Insert Judge title and name here :
- This is the hearing of a preliminary issue expressed in the following terms: -
"Is the Claimant's claim barred by the operation of Regulation 32(4) of the Utilities Contracts Regulations 1996?"
It is accepted by both parties that this issue involves both a determination of the operation of the bar provided by that regulation and the question whether any extension should be granted in accordance with its terms.
- Regulation 32(4) reads as follows: -
"Proceedings under this regulation may not be brought unless-
(a) the provider bringing the proceeding has informed the utility of the breach or apprehended breach of the duty owed to him pursuant to paragraph (1) [or paragraph (1A)] above by that utility and of his intention to bring proceedings under this regulation in respect of it; and
(b) they are brought promptly and in any event within 3 months from the date when grounds for the bringing of the proceedings first arose unless the Court considers that there is good reason for extending the period within which proceedings may be brought."
- The Utilities Contract Regulations 1996 are contained in a Statutory Instrument enacted pursuant to EU Directives 92/13 and 93/38. These Directives relate to the opening up of procurement to community competition in the Utilities sector with provisions made for appropriate review and enforcement procedures under national law. In the preamble to the 1992 Directive, reference is made to the need to provide for a substantial increase in the guarantees of transparency and non-discrimination and, in order for the provisions to have tangible effect, for effective and rapid remedies to be available. In the 1993 Directive, procedures for the award of contracts by public utilities companies were laid down, including the requirement for a call for competition by means of different types of notice which would come to the attention of potential contractors.
- In essence the Regulations issued pursuant to those Directives provide for three types of procedure leading to the award of a contract, namely a "negotiated procedure", an "open procedure" and a "restricted procedure". The last mentioned procedure means a procedure leading to the award of a contract whereby only persons selected by the utility as satisfying certain objective criteria may submit tenders for the contract. In this context the relevant regulations are as follows: -
"15 Call for competition
(1) Subject to regulation 16, for the purposes of seeking offers in relation to a proposed contract a utility shall make a call for competition.
(2) The requirement under paragraph (1) above to make a call for competition shall be satisfied
(a) In the case of a contract to be awarded using the restricted or negotiated procedure
(ii) if a notice indicating the existence of a qualification system for providers has been sent to the Official Journal in accordance with regulation 18(12) and the requirement referred to in paragraph (4) below is satisfied; or
(4) The requirement referred to in paragraph (2)(a)(ii) above is that the providers selected to tender for or to negotiate the contract are selected from the candidates who qualify in accordance with the system.
18 Qualification system for providers
(1) A utility may establish and operate a system of qualification of providers if that system complies with the following paragraphs of this regulation.
[(1A) The utility shall permit providers to apply for qualification under the system at any time.]
(2) The system may involve different stages of qualification and shall be based on objective rules and criteria as determined from time to time by the utility using European standards (within the meaning of regulation 12(1)) as a reference when they are appropriate.
(3) The rules and criteria shall be made available on request to providers and any amendment of those rules and criteria shall be sent to them as the amendment is incorporated into the system.
(4) A utility may establish a system of qualification pursuant to which a provider may qualify under the system of, or be certified by, another person, and in those circumstances the utility shall inform providers who apply to qualify of the name of that other person.
(6) In determining what rules and criteria are to be met by applicants to qualify under the system and in determining whether a particular applicant does qualify under the system a utility shall not impose conditions of an administrative, technical or financial nature on some providers which are not imposed upon others and shall not require tests or the submission of evidence which duplicates objective evidence already available.
(8) An application may only be refused if the applicant fails to meet the requirements for qualification laid down in accordance with paragraph (2) above.
(12) The utility shall send a notice [in the form of the qualification system notice in Annex XIII to the Utilities Directive] and containing the information relating to the qualification system therein specified to the Official Journal when the system is first established and, if the utility expects to operate the system for more than three years, or if it has operated the system for more than three years, it shall send additional notices annually.
19 Selection of providers in the restricted or negotiated procedures
(1) A utility using the restricted or negotiated procedure, with or without a call for competition, shall make the selection of the providers to be invited to tender for or to negotiate the contract on the basis of objective criteria and rules which it determines and which it makes available to providers who request them.
20 Consortia and Corporations
(2) A utility shall not treat the tender of a consortium as ineligible nor decide not to include a consortium amongst those persons from whom it will make the selection of persons to be invited to tender for or to negotiate a contract on the grounds that the consortium has not formed a legal entity for the purpose of tendering for or negotiating the contract; but where a utility awards a contract to a consortium it may, if to do so is justified for the satisfactory performance of the contract, require the consortium to form a legal entity before entering into, or as a term of, the contract.
21 Criteria for the award of a contract
(1) Subject to regulation 22, a utility shall award a contract on the basis of the offer which
(a) Is the most economically advantageous to the utility; or
(b) Offers the lowest price.
(2) The criteria which a utility may use to determine that an offer is the most economically advantageous include delivery date or period for completion, running costs, cost effectiveness, quality, aesthetic and functional characteristics, technical merit, after sales service and technical assistance, commitments with regard to spare parts, security of supply and price."
- The subject matter of dispute in this action is the process for the selection of contractors adopted by the Defendant (STW) for its five year Asset Management Programme running from 2005 to 2010. As the fourth five-year programme it is known as AMP4. It is of considerable total value being somewhere in the region of £1.5 - £2 Billion. The work involves the maintenance, renewal and improvement of reservoirs, pipelines, pumping stations, treatment plants and sewerage systems. There is therefore self-evidently a requirement for contractors to be both substantial and reliable. The Claimant (Holleran) was not one of the main contractors engaged in STW's previous five-year programme, AMP3, although it had been engaged by a main contractor on subcontract work.
- For AMP4, STW, like many other utility companies, decided to engage the professional help of an organisation named Achilles to assist it in the selection of contractors. Achilles is said to run a qualification system based on a computer database of contractors operating in the utilities sector known as the Utilities Vendor Database, commonly referred to as UVDB. Achilles offers a number of different services to both utility companies and contractors.
i) One service ("UVDB Buyer") enables utility companies to interrogate the database using set parameters to shortlist contractors which they might wish to approach to take part in a tendering exercise.
ii) Another service offered to utility companies ("UVDB Verify") is the standardised verification and assessment of all potential contractors in respect of their systems and processes for health and safety, environmental and quality of work.
iii) A further service effected by Achilles is that of assisting utility companies with the object of complying with the requirements of procurement legislation including a "call for competition" which, in accordance with Regulation 15(2)(2), in the case of a qualification system, requires a notice in the Official Journal of the European Union (OJEU) that satisfies the requirements of the Regulations and follows the format of Annex XIII. This refers to Common Procurement Vocabulary Codes (CPV) but made it plain that these were not a compulsory component of such a notice. Achilles drafted a notice for STW for a qualification system which was intended to apply to AMP4. This was approved by Mr. Goddard of STW and was sent for publication in the OJEU. Although the approved draft contained various CPV codes, including particularly those for "collected and purified water and water distribution" and "construction work", for reasons which are not apparent, the OJEU did not include these particular codes amongst those which were included in the Notice.
- STW draws attention to the limited requirements for a call for competition in the case of a qualification system, being first the sending of a notice indicating its existence to the OJEU (following the format of that set out in Annex XIII of the Utilities Directive); secondly the provision of the rules and criteria of the system to those who ask to see them and any amendment thereto and; thirdly, the need to ensure that the contractors ultimately selected are selected from those who qualify in accordance with those rules and criteria. The utility does not, apart from the Notice or on request, have to make any public or other pronouncement of its intentions or ask any contractor to do anything. Invitations to tender would follow after "pre-qualification" under the qualification system and other requirements then applied, which are of no relevance here.
- The qualification system adopted by utility companies including STW, required contractors who wished to qualify to register on the Achilles UVDB database with information about themselves so that "pre-qualification" could be effected by reference to the database.
- From the evidence, it appeared that STW always had a criterion relating to turnover for its main contractors in each of its preceding programmes. In the case of AMP4, this criterion became public pursuant to a request by a potential contractor under Regulation 18(3) and the publication of the answer to that request on STW's website on the 25th July 2003.
- Holleran issued proceedings on the 11th November 2003 preceded by letters of the 7th November and 10th November setting out the gist of its complaints. In essence the complaints, as now set out in the Particulars of Claim, are as follows: -
i) A claim that, when sending a Qualification Systems Notice to the OJEU on 12th May 2003, which was published on 20th May 2003, STW failed to comply with the requirements of the Regulations inasmuch as the document did not adequately notify the existence of a Qualification System or set out a call for competition in respect of the project AMP 4 which STW was planning. No failure to comply with the express requirements of Annex XIII appears to be alleged.
ii) A claim that, in breach of the Regulations, potential contractors were not treated fairly and equally, inasmuch as some (namely previous main contractors) received a letter dated 9th June 2003 telling them of the Notice in the OJEU and inviting them to a workshop on the 19th June 2003 when presentations were made of the selection process to be employed for AMP 4.
iii) A claim that on 25th July 2003, unfair selection criteria were posted on STW's website including a requirement for a contractor to have an annual turnover of £32 M and stating that consortia could be formed to meet this requirement between entities individually registered with Achilles UVDB, but that information about any such joint ventures would have to be made known to STW in writing by 1st August 2003. Holleran maintains that the publication of these criteria and the time scale imposed were inappropriate and unreasonable and amounted to discrimination against potential consortia, including Holleran who would have wished to form such a joint venture, if it had known of the criteria with sufficient time to do so.
iv) A claim that, in response to Holleran's letters of 11th and 27th August 2003, STW breached the Regulations in confirming that Holleran, having an annual turnover of less that £32 M, was out of time in respect of any notification of a joint venture and in refusing to extend the time for doing so.
The relevant events
- On 12th May 2003 STW, by their agents Achilles sent a notice to the OJEU which was published on 20th May. That notice referred to the qualification system and the use by STW of the UVDB as a common system for the registration of suppliers, contractors and service providers. It included the following wording: -
1.3 "The UVDB will be the first stage of qualification and will either be used as the basis for tenderer selection or may be supplemented by additional qualification criteria established by the utility in specific product or service areas. The UVDB will also be used as the first stage of qualification for contractors and engineer consultancy service providers for AMP4 (2005-10) which will also include UVDB verify process"
"Suppliers or contractors who have already registered on the UVDB need not reapply but may wish to ensure that they are entered under all relevant product service categories"
This notice is a call for competition: yes"
- The evidence of Mr. Holleran, the chief executive officer of Holleran, and of Mr. Webber the commercial director (whose role and responsibilities included the seeking of new work, pre qualifying and tendering, together with post tender negotiation of contracts), was that Holleran had been registered on the UDVB database for many years by the time of the events in question. Holleran subscribed to the UVDB standard service to keep its registration information updated so as to be able to pre-qualify with purchasing organisations which used it for that purpose. In addition Holleran subscribed to the Supplement to the OJEU and, in consequence, was sent two CD ROMs a week which contained the latest procurement information and tender notices for the whole of Europe, including the UK. Once accessed, a subscriber had the benefit of using a search facility to find the latest tenders. Despite such subscription, it was Mr. Webber's evidence that he did not find anything to suggest that the STW AMP4 process had commenced and was unaware of this until 7th August. It appeared from his statement that he was saying that he had failed to see STW's OJEU Notice on the 20th May when it was published and was unaware of its existence until 11th August 2003 but in oral evidence he made it plain that he had seen the notice but had not realised that it took effect as a "call for competition" for AMP4. Mr. Holleran's evidence was that he was unaware of the existence of the procurement process for AMP4 until 27th August 2003 when his attention was drawn to an article in Construction News which referred to the fact that AMP4 selection had commenced and that the list of pre qualifying contractors had been drawn up.
- In addition to the OJEU Notice of 20th May 2003, there appeared from 21st May 2003 onwards on the STW website an item referring to the selection of AMP4 contractors, consultants and suppliers, explaining that the first stage of the process had commenced with the notice in the OJEU. The entry referred to the use of UVDB to aid the selection process, as administered by Achilles and stated that the initial filtering stage for AMP4 contractors and consultants would not be carried out before 18th June but was likely to be completed by early July 2003 with the hope of informing those who pre qualified by mid July 2003 and completion of the whole process by March 2004.
- On the 9th June 2003, STW wrote to the main contractors on AMP3 to inform them that it had embarked on its AMP4 contractor and consultancy selection, outlining the process which had been set out in its website entry of 21st May 2003. It referred to a supplier workshop on the afternoon of Thursday 19th June to explain the selection process in more detail and to highlight some of the benefits of using Achilles. At that workshop a series of slides were shown in presentations by STW and UVDB. Copies of those slides also appeared on STW's website from 23rd June 2003 onwards.
- Notwithstanding references in the New Civil Engineer magazine (a publication sent out by the Institution of Civil Engineers to its members) on 10th July 2003 to STW seeking bids for work on projects two years ahead of start date, Mr. Webber and Mr. Holleran maintained that they remained ignorant of this and of the earlier entries on STW's website. They also said they knew nothing of the entry on STW's website of 25th July 2003 which referred to the rules for application by joint ventures and the UVDB selection criteria, which included the requirement for an annual turnover of £32 M for "Infrastructure Contractors" (amongst other requirements). For specialist contractors for infrastructure the annual turnover requirement was set between £2 M and £32 M. The website entry also made it clear that any company wishing to apply as part of a joint venture or similar consortium was required to express that intention to STW in writing before 1st August, listing all members of the consortium, all of which had to be individually registered with Achilles UVDB.
- The pre-qualification list of contractors was drawn up using Achilles UVBD by the 6th August. Holleran, with a turnover of less than £32 M, did not qualify in the main infrastructure supplier list but did qualify for the specialist sewerage supplier list. Both lists were posted on STW's website on 6th August and, by e-mails on 7th August, STW notified all those who had been included on those lists. The e-mail to Holleran stated that Holleran had met all the criteria specified for that stage of the selection process and referred the reader to the STW website for information on the next stage of the process. It was only by accessing that website that Holleran could have found out that it qualified in the "specialist sewerage" category but not in the "infrastructure" category.
- Mr. Webber's evidence was that, notwithstanding the fact that he had regularly searched the CD roms for relevant OJEU Notices by using key words such as "water" and "pipe", he only became aware that the STW procurement process had begun on receipt of the e-mail to Holleran on 7th August 2004 which referred to successful pre-qualification for AMP4 and required the recipient to refer to the STW website for the next stage of the procurement process. He tried to log onto the STW website that day but for reasons which he could not explain, he said he could not locate any link to the procurement section. He therefore managed to obtain the relevant information on the 11th August after being resent by fax STW's original e-mail of the 7th by an old friend who worked for another potential contractor.
- On Holleran's file there appears a fax dated the 11th August which encloses a copy of the 7th August e-mail and a number of excerpts from STW's website, including the entries of 21st May 2003, 23rd June 2003, 25th July 2003 and the list of pre qualifying contractors in each category. Thus Holleran would have discovered that it had pre-qualified for sewerage work but not for main infrastructure work, and would also have discovered the turnover criteria.
- Mr. Webber realised that Holleran could not qualify for infrastructure work because its annual turnover was of the order of £16.5 M and not £32 M. He also appreciated that the deadline for joint venture applications was 1st August 2003. He then sent an e-mail to STW in the following terms: -
"Holleran wish to express their interest in being included in the contractor selection process and look forward to being given the opportunity of completing your pre-qualification questionnaire.
We note that Holleran's name has been placed under Specialist Sewerage for which we are indeed listed in UVBD. We are also listed under code 3.72.02 & 3.72.03, and also wish to be considered under the heading Infrastructure for which we would consider a joint venture relationship to achieve the £32 M turnover required. I also note on your web page that JV's should have been notified to STW by 1st August. Is it now too late to do so? I unfortunately did not pick up this information at the time it was posted and I seem to have missed out on your selection briefings."
- The response to this came from Mr. Bentley-Burton on 12th August in the following terms: -
"Thank you for your enquiry of 11th August. Unfortunately it is now too late to consider a JV for the infrastructure list as the deadline has now expired."
- According to Mr. Goddard, this e-mail was sent after Mr. Bentley-Burton had discussed the matter with him. He decided to reply in those terms because no reason had been advanced for extending the deadline and it would not be just to others if an extension were given. Mr. Webber's e-mail had simply said that he had failed to pick up the information about procurement at an earlier stage.
- Holleran draw attention to the fact that there were throughout this period serious disputes between Holleran and STW over main contractual work on AMP2 and selection for AMP3. There had been an Adjudication procedure between them which occurred over a period of three days on 21st, 22nd and 24th July. There was also a meeting on 20th August which was an attempt to resolve issues on AMP2 and AMP3. Mr. Holleran's evidence was that he was still seeking payment on AMP3 at that meeting and no mention was made about AMP4. He regarded it as unfair that throughout these contacts, Holleran's attention was never drawn to the fact that the AMP4 procurement process was in operation and saw this as deliberate concealment on STW's part.
- Mr. Webber said that he did not tell Mr. Holleran about the information he had ascertained on the 11th August nor about the exchange he had with STW on the 11th/12th. His statement says that he "simply took the pragmatic view that John Bentley's e-mail represented a lost opportunity and that even if we kicked up a fuss we would get nowhere. In other words I decided to devote my energies to something more productive than chasing what I assumed was a lost cause".
- Following his reading of the article in Construction News on 27th August, Mr. Holleran, on his evidence and that of Mr. Webber, spoke to Mr. Webber who explained that despite using tried and tested searching methods which worked for other water companies he had not ascertained that STW's AMP4 procurement had begun until 11th August. In his statement Mr. Webber attributes this at least in part to the absence of reference to the CPV codes for "collected and purified water and water distribution" and "construction work". Since it appeared from his oral evidence that he had found the relevant OJEU notice, this point was an irrelevance. The discussion between Mr. Holleran and Mr. Webber led to Mr. Holleran himself writing to Mr. Elliott of STW. In that letter he referred to the 7th August e-mail and the inability of Holleran to form a joint venture thereafter before the deadline for notification of consortia, which had already passed on August 1st. Reference was then made to the 11th August e-mail asking if it was too late to give notice of a consortium application and the response that it was too late. The letter concluded in the following terms: -
"If you are not in a position to rectify the position by extending the deadline, please advise us of the relevant details of the adverts placed etc. as we shall certainly be taking legal advice. It is our preliminary assessment that this work falls within the European Procurement Directives and therefore must be let in compliance with them."
- Mr. Elliott wrote in reply on 28th August. The letter included the following: -
"The information we previously supplied to you regarding request to be considered as a Joint Venture still stands. It will be inequitable to reopen the selection process for yourselves alone. For further information on our selection process please refer to our company website."
- The letter went on to refer to the article in Construction News, to STW's website and the questionnaire which would form part of the next stage of the selection process for the areas of work for which Holleran was, on STW's criteria, eligible. Mr. Elliott concluded by saying that STW's intention to follow the appropriate procedures in its selection process had been clearly demonstrated.
- In his statement, Mr. Holleran maintained that Mr. Elliott's letter was not only negative but did not give the details which he had requested in the event of a negative reply. Mr. Elliott's letter had however directed Mr. Holleran to read STW's website which contained all the details of the whereabouts of the OJEU Notice and the other material made available in relation to the process. Mr. Holleran said that he did not do so.
- On the 29th August, STW sent Holleran the STW questionnaire which formed part of the next stage of the selection process for the sewerage work and from there on, from time to time sent chasers to Holleran seeking completion of the questionnaire and participation in the verification process. An initial deadline was set for the 20th October but this was then extended to the 23rd October for completion of the verification questionnaire and to 28th October for the site audit.
- Contrary to Mr. Holleran's statement, when Mr. Elliott wrote on the 21st October 2003 to Mr. Holleran to point out that Holleran was the only contractor who had not yet completed the Achilles Verify process, this was not an unexpected letter since it followed up on earlier reminders. This was not an unexpected invitation to Holleran to apply for the sewerage contracts since Mr. Webber had, on the 11th August, expressed Holleran's interest in being included in the contractors' selection process questionnaire. Holleran had, in the intervening period after its receipt, put forward its difficulties in completing the verification questionnaire in the time scale, suggesting it could only do so by mid December.
- In response to Mr. Elliott's letter of 21st October, Mr. Holleran himself replied on the 29th October, the day after the deadline for the site Audit, and nearly a week after the expiry of the deadline for the questionnaire. In that letter he said that Holleran did not wish to be involved in small-scale specialist sewage work which was "high risk" without balancing clean water work. He thus indicated that Holleran had no interest in doing the sewerage work without being involved in the infrastructure work. Holleran nonetheless completed the verification procedure at a more leisurely pace.
- In his statement, Mr. Holleran said, in relation to the sewerage work which he had discovered on the grapevine to consist of contracts up to £2 M in value: -
"This work was high risk and was only suitable for companies with a full backup organisation in the area. Had we prospects in a share of the clean water work as anticipated when we took over the Eade organisation, I would have applied for this work as part of a wider service. Without such local resources, the dirty water work was too risky and too small to warrant importation of labour from other areas. Regretfully I had to decline the invitation. But I did think or at least hoped that the fact that Ian (Elliott) personally wrote to me represented at least a first move by STW towards rehabilitating us. I was conscious that the selection process was very leisurely and felt that some accommodation remained possible."
- Thereafter, nothing much happened between the parties. Mr. Holleran arranged for a meeting with his lawyers on the morning of the 7th November 2003 and, being then aware of some concern over limitation, a letter before action was sent that day followed by another letter on 10th November and the immediate institution of proceedings which were served the following day.
- The letter of 7th November 2003 expressly informed STW, pursuant to Regulation 32, that there had been a breach of the Utilities Contracts Regulations and of the intention to bring proceedings in the High Court for a declaration that the decision not to grant an extension of time for a consortium application was unreasonable and unlawful and/or to claim damages and/or other relief. The grounds for that contention were set out with reference to the implicit requirements for openness and transparency, for the overlooking of minor administrative oversights and by reference to Regulation 17(4), Regulation 20, equality of opportunity and provision of information, reasonableness, secretiveness, improper motivation and lack of prejudice to STW. In addition, a further ground was put forward which is no longer maintained.
- In the letter of 10th November, Holleran put forward two further grounds, namely that the OJEU Notice was not a valid or adequate call for competition in accordance with Regulation 15 as it did not notify a qualification system and, secondly, that the system proposed, being a system designed to last for more than three years, was subject to annual notices pursuant to Regulation 18(12), so that a purported attempt to make a five year once and for all selection was invalid.
The application of Regulation 32(4)
- Regulation 32(4)(b) requires that proceedings under the Regulation may not be brought unless they are brought promptly and in any event within three months from the date when grounds for the bringing of proceedings first arise, subject to the Court's power to grant an extension of that period. When considering when "grounds for the bringing of the proceedings first arose", it is clear that the claimant's knowledge or means of breach is of no relevance see Keymed Limited v Forest Healthcare NHS Trust  EuLR 71 per Langley J at page 91 93 and Jobsin Co UK Plc v DOH  EWCA 1241, a decision of the Court of Appeal agreeing with the reasoning of Langley J at paragraph 23. The short question is then when grounds for the bringing of the proceedings first arose, which as a matter of ordinary language means when the facts constituting the basis of complaint occur. In my judgment it is clear that each head of complaint must be considered separately as one complaint might be justified and another might not be. I reject STW's contention that all that matters is when grounds for the complaint which was first in time arose. Where each complaint is discrete and not simply a further incident of the same complaint, the question is when grounds for that particular complaint arose.
- In relation to the complaint as to the inadequacy of the Notice in the OJEU, this can only be, at the latest 20th May 2003 when the notice was published, although, having regard to the fact that the breach lies in sending the notice in that form, it appears that 12th May 2003 is actually the relevant date. Proceedings were plainly brought more than three months after that date, namely on 11th November 2003.
- The complaint in relation to discriminatory treatment of other potential contractors relates to the invitation to them to attend a workshop and the attendance at that workshop. It appeared from the evidence that there may have been two such letters and two such workshops on 9th May and 19th May and 9th June and 19th June respectively. On this basis also, the three month period expired considerably before 11th November 2003.
- The alleged publication of inappropriate criteria and an inappropriate timescale for consortia to comply with them took place on 25th July 2003 so that this alleged discrimination also took place more than three-months before the commencement of proceedings.
- What then remains are the complaints based upon the exchanges between the parties of 11th and 12th August, and 27th and 28th August.
i) Mr. Webber, in the first paragraph of the 11th August e-mail, referred to the positive pre-qualification in relation to sewerage contracts and expressed interest in completing the questionnaire and in selection for that work. In the second paragraph he expressed Holleran's wish to be considered for infrastructure work for which Holleran would consider a joint venture relationship to achieve the £32 M turnover needed. He then asked if it was too late to notify a joint venture because he had discovered the 1st August deadline. The short answer, given by STW on the 12th August, was that it was too late to consider a joint venture for the infrastructure list because the deadline had expired.
ii) On the 27th August Mr. Holleran, in his letter to STW, referred to the earlier letter as a request to be permitted to make an application and then asked for an extension of the deadline. The answer received was negative.
iii) In its statement of case, Holleran maintains that the letters of 12th and 28th August from STW, in refusing an extension of time, amounted to a breach of the regulations.
iv) It is hard to see how a request for an extension of time and a refusal can give rise to a free standing breach of the Regulations if the earlier alleged breaches do not amount to such. If an adequate notice was sent to the OJEU and if there was no discrimination in the later publications, whether those setting out criteria or deadlines, it cannot be a breach to maintain those criteria and deadlines when asked to vary or modify them in the absence of some extraordinary reason for so doing. When the only reason given for doing so is a failure to ascertain the existence, or understand the terms, of what were, on this hypothesis, a compliant notice, compliant criteria and compliant deadlines, without any unfair discrimination, there can be no question of any separate breach.
v) In reality, the letter of 12th August merely confirmed the deadline in circumstances where there had not been an express request for an extension. The letter of the 28th August did refuse an extension which had been requested the previous day but in neither case is it arguable that this amounts to an independent breach of the Regulations in the absence of any earlier breach.
vi) The clear purpose of alleging a breach on the 12th or 28th August is to bring a claim within the time limit prescribed by Regulation 32(4)(b) but, since these complaints are unarguable, they do not assist the Claimant. An attempt was made to link the 25th July allegation to the 12th and 28th August "breaches" and to suggest that the alleged discrimination of the 25th July did not constitute a completed breach of the Regulations until an extension of time was refused, but not only did the statement of case plead a completed breach on 25th July but it is self-evident that, if there was a breach in notifying a consortium deadline of 1st August, that occurred on 25th July and not at some later stage when an extension was refused.
- In these circumstances I need not consider whether or not there was a failure to bring the proceedings "promptly". It was argued that this requirement might breach the requirement of the European Convention on Human Rights in respect of the right to a fair trial because of the uncertainty involved in what was meant by "prompt". Reliance was placed upon the dicta of Lord Steyn at paragraph 53 and Lord Hope at paragraphs 59 66 in R (Burkett) v Hammersmith and Fulham London Borough Council  1WLR 1593, but the decision of the European Court in Lam v The United Kingdom application number 41671/98, 5th July 2001, (which was not cited in Burkett where the remarks were obiter), in relation to the comparable Order 53 rule 4(1) RSC shows that there is no breach of Article 6. The Court held as follows: -
"Insofar as the applicants impugn the strict application of the promptness requirement in that it restricted their right of access to a Court, the Court observes that the requirement was a proportionate measure taken in pursuit of a legitimate aim. The applicants were not denied access to a Court ab initio. They failed to satisfy a strict procedural requirement which served a public interest purpose, namely the need to avoid prejudice being caused to third parties who may have altered their situation on the strength of administrative decisions."
- In the case of the Regulations, there is undoubtedly a public interest purpose in the requirement for promptness as is shown by the European Directives, pursuant to which the Regulations were made. It is self-evident and also appears from other decisions on comparable regulations that, in the procurement context, the need for speed in raising complaints and dealing with them is vital, since the whole process of procurement is otherwise rendered uncertain and hopelessly disrupted. The need for a rapid and effective review and enforcement is predicated on the need for prompt complaint. Without prompt complaint and review, lists of contractors may be drawn up and the tendering process progressed or even completed, with alteration of position by other contractors, as well as the utility company.
- Bringing proceedings promptly can require their initiation within the express time limit of 3 months. Not only was this held to be the case by Langley J in Severn Trent PLC v Welsh Water  CLC 107 at page 112, but this point is illustrated in the decision of the Supreme Court of Ireland in Dekra v Minister for the Environment and Local Government  EuLR 583 in the judgment of Denham J at pages 594 and 598 where, in the context of the Irish procedural rules, the words "at the earliest opportunity" were effectively equated with the word "promptly". It was recognised that there was a degree of urgency required in applications of this type, the words being informed by "the requirement under European law that the application be made rapidly".
- In these circumstances, even if the three-month time limit did not apply, the requirement for promptness presents a barrier to Holleran. The evidence showed, and I so find, that Mr. Webber was aware of the exclusion of Holleran from the infrastructure list of potential contractors on 11th August at the latest and that Mr. Holleran was also aware by 27th August at the latest. Since the fax of 11th August from another potential contractor enclosed not only the 7th August e-mail but the relevant website entries, Holleran was aware from that point onwards of all the matters upon which its complaints were based, save for the refusal of an extension which followed. When matters came to Mr. Webbers' attention on the 11th August, it was incumbent upon him to act at once if a complaint was to be made in relation to the alleged insufficiency of the OJEU Notice of 20th May. It is extremely odd, that if there was considered to be a ground of complaint on this basis, he did not at once raise the matter with Mr. Holleran, and that Holleran did not out once take legal advice and institute proceedings in relation to it. Equally, with regard to the alleged breaches on the 9th June and 25th July, it is hard to see why steps were not taken at once. Even if the points relating to the insufficiency of the original Notice constitute a complaint based upon later consideration of the position, as appears to be the case if regard is had to the two letters of the 7th and 10th November, the argument about discriminatory treatment both in the context of main contractors and in the context of consortia, was something which Mr. Holleran appears to have apprehended at once and about which he felt a strong sense of grievance. Immediately following the reply of the 28th August, proceedings could have been taken which would have been within the three month limit following the 9th June and 25th July. Yet no steps were taken until after that 3 month limit. The prompt initiation of proceedings in respect of those two areas of complaint would, in my judgment, have involved issuing the claim form, following the giving of the necessary information under Regulation 32(4)(a), within a few days of the 28th August.
- The letter of the 27th August expressly referred to breach of the European procurement regulations and to the obtaining of legal advice in relation thereto if the extension sought was not granted. Notwithstanding that, on Mr. Holleran's evidence he did not take legal advice until the 7th November which led to the immediate letter of that date, the letter of the 10th November and the service of proceedings on the 11th November. In his evidence, he maintained that he was busy, as was Mr. Webber with other business including heavy pre-qualification questionnaires for other projects and engagement in other large contracts. They had a heavy workload at the time and did not therefore pursue the STW complaint. It is also noteworthy that, as set out earlier in this judgment, although Mr. Holleran's evidence was that he lived in the hope of being included in the infrastructure list, there had been no encouragement to him in that respect and STW's chasers in respect of the sewerage work met with procrastinating responses.
- I cannot therefore conclude that the proceedings were brought promptly, even if the cause of action based upon the refusal of the extension is taken into account. That again should have resulted in proceedings being instituted within a few days of 28th August. In these circumstances Holleran fall foul of Regulation 32(4)(b) unless an extension is granted.
- Under the terms of this regulation Holleran was required to inform STW of the breach or apprehended breach of the duty owed and of its intention to bring proceedings under Regulation 32 in respect of it, before commencing proceedings. No time limit is expressed in relation to the giving of such information, save that it must precede the initiation of proceedings. Equally, the regulation does not require that such information be given in writing. Since however regulation 32(4)(b) requires that proceedings be brought promptly, it follows that the information to be given under regulation 32(4)(a) must equally be given promptly or "pre-promptly", as it is sometimes said.
- Plainly the purpose underlying these Regulations is that a complainant should notify the utility company before instituting proceedings so that there is a possibility of remedying the situation without the need for proceedings. Promptness in initiating proceedings will be contextual and will depend upon the giving of information and the response received to it. Thus the giving of information is the first step and, depending upon the response, proceedings may then be required to follow within a greater or lesser period of time.
- As Langley J held in Keymed, if the claimant is out of time in bringing the proceedings, it does not much matter whether there is compliance with the information provision which should precede it. There is no doubt that there was here compliance with the regulation inasmuch as information preceded the initiation of proceedings in the letters of the 7th and 10th November where there was express reference to the intention to bring proceedings under regulation 32 and to the breaches of the Regulations which were alleged. It is plain from the decision of the Court of Appeal in Luck v London Borough of Tower Hamlets  EuLR 143 that the information given must expressly indentify regulation 32 and the breach or apprehended breach, as the regulation itself says (see Rix LJ at paragraphs 30 32). At paragraph 42 Rix LJ stated that the reason for paragraph (a) is "obviously two-fold: first to put the contracting authority on notice of the complaint even before any proceedings are commenced at a time when it may still be possible not only to avoid litigation but actually to remedy the default". For that reason a merely generalised complaint will not suffice. Further however, he went on to say that the absence of any separate time regime within the paragraph did not show that the requirements were an empty formality and that, since paragraph (b) required the prompt commencement of proceedings, the information must be given, as it were, "pre-promptly".
- An attempt was made to justify Holleran's position by reference to the decision in R v Portsmouth City Council  EuLR 665 and the comment by Keene J (as he then was) that the information did not have to be given in a single letter. Any attempt however to suggest that the exchanges of the 11th/12th August and 27th/28th August in some way satisfied the requirements of regulation 32(4)(a) is doomed to fail. There simply was no reference to regulation 32 nor to any suggested breach of any kind. Neither the letters of the 7th and 10th November nor the proceedings were prompt within the meaning of Regulation 32 and the letters did not satisfy the requirement of "pre-promptness" either.
Extension of time
- The question of an extension of time is tied up with the issue of promptness. The question is whether or not there is good reason for extending the period within which proceedings may be brought whether by reference to the requirement of promptness or the 3 month limit. The authorities show that it is not possible to define or circumscribe the scope of the words "good reason" and that it will always depend on all the circumstances of the particular case and is a matter for the Judge's discretion. The type of factors which have to be borne in mind in an exercise of this kind is however well known, namely the length of and reasons for any delay; the extent to which the claimant is to blame for any delay; the extent to which the defendant may have induced or contributed to the delay; and whether the defendant has been or will be prejudiced by the delay or the grant of an extension.
- The length of the delay, beyond the 3 months limit, is different in relation to each alleged breach. In the case of the breach relating to the OJEU Notice, it is of the order of a further three months. In the case of the different discriminatory breaches it is two/three months and three weeks respectively. If a lesser period than three months is appropriate, then a greater extension would be required in respect of each of these breaches and if the refusal to extend time was also a breach, an extension in order to meet the promptness requirement would also be required in respect of that. The real problem facing Holleran in seeking an extension is not however the length of any delay but the reasons for it.
- In truth there is no good reason for any delay from 12th August onwards, let alone from 28th August onwards. Mr. Webber's evidence was that he did not consider the OJEU Notice adequate as a call for competition. He said he had read it on 23rd May 2003 but failed to recognise that it was a call for competition. When, on 7th and 11th August, he became aware that the competition was in progress, and that the deadline had passed for a joint venture notification, there was no reason for inactivity in failing to report to Mr. Holleran or in failing to take proceedings. Equally, at that point he was aware of the STW website material which forms the basis of the other allegations of discrimination on 9th June, 19th June and 25th July. Yet he failed to report these to Mr. Holleran and even when Mr. Holleran became aware of them, on his evidence on 27th August, no steps were taken to institute proceedings. There simply is no good reason put forward to justify the delay, notwithstanding the attempt to say that Holleran remained hopeful of getting AMP4 business and was very busy in relation to other projects. The decision in Jobsin at paragraph 33 and 38 shows that ignorance of the law or commercial reasons for not taking steps in litigation in the hope of obtaining the business anyway are unlikely ever to constitute "good reason" and the Irish Court's decision in Dekra (see Fennelly J at page 610) emphasises the need for a strict approach to time limit issues in procurement cases. There is no basis for blaming STW for inducing or contributing to any delay in the commencement of proceedings and Holleran must take full responsibility for the delays in question from the moment of appreciation of grounds of complaint.
- As to prejudice to STW, the Court of Appeal decisions in Jobsin (ibid) at paragraph 40 and Matra v Home Office  3 AER 562 (per Buxton LJ at page 1663) make it plain that it is not necessary to adduce particular evidence of prejudice to third parties. As Dyson LJ says, it is inherent in the process itself that delay may well cause prejudice to third parties as well as detriment to good administration. One of the major purposes of proceedings is to enable procurement procedures to be corrected and for the Court to review and enforce any remedy required. Although Holleran's claim is now limited to damages and the claim for any other relief has been abandoned, the effect of a damages claim on a complex contracts process and its unsettling disruption of it is prejudice enough.
- Counsel for Holleran drew attention to the extended period of time involved in the whole procurement process and STW's failure to adhere to its anticipated timetable. The intention had been to start the procurement process early in order to avoid an effectively fallow year at the beginning of each capital expenditure programme because of the absence of appropriate pre-planning to effect works during that year. The smoothing out of maintenance and the consistency of work throughout the five-year period was a valid objective which required an earlier start to the procurement process. This explained the selection of main contractors on the pre-qualification procedure by August 6th 2003 for work beginning in January 2005. Whilst Holleran could rightly point to slippage in the various stages of the process, it is plain that any further disruption to the process caused by Holleran's own application for an extension of time and any consequent knock-on effect on potential applications from others is inherently undesirable. There was evidence before me as to the difficulty in re-running the selection process at a later date, even if there was no de-selection of existing candidates. To re-run the selection process, having already announced the successful candidates, would undoubtedly create an issue of credibility so far as the whole process was concerned and this in itself militates against any suggestion of an extension, regardless of any slippages which did take place in the procurement process.
- Taking into account all these factors and weighing up all the circumstances, it cannot be said, in my judgment, that this is an appropriate case for an extension of time.
- I therefore answer the preliminary issue by declaring that Holleran's claim is barred by the operation of regulation 32(4) of the Utilities Contracts Regulations 1996 and in so doing refuse an extension of time for the commencement of proceedings under the Regulation.