Introduction
The recent Court of Session Commercial Action case of Roche Diagnostics v Greater Glasgow Health Board (GGHB) and Abbott Laboratories (2024) CSOH55 concerned a public procurement under the Public Contracts (Scotland) Regulations 2015.
What is interesting about this decision is that it focused on an argument based on "unlawful means conspiracy" (an argument which is being deployed more regularly in commercial disputes in Scotland than ever before, but it is an area of law heavily influenced by English law).
Background
The contract in question was for laboratory managed services for seven years beginning in September 2023. Abbott was the incumbent and submitted a bid; the only other bidder was Roche.
In March 2023, the health board notified Roche it had been successful, and on the same date that the second defender had been unsuccessful.
In April 2023 Abbott's solicitors raised concerns in respect of the procurement process, and the health board reviewed its evaluation of both bids.
In May 2023, the health board confirmed the pursuer had been successful and selected as preferred bidder. Later that month Abbott raised proceedings in the Court of Session against the health board.
In late June 2023, the health board notified it intended to abandon the procurement.
It was agreed by the defenders in principle that the existing contract would be extended for almost four years.
In July 2023 Roche raised a court action, arguing that the abandonment of the procurement was unlawful, and that the decision to extend the existing contract with Abbott was also unlawful.
In addition, it argued that an unlawful means conspiracy was entered into by both defenders and sought damages from Abbott. Roche argued that prior to the abandonment decision, Abbott had informed the health board it wouldn't continue to provide services after the current contract ended in September 2023 to facilitate a mobilisation period for a new contractor, which was an anticipatory breach of contract (because of a particular clause in their contract which provided for extensions at the authority's request). This meant the health board considered it required to abandon the procurement and to extend Abbott's contract.
Lord Richardson heard arguments about the unlawful means conspiracy and causing loss by unlawful means at a debate.
Arguments
To recap on what are the essential elements of the delict of unlawful means conspiracy: (1) an agreement between the defenders, (2) an intention to injure the pursuer, (3) unlawful acts carried out pursuant to the combination or agreement as a means of injuring the pursuer and (4) loss to the pursuer suffered as a consequence of those acts.
The health board disputed that the pursuer had set out any subjective intention to cause harm to the pursuer. The first defender was a public body that aimed to ensure continuity of healthcare for patients. The common law should not become involved in devising rules for fair competition. The pursuer had other remedies under the procurement Regulations.
Abbott argued that the pursuer had not argued it was unlawful for it to agree to the extension. Abbott owed no duties under the 2015 Regulations, so the pursuer's argument that it breached those was irrelevant.
The pursuer argued that there had been no requirement for Abbott to agree to the extension of the existing contract: the first defender could have required the second defender to perform its contractual obligations. In relation to unlawful means conspiracy the pursuers argued it was not necessary to plead that the predominant intention of the defenders had been to harm the pursuer or acted maliciously. It was sufficient for a constructive intent from the fact that the defenders should have known that injury would ensue.
Decision
In his decision Lord Richardson rejected all the defenders' arguments. A relevant case of constructive intent was pled: both defenders should have known that injury to the pursuer would ensue from the allegedly unlawful extension of Abbott's contract, and loss was more than merely a foreseeable outcome of extending Abbott's contract. It was also the "obverse side of the coin" - the pursuer's loss in being deprived of the contract award is the other side of the coin to the defenders' gain in the second defender's contract being extended.
Any assessment of "blameworthiness" could only be conducted after proof (i.e., an evidential hearing).
Comment
This is an interesting and novel decision. It shows the real risks in contracting authorities making abandonment decisions and in respect of the importance of the sequence of events (ideally let the abandonment dust settle before agreeing a new extension).
The authority opened the door to the "unlawful means conspiracy" arguments when they could have used the existing contract lever, requiring Abbott to perform.
It will be interesting to see if there are further developments in court in this case.
