Company drops legal action after ICB files defence

Bristol, North Somerset and South Gloucestershire ICB had been accused of breaking procurement rules by awarding a patient transport contract to a firm which went bust less than a month after it began providing the service.

But the ICB said in its defence that it had acted lawfully when it commissioned the service last year, and again when it urgently re-commissioned the service in October.

The ICB had initially awarded the five-year, £36.7m contract to SVL Healthcare in July 2023. SVL finally began delivering the service on 1 August this year, but it suddenly went into administration just 26 days later.

The contract was then re-awarded to University Hospitals Bristol and Weston Foundation Trust in October – to provide an interim service over 18 months for just under £8m.

ERS Transition, another patient transport supplier which brought the now discontinued action, told the court in October that the ICB had acted unlawfully in awarding the contract in 2023 as it had “failed to adequately assess the financial sustainability” of SVL.

ERS also claimed the ICB acted unlawfully in awarding the new contract to UH Bristol and Weston, alleging “bias” against the firm and a “desire to avoid contracting with the claimant”. It claimed that it should have been awarded the contract as the second-place bidder behind SVL.

BNSSG responded that it had carried out the necessary financial tests of SVL twice and the company had passed both times when it went through the first contract award process.

It added that ERS was aware that SVL had passed the financial tests in July 2023 and “cannot now allege that this process was inadequate or that further investigations or inquiries were required”.

On the award to UH Bristol and Weston, the ICB denied that it “owed [ERS] any duties in respect of the award of this replacement contract and/or that [ERS] has an entitlement to any remedies in relation to this matter under the [Provider Selection Regime].”

ERS dropped the claim on 21 November. It is not clear precisely why – the ICB referred this question to ERS, which has yet to respond to requests to comment from HSJ.

This was the second legal claim brought by ERS against the ICB for the SVL Healthcare procurement.

The first legal claim after the initial 2023 contract award, which led to the year-long delay in SVL delivering the service, is ongoing and is unaffected by the decision to withdraw the second challenge, HSJ understands.

Fears of a precedent

This legal claim had raised some concerns at NHS England that it could set a problematic precedent.

It elided two sets of procurement rules – the Public Contracts Regulations 2015 and the 2023 provider selection regime. The original 2023 contract with SVL was under the PCR but as of January 2024 health and care services are commissioned under the PSR.

The second contract, with UHBW, therefore was made under the PSR using its “urgent” contracting provision that enables commissioners to make a direct contract award to a supplier to maintain continuity of an essential service and when the urgency was unforeseeable.

There was a concern this award could mean commissioning decisions under the PSR were suddenly open to challenge in the High Court as part of a civil dispute.

Part of the purpose of the PSR was to provide would-be providers and commissioners other ways to settle disputes over commissioning decisions away from costly, time consuming and disruptive legal challenges in court.

It has created a route whereby a dissatisfied would-be provider can initially seek an internal review of a commissioning decision before moving to an independent panel set up to oversee the new commissioning rules. If still not satisfied, a claimant can still ultimately go to court with a judicial review.