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Healthcare at Home Limited v The Common Services Agency [2014] UKSC 49

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Healthcare at Home Limited v The Common Services Agency [2014] UKSC 49

01 August 2014

Healthcare at Home Limited v The Common Services Agency [2014] UKSC 49

When a public authority invites tenders for the supply of goods and services it must do so by reference to criteria that are transparent and non-discriminatory.  But what does that actually mean?  By what standard should the clarity of award criteria be assessed?

The CJEU has ruled that invitations to tender should be formulated in such a way as to allow all “reasonable well-informed and normally diligent tenderers” (RWIND tenderers) to interpret them “in the same way” (SIAC Construction v County Council of Mayo [2001] ECR I-7725).  According to the pursuer, it hadn’t interpreted the criteria in the same way as the successful tenderer, and since no one had suggested that the pursuer was not a RWIND tenderer, it followed that the ITT had not been formulated in such a way as to allow all RWIND tenderers to interpret it in the same way.  All nine judges who have now heard this argument have had difficulty with it.

In the Inner House, the Lord Justice-Clerk had expressed himself in what appeared to be typically robust terms, but which, on closer analysis, allowed the appellant a certain amount of wriggle-room: actual tenderers’ views, he said, were “at best of marginal relevance”, “relatively” pointless, “essentially” irrelevant, or not “per se” sufficient to demonstrate that the criteria did not meet the required test (paras 56 and 60). 

In the Supreme Court, Lord Reed appeared keen to remove any lingering doubts: the RWIND tenderer, like the “reasonable man”, is just one of a long line of passengers on the Clapham omnibus, and, “It follows from the nature of the reasonable man, as a means of describing a standard applied by the court, that it would [sic] misconceived for a party to seek to lead evidence from actual passengers on the Clapham omnibus as to how they would have acted in a given situation or what they would have foreseen, in order to establish how the reasonable man would have acted or what he would have foreseen. Even if the party offered to prove that his witnesses were reasonable men, the evidence would be beside the point. The behaviour of the reasonable man is not established by the evidence of witnesses, but by the application of a legal standard by the court” (para 3).

The RWIND tenderer, as Lord Reed observed, is one of a number of passengers from the European Union to have boarded the Clapham omnibus.  There is also the “prudent and alert economic operator” (Joined Cases C-182/03 and C-217/03 Belgium and Forum 187 v Commission  [2006] ECR I- 5479), and the “average reasonably well-informed and reasonably observant and circumspect consumer” (Káler v OTP Jelzálogbank Zrt, Case-26/13, Gut Springenheide GmbH, Case C-210/96 [1998] ECR I-4657).

Interestingly, in the articulation of these tests, the CJEU has been markedly reluctant to rule out altogether the relevance of evidence from actual people, whether tenderers, economic operators or consumers.  In Gut Springenheide, for example, it said that, “in order to determine whether a statement or description designed to promote sales of eggs is liable to mislead the purchaser, in breach of Article 10(2)(e) of Regulation 1907/90, the national court must take into account the presumed expectations which it evokes in an average consumer who is reasonably well-informed and reasonably observant and circumspect. However, Community law does not preclude the possibility that, where the national court has particular difficulty in assessing the misleading nature of the statement or description in question, it may have recourse, under the conditions laid down by its own national law, to a consumer research poll or an expert's report as guidance for its judgment” (para 37).

So it is all left to the member states. There is a lively discussion in Europe regarding what consumers can reasonably expect, and it is increasingly acknowledged that the standards of, for example, the German consumer may be different from that of the Italian consumer.  Arguably, these differences can only coherently be explained by reference to the views of actual consumers within particular member states. For consumer, in the present context, read tenderer.  The CJEU has made it clear that evidence of such views from research polls and expert reports is not contrary to EU law.   Unfortunately, however, none of this case-law was cited by the appellant.  Nor is it discussed by the Supreme Court. 

Alistair Clark QC and Sean Smith QC of Axiom represented The Common Services Agency.