High Court dismisses procurement challenge brought by group of sub-contractors over lack of standing

A High Court judge has dismissed an appeal brought by sub-contractors of Camelot over the lottery operator’s loss of a contract, cementing an earlier decision that found the sub-contractors did not have the standing to bring the procurement challenge.

The proceedings in International Game Technology PLC & Ors v Gambling Commission (No. 2 - Consequentials) [2023] EWHC 2226 concerned a procurement challenge arising from the competition for the fourth licence to run the National Lottery, which commenced in 2020.

Camelot, which was the incumbent provider, placed second, losing the contract to Allwyn. This prompted Camelot and its proposed sub-contractors and sub-sub-contractors (the IGT claimants) to challenge the Commission's decision.

Camelot eventually withdrew its challenge, but the IGT group – which consisted of 6 claimants – persisted. Their claim was considered by Mr Justice Coulson at the High Court in July 2023.

At the High Court, the defendants argued that because IGT did not bid for the fourth licence and were instead "at best sub-contractors to Camelot", they had no standing to bring the claim. Coulson J agreed, concluding that they had no standing and dismissed the claim.

The claimants then appealed the decision, bringing their appeal on five grounds. However, none of the five grounds were successful, leading the judge to consider whether there was "some other compelling reason" to grant permission to appeal.

"In my view, for three separate reasons, this submission cannot assist IGT," he noted.

"The first is that, as the notes in the White Book 2023 point out at 52.6.2, there is a philosophical difficulty in allowing permission to appeal in a case when it has already been concluded that that appeal has no real prospect of success.

"At the very least, such an application would require unusual circumstances for permission to appeal to be granted, despite its inherent lack of merit. Those unusual circumstances are not demonstrated here."

Secondly, he noted that he was not persuaded by a submission that "this is in some way a point of law of critical importance".

On this point, he stated: "I acknowledged at the outset of my primary judgment that the outcome may affect more cases than just this one but, as presently advised, I consider its significance to have been somewhat over-stated. I am certainly of the view that the issue is not so important that it should permit an untenable appeal to take up the time, costs and court resources that would be involved."

Finally, Coulson J tackled a suggestion in the claimant's argument that, until now, it had always been assumed that sub-contractors could bring procurement challenges. He stated that he disagreed and considered "that the evidence is all the other way".

"Public procurement has been a lively field of endeavour for lawyers for the last 15 years or so. During that time there have been hundreds, if not thousands, of procurement challenges brought by unsuccessful bidders.

"By contrast, the number of challenges in the UK that involved sub-contractors in any role can be counted on the fingers of one hand. In my view, that gross imbalance supports the proposition that, in general terms, it was assumed that sub-contractors did not have the standing to bring procurement challenges."

As a result, he found that he was not persuaded there was some other compelling reason to grant permission to appeal, where the appeal itself had no real prospect of success.

He, therefore, refused permission to appeal.

Coulson J went on to order the IGT claimants to pay an interim payment of £2.1 million in costs to the Commission, around half of the total costs incurred by the Commission.

The judge also ordered IGT to pay Allwyns's legal costs.

Adam Carey