Judgment: 2017-07-31 · Court archive

High Court clears Beaumont Hospital to sign €57m blood laboratory contract

The court refused Beckman Coulter’s request to suspend the regulation allowing the procurement standstill to be lifted, then lifted the standstill so Beaumont Hospital could sign with Roche. The underlying challenge to the tender process remained unresolved.

High Court, Commercial · [2017] IEHC 537

Who, what, where, when and why

Who
  • Beckman Coulter Diagnostics
  • Beaumont Hospital (Respondent)
  • Roche Diagnostics
  • Professor Elaine Kay
What

The court refused Beckman Coulter’s request to suspend the regulation allowing the procurement standstill to be lifted, then lifted the standstill so Beaumont Hospital could sign with Roche. The underlying challenge to the tender process remained unresolved.

Where

Places mentioned in the report

  • Beaumont Hospital
When

Judgment:

Why

Reasons reported in the judgment

Justice Twomey refused Beckman’s request for a stay. He said the Supreme Court authority relied on by Beckman raised a fair issue to be tried, but did not provide the “overwhelming” evidence he considered necessary to suspend domestic law at an interim stage. He also found that Beckman’s potential commercial losses, including lost profits and tender costs, could be assessed in damages. The court gave significant weight to the regulation’s apparent validity pending a final ruling.

The High Court has allowed Beaumont Hospital to sign a contract with Roche Diagnostics for a blood science laboratory and related services, lifting the suspension that had prevented the hospital from concluding the deal. The contract was described in the judgment as worth approximately €57 million.

The order came at an urgent hearing on 28 July 2017. Beckman Coulter Diagnostics, the incumbent provider whose hospital contract expired on 30 June, had challenged the procurement process on 15 June. It alleged, among other things, that undisclosed award criteria made the process flawed. That substantive challenge was not decided in this hearing.

Beaumont Hospital applied to lift the statutory suspension on signing the Roche contract. Beckman separately sought a stay on the operation of Regulation 8A, arguing that the regulation was unconstitutional because the power to lift a suspension had been introduced by statutory instrument rather than an Act of the Oireachtas.

Justice Twomey refused Beckman’s request for a stay. He said the Supreme Court authority relied on by Beckman raised a fair issue to be tried, but did not provide the “overwhelming” evidence he considered necessary to suspend domestic law at an interim stage. He also found that Beckman’s potential commercial losses, including lost profits and tender costs, could be assessed in damages. The court gave significant weight to the regulation’s apparent validity pending a final ruling.

Considering the hospital’s application, the judge assumed there was a fair issue to be tried in Beckman’s procurement challenge, noting that the hospital had not disputed that point. He then weighed the remedies and the consequences of delay. Beckman’s evidence described the contract as exceptionally valuable to its business, but the judge considered the loss to be financial and potentially compensable.

In contrast, sworn evidence for the hospital said delay could affect patients because the new programme was intended to reduce blood-test turnaround times. Professor Elaine Kay, the hospital’s Laboratory Directorate director, described concern that implementation could be delayed for a significant period. The court accepted that potential adverse effects on patients could not be adequately remedied with damages and found that the balance of convenience favoured lifting the suspension.

The court therefore refused the stay and lifted the suspension to enable Beaumont Hospital to sign the contract with Roche. The judgment did not determine whether the tender process was valid or Beckman’s constitutional challenge; those issues remained for later proceedings.

Read the original court judgment

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