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Contract dispute judgement results in £80,000 indemnity costs award against the MOD

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A recent judgement has seen a costs penalty of £80,000 imposed on the Ministry of Defence (MOD) following concerns over disclosure of information as part of a contract dispute case.

The case in question, Serco v Secretary of State for Defence, saw judge Mr Justice Fraser award indemnity costs against the MOD following conduct in disclosure of information that was ‘well outside the norm’ and that the required information should have been provided on a voluntary basis by the MOD months before.

The claim against the MOD was bought by Serco in June last year following the outsourcing giant’s concerns regarding how its £1.1bn bid for fire and rescue services was assessed. Serco had requested a variety of information from the MOD to provide insight as to why its bid for the 12 year contract had failed, including documentation giving reasons for its bid evaluation score. Serco made specific disclosure application which was compromised by the MOD’s delayed compliance with the requests.

Mr Justice Fraser referred the parties to extant case law that requires that a party challenging a decision must have prompt access to key documents and information concerning the bid evaluation process. He also reminded the parties of their duty to help the court to achieve the objective of the hearing. Commenting on the disclosure issues, the judge said:

It is obvious to me the MoD has not begun to grapple with its obligations in terms of disclosure, either generally or in the context of this application, until an extraordinarily late stage… A party such as Serco, which is bringing what on the face of it… is at least a prima facie credible challenge in a very sizeable, expensive procurement of enormous detail, was entitled, and is entitled, to seek these documents.”

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