City council ordered to pay £100k costs in early stages of procurement dispute about e-bike concession contract

The existence of a claim for breach of obligations under the Concession Contracts Regulations 2016 was revealed in a High Court judgment earlier this month.

In the judgment, the High Court allowed an employee of the unsuccessful bidder (Lime Technology) to be part of a Confidentiality Ring (CRO), finding that Lime had a “legitimate interest” in someone from within its organisation having access to pricing information, so as to assess whether a challenge based upon allegedly abnormal pricing in its competitor’s tender had “sufficient credibility” to justify pursuing a challenge before the Court.

In addition to the application for an Order establishing a CRO, there was originally an application for Specific Disclosure which was resolved without any necessity for the judge to reach a decision.

Lime Technology, which instructed City law firm Freshfields, sought its costs of both applications.

The council accepted that it should pay the costs of both the applications on the standard basis, but disputed the amounts claimed.

Considering the case, Roger ter Haar KC, sitting as a deputy High Court judge, said: “The amounts at stake are substantial. The costs sought in respect of the CRO total £77,468.25, net of VAT. The costs sought in respect of the Specific Disclosure application total £90,372.45.

“In each case the amount claimed for counsel’s involvement is a relatively small percentage of what is claimed: £12,110 on the CRO application and £15,035 on the Specific Disclosure application.

“The remaining balance of about £140,000 is substantially in respect of solicitors’ profit costs. On any view the amounts claimed are very high.”

The defendant council submitted that a figure of £40,000 in total would be “reasonable”, however the judge found this to be inadequate.

He concluded: “In my view, an appropriate sum for a payment on account is £100,000 in all.

“It is possible that it is necessary to apportion that figure between the applications: on a rough and ready basis I attribute £40,000 to the CRO application and £60,000 to the Specific Disclosure application.”

Lottie Winson