knowledge 17 April 2020 |

COVID-19:  Recent Judgment Gives an Insight as to how Urgent Procurement Litigation will be Managed

While the courts are regularly implementing new measures and issuing guidance as to how court business will proceed in light of the current curtailments, the position is constantly evolving and much will depend on government guidance and public health considerations.

A procurement challenge had been brought by Gleneagle Hotel (Killarney) Limited (Gleneagle Hotel) in January 2020 against a decision of Cork County Council (the Council) to award a contract to provide partial funding to enable the construction of an event centre in Cork to BAM Contractors Limited. The proceedings were entered into the commercial list on 17 February 2020 and an application was brought by the Council to lift the automatic suspension. A timetable was put in place for the exchange of affidavits by the parties and a hearing in relation to the automatic suspension was scheduled for 7 and 8 May 2020.

On 31 March 2020 Gleneagle Hotel entered into correspondence with the Council to advise it that since the timetable was put in place and as a result of the outbreak of Covid -19, its position had dramatically changed. Its business had to close and over 500 employees had been temporarily laid off. It was in discussions with the HSE for the use of its hotel as a care facility during the pandemic. As a result it had to focus of the immediate and urgent needs of its business and employees and was not in a position to devote time to the proceedings. Gleneagle Hotel alleged that the crisis required its full attention and it was not in a position to provide necessary instructions for the preparation of replying affidavits. As such, it was seeking an adjournment of the application to lift the automatic suspension by one month to June 2020.

The Council opposed the request for an adjournment, and instead said it would agree to a reasonable alteration of the timetable for affidavits. The Council stressed the urgency of the proceedings, asserting that the delay in the proceedings could result in the failure of the entire project due to the cost implications, and noting that failure of the project could have very serious financial consequences for Cork and for employment prospects in the area. The council suggested that the application could be heard remotely and referred to the public statement issued by the Chief Justice and the Presidents of the Court Jurisdictions on 31 March 2020.

Interestingly, the application for an adjournment was dealt with by the Court by reference to the papers, without a hearing. This was on agreement between the parties and with the court.

In its judgement the court accepted that the applicant had experienced major difficulties in complying with the timetable as a result of the Covid-19 crisis, and that its efforts had very likely been concentrated entirely on trying to deal with the fall out. However the court also accepted the Council’s position that there was “considerable urgency” to the proceedings in general, and to the determination of the application to lift the automatic suspension.

The court noted that while this application to lift an automatic suspension may well be the sort of case that would be suitable for remote hearing, it was not yet possible to say whether it could be accommodated in practice. The courts are putting in place infrastructure to enable remote hearings next term (commencing 20 April 2020), but it is not yet clear how they will work and when they will be available.

Notwithstanding the uncertainty, the court concluded that the urgency of the Council’s application to lift the suspension was such that the application should be brought to a point where it was in a position to be heard (assuming that a remote hearing will be possible).  Therefore, the hearing for the application to lift the suspension remains scheduled for 7 and 8 May 2020.

The court did, however, grant additional time to Gleneagle Hotel for the preparation of its papers. The court was of the view that adjusting the timetable, in the manner proposed by the Council was a fair, reasonable and proportionate response to the difficulties faced by Gleneagle Hotel and the urgency demonstrated by the Council. The court advised that if and when the position regarding remote hearings was made clearer, it would give the parties liberty to apply as to whether the application could be heard remotely.

The judgment demonstrates that the court remains cognisant of the urgency that can arise in procurement challenges, and that it will seek to accommodate urgent interim applications, such as applications to lift the suspension, where it is in a position to do so. It indicates that the courts will remain vigilant of slippages and delay in commercial court proceedings, and will continue to actively manage cases.

While it is clear that there is still significant uncertainty as to how hearings will be heard in the new term, it appears that the courts will facilitate parties where possible, and where it is appropriate, by permitting applications on paper and via remote hearings.