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Masthead Local Govt - Procurement and Contracts

Simple breach of procurement law “sufficient to trigger liability”: EFTA Court

The gravity of a breach of the EEA (European Economic Area) rules on public contracts is irrelevant for the award of damages, the EFTA (European Free Trade Association) Court has ruled.

The case of Fosen-Linjen AS v AtB AS Case E-16/16 was brought by a Norwegian ferry route operator.

The court held that a rule requiring a breach of a certain type or gravity would ultimately substantially undermine the goal of effective and rapid judicial protection sought by the Remedies Directive and interfere with the objectives pursued by Directive 2004/18/EC.

It added that a simple breach of public procurement law was in itself sufficient to trigger the liability of the contracting authority to compensate the person harmed for the damage incurred, pursuant to Article 2(1)(c) of the Remedies Directive, provided that the other conditions for the award of damages were met including, in particular, the existence of a causal link.

Commenting on the EFTA Court’s judgment, Philip Moser QC of Monckton Chambers said: “This ruling puts the EFTA Court at variance with our own Supreme Court and its finding that a ‘sufficiently serious breach’ is required to trigger the liability of a contracting authority in such circumstances in EnergySolutions v NDA.

“The EFTA Court judgment is of particular interest while an EEA-type solution, including the EFTA Court’s jurisdiction, remains on the table as a possible transitional or even permanent outcome in Brexit negotiations.”

The judgment can be found here.

 

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