Whittington Health slams Ryhurst’s £14m damages bid as High Court trial begins
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Contractor Ryhurst’s fight for £14m in damages after Whittington Hospital bosses ditched plans to hire it for an estates contract “flies in the face of normal commercial practice and common sense”, the High Court heard on Tuesday.
Ryhurst - a subsidiary of the company Rydon which was involved in the refurbishment of the Grenfell Tower before the tragic fire in June 2017 - has claimed the hospital broke procurement law when it backed out of plans to hire it for a 10-year regeneration project.
But the Whittington Health NHS Trust - which runs the hospital - told judge Stephen Davies it was "well within its rights" to change its mind and that the "right to enter or not to enter into contracts" was part of the rights inherent in being a public authority.
Ryhurst's counsel drew a direct link between "political noise" from MPs including Jeremy Corbyn and activist group the Defend the Whittington Hospital Coalition (DWHC) and the trust's decision to ditch the deal. Hospital bosses deny this was the case. Instead they cite the deteriorating opinion of "stakeholders" as one of a number of reasons for dropping the plan for a strategic estates partnership (SEP).
The trust paused the process in the week following the Grenfell Tower fire when it became clear Rydon Maintenance - a sister company of Ryhurst - had worked at the tower. It then asked both bidders "further questions" before, Ryhurst was told it would be awarded the contract. Nothing was ever signed, and Whittington Health annouced it would not move forward with the deal in June 2018.
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The Trust's barrister, Jason Coppel QC, told the court: "The claimant's case is essentially that the trust was not allowed to change its mind. It is saying the trust was required to sign up to a ten-year plan which the board decided in 2018 would not deliver the benefits it had been suggested and was not in its interests at the time.
"We say that flies in the face of normal commercial practice and common sense."
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He added the ongoing Grenfell Inquiry posed an "existential threat" to Ryhurst's business and even if had been the only reason for a decision it would have been a valid one.
Sarah Hannaford QC, for Ryhurst, responded, telling the court: "The claimant had won the procurement, had been announced as the preferred bidder, and a statutory standstill period had been held and expired without challenge. A letter was provided and the contract was submitted to the regulatory authority - in this case NHS Improvement. But then then trust abandoned [it]."
The court heard that Ryhurst believed the it was cancelled because of local feeling towards the company's Grenfell connections.
According to Ryhust, Whittington Health did not fully disclose its reasons for pulling out and the case is based on a belief that the trust breached domestic and EU regulations in its handling of the procurement, particularly in relation to "transparency, equal treatment, proportionality and rationality".
Ms Hannaford added: "We say that the main reason for the decision was political pressure because of in particular the connection between my client and Rydon Maintenance Limited's involvement at the Grenfell Tower."
Mr Coppel argued that allegations the trust had sought "to conceal its intentions" would amount to "very serious allegations of dishonesty and bad faith" which were not the case. He added: "In short, the claimant's case is that it was 'Grenfell, Grenfell, Grenfell'. There's simply no factual basis for the allegation that anyone at the Trust took any position on Rydon as a result of Grenfell Tower."
MPs including Jeremy Corbyn campaigned against the deal, while the DWHC cited the collapse of Carillion and opposition to privatisation alongside Grenfell as reasons to pull out of the deal.
The court heard that stakeholder concern was only one factor in the Trust's decision-making - along with improved relationships with public bodies and a better financial position. But Mr Coppel added without public support the SEP would have been "much more difficult".
He said: "It is simply unrealistic to suggest that the trust was required to ignore stakeholder concerns that would have made the SEP much more difficult - that's whether or not you think they are right about privatisation, whether they are right aboug Carillion, or whether they are right about Grenfell."
On Monday, the DWHC and activists held a protest outside the High Court slamming Ryhurst for taking the court action.
The trial continues.