In most procurement cases, the challenger wants to obtain the contract, rather than sue for damages. However, damages are available as a remedy and may be the only effective remedy where the contract has already been concluded by the time proceedings are brought, or where the court lifts the suspension on the conclusion of the contract.
In the EU regime applicable in the Member States, the conditions for State liability for breach of EU law apply – the rule that is breached must be intended to confer rights; the breach must be sufficiently serious; and there must be a direct causal connection between the breach and the loss. Beyond that, it is for the Member State to determine the criteria for the award of damages, subject to complying with the principles of equivalence and effectiveness.
The same three conditions for State liability apply in the procurement regime applicable to the EU institutions. The General Court case law on damages in such cases also offers useful guidance which is potentially applicable at national level.
In the UK, the Procurement Act 2023 maintains the entitlement to damages which existed previously.
The cases covered below are from a number of jurisdictions, including the CJEU and General Court, England and Wales, Ireland, Northern Ireland, Scotland and Sweden, with cases from more jurisdictions being added. These cases, and the ensuing Analysis, cover various questions including:
- Are bid costs recoverable as damages?
- Can an entitlement to damages be made conditional on showing fault?
- Can the applicant claim damages for loss of profit on contracts other than the one the subject of the procurement?
- How does a court quantify loss of opportunity damages?
- Are damages available where the authority fails to state adequate reasons?
- What factors are relevant in determining if the breach is “sufficiently serious”?
- If proceedings are brought after the contract has been signed, does this affect the entitlement to damages?
- If the Applicant would have won had the breach not occurred, is the Applicant automatically entitled to damages?
- If it cannot be established that the applicant would have won but for the breach, can the applicant obtain damages on a loss of chance basis, and how can this be done?
- How is the entitlement to damages to be determined where a direct award was made and no competition was run?
- How is provision made for damages in cases of unlawful modifications?