Award Process C, the Most Suitable Provider Process and the Competitive Process) each require (among other things) that the authority publish a notice of intention to award the contract, then observe an 8-working-day standstill period before concluding the contract. During the standstill period a disappointed provider can submit “written representations” if it considers that the Regulations have not been followed, in which case the authority must consider the representations and decide whether to maintain its award decision; the authority must also observe a further 5-working-day standstill after issuing its decision as to whether to maintain the award.  

Regulation 23 notes that the authority “may seek or otherwise receive independent expert advice” from “a person with relevant expertise, qualifications or experience who is made available by, or endorsed by, NHS England or the Secretary of State”. For this purpose NHS England has established the “Independent Patient Choice and Procurement Panel”. The statutory guidance accompanying the Regulations states that, if a provider is dissatisfied with the outcome of the written representations process, it “may seek the involvement of the panel”, following which the panel “may consider whether the [authority] complied with the regulations and may provide advice to the [authority]”. If the provider requests a review by the panel within the 5-working-day standstill period following completion of the written representations process, then “the standstill period should continue, other than in exceptional circumstances”, and if the panel accepts the request the standstill period “should not end until the [authority] makes a further decision having considered the advice provided by the [panel]”.²  

What remedies are available to a disappointed provider? 

The Regulations contain no provision for applications to the court to enforce their requirements, nor for actions for damages, and the legislative policy was that any formal legal challenge to a decision made under the Regulations should be brought by way of judicial review.³  

There may in addition be some prospect of an action for damages for breach of an implied tender process contract of the kind recognised in Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195. However in practice this seems likely to be possible only where a Competitive Process has been run, since the other “options” under the Regulations do not involve the submission of tenders. Furthermore the obligations implied by such a contract will usually be relatively limited (normally requiring the authority only to consider all tenders in good faith), and are unlikely to arise if the authority uses standard disclaimers in its tender documents.⁴ The scope for successful damages claims of this nature is therefore likely to be limited. 

Alternative remedies must first be exhausted 

A claimant bringing a judicial review claim seeking to enforce the requirements of the Regulations will be required first to have exhausted alternative remedies. If the claimant is a disappointed provider and the circumstances are such that the “written representations” process was available under the Regulations, this seems relatively likely to mean that the provider must first have used that process to make its allegations of unlawfulness directly to the procuring authority, before a judicial review claim will be allowed to proceed.⁵  

It is less clear whether the independent panel process laid down by the statutory guidance is an alternative remedy which must be exhausted prior to a judicial review claim. Where the panel reviews a procurement decision it will provide advice to the authority, following which the authority will make “a further decision having considered [that] advice”. It seems arguable therefore that the panel process is not an alternative remedy for JR purposes, on the basis that the panel will have “no power or status” to decide formally on matters of law, nor “to require the [authority] to reverse its decision”.⁶  

Interim injunctions 

As a general matter, if a provider can show in judicial review proceedings that a contract was awarded in breach of the Regulations, the court is nonetheless likely to refuse to quash the contract if it has already been concluded with the authority’s chosen provider. In fact the court may refuse all relief in this situation due to possible prejudice to third party rights and to good administration.⁷  

This may create particular hardship in situations where an authority has awarded and concluded a contract in reliance on Direct Award Process A or B, since the Regulations require only that the authority publish a post-award notice when conducting those processes, and an aggrieved claimant may therefore have no realistic opportunity to bring proceedings prior to conclusion of the contract. It may be that the case law develops in new ways if proceedings are brought in this situation.  

Perhaps more importantly, where a judicial review claim challenges an award made pursuant to Direct Award Process C, the Most Suitable Provider Process or a Competitive Process (in which contexts the authority must observe a standstill period before concluding the contract), the claimant is likely to need to ensure that the contract is not concluded before the proceedings are finally determined.  

In some situations the authority may agree to refrain from concluding the contract pending hearing of the claim. However it is questionable whether the provisions in regulation 14 would enable an “emergency” award or extension of an existing contract to “cover” the period until the claim is heard, so it is possible that an authority in this situation could be left without a contract. Furthermore the absence of a damages remedy may embolden authorities to adopt a less conciliatory approach to litigation, so that agreed extensions to standstill periods may not be available as a matter of course.  

If the authority will not agree to extend the standstill period, the claimant seems likely to need to apply for an interim injunction preventing conclusion of the contract, in order to preserve its ability to seek substantive remedies in its claim. In principle, if the “written representations” process has been followed, and the authority is not prepared to agree to any extension of the 5-working-day standstill period which follows that process, the claimant’s application for an interim injunction would need to be filed with the court and heard within those five working days.  

Such an application is likely to be made on an urgent basis and without formal notice (thus requiring a return date). In principle, the application will be decided on the basis of a “modified” American Cyanamid test (given that damages are unlikely to be available to the claimant if an injunction is not granted), focussing on the question whether the claimant has a realistic prospect of success and on where the “balance of convenience” lies.⁸ Among other things, the claimant will therefore need to be able to provide a detailed account of the grounds for the intended claim when making the injunction application. The claimant is also likely to have to undertake to issue the substantive claim shortly after the injunction application is heard (see PD 25A, §5.1) and there seems to be a good chance that, if an injunction is granted, the court will be asked to expedite the hearing of the substantive claim.   

In practice, seeking an injunction within the 5-working-day standstill period following the written representations process is likely to be challenging. It may be helpful if written representations are prepared with a potential urgent application in mind (and in such a way that they can quickly be turned into a formal judicial review Statement of Facts and Grounds if required), but this too is likely to be challenging given the short deadline for written representations. There is therefore some reason to think that litigation to enforce the Regulations may be even more high-pressure (at least in the initial stages) than claims under the PCR15.  

Obtaining information 

It is well known that claimants often face difficulties in obtaining relevant information and evidence in public procurement proceedings. The Regulations contain provisions designed to provide a degree of transparency, including requirements to include reasons in published notices, and requirements to record “a description” of the process followed and provide that information on request to a disappointed provider which submits written representations.⁹ Nonetheless it seems likely that claimants will seek underlying evidence of the authority’s evaluation (of bids in a Competitive Process, or perhaps of providers a Most Suitable Provider Process), for example in support of an assertion that the authority failed to comply with its express duty to act fairly. 

In this situation, there may be a strong argument that the authority’s duty of candour in judicial review proceedings extends to providing the underlying evidence – and that an (exceptional) application for disclosure ought therefore to be unnecessary.¹⁰ This may in turn mean that, where information is not provided up-front, claimants seek the costs of subsequent amendments of their Grounds (etc) based on allegations of breach of the duty of candour. Issues regarding the need to avoid disclosing confidential information of other providers also seem likely, and the sections of the TCC Guidance Note on procurement claims which address confidential information may be instructive.¹¹  

1 Government response to supplementary consultation, section 8 (https://www.gov.uk/government/consultations/provider-selection-regime-supplementary-consultation-on-the-detail-of-proposals-for-regulations/outcome/provider-selection-regime-supplementary-consultation-on-the-detail-of-proposals-for-regulations-government-response#section-8-independent-review-of-decisions-made-under-the-psr)

2 The Provider Selection Regime: statutory guidance, available at https://www.england.nhs.uk/long-read/the-provider-selection-regime-statutory-guidance/ (accessed 15 May 2024)

3 Government response to supplementary consultation (above), section 8

4 See e.g. Adferiad Recovery v Aneurin Bevan University Health Board [2021] EWHC 3049 (TCC) at [139]; Excession Technologies Limited v Police Digital Service [2022] EWHC 413 (TCC) at [162]; Dukes Bailiffs v Breckland Council [2023] EWHC 1569 (TCC) at [103]

5 See e.g. R v East Sussex County Council ex parte W [1998] 2 FLR 1082 at 1091-3

6 See R (Smith) v North Eastern Derbyshire Primary Care Trust [2006] EWCA Civ 1291 at [9]

7 See for example Whitstable Society v Canterbury City Council [2017] EWHC 254 (Admin) at [114]-[115] and [125]-[127]

8 See e.g. R (Medical Justice) v Home Secretary [2010] EWHC 1425 (Admin) at [6]-[16]

9 2023 Regulations, rr. 12(4)(b) and 24(e) and (f)

10 See e.g. R (AHK) v SSHD [2012] EWHC 1117 (Admin) at [22]; see further PD54A §11.1

11 Technology and Construction Court Guide (October 2022), Appendix H, paragraph 27 et seq.