In this post, Christopher Vajda, former Judge at the Court of Justice of the European Union (2012 – 2020), discusses the continuing relevance of CJEU case law in the public procurement area post-Brexit, and the difficulty in “unpacking” such cases.
In my new capacity as a former judge at the CJEU I thought it might be useful to “unpack” CJEU procurement judgments which I know have, on occasion, caused difficulty in application by national courts. I will then outline the future relevance of the CJEU case law within the UK post-Brexit.
The unpacking issue: CJEU judgments
I start with what I call the “unpacking issue”. The CJEU has been deciding around on average 20 procurement cases a year over the last five years. I would like to think that in the majority of those cases both the reasoning and result is clear and hence those cases can be applied without difficulty in the national courts. However, there are a minority of judgments, probably a very small minority, which may give rise to difficulties. These difficulties can be put into the following two categories:
(1)The scope of the judgment is not clear: does it cover just the facts of the case or is of broader application?
(2) The judgment does not decide the case but leaves it to the national court.
Obviously there is a degree of overlap between the two.
The first point to make is that in a reference the CJEU is not master of the facts. The CJEU can only go on the basis of the facts as stated in the Order for Reference and regrettably even today these are not always of uniform quality. In some references it is not clear how the national provisions are intended to interact with the provisions of EU law (indeed there may be an unresolved as to which national provisions are relevant) and the basic facts themselves may also be in dispute. As the jurisdiction of the CJEU on a reference extends neither to national law nor to the facts, this places the CJEU in difficulty.
There are three ways of addressing this. First, one can attempt to remedy the problem by seeking clarification from the national court but this will add to the length of the reference procedure. Secondly, one can take a more brutal approach and declare the reference inadmissible because it fails to respect the rules laid down in Art. 94 RP which require the relevant national provisions and facts to be set out in the Order for Reference. Thirdly, one can just attempt to do one’s best and hope to obtain some elucidation at the oral hearing. Not unsurprisingly the third option is in the one in practice that is used most often although, in the light of ever increasing volume of references, more use is being made of the second option. The third option entails that the judgment may have to be open textured and leave much not only to the national court that referred the question but also to other national courts to whom the case is cited.
Sometimes the reference itself cannot be criticized, but, in the light of the legal principle laid down by the CJEU, the actual answer requires further fact finding which is outside the scope of jurisdiction of the CJEU. An example of this was the Grand Chamber’s judgment in Case C-396/14 MT Hojgaard and Züblin (24.5.16) where the CJEU had to decide whether it was consistent with the principle of equal treatment for a tender submitted by a joint venture between two parties in a negotiated procedure to be replaced by a new tender by one of the parties (PA) to the joint venture when the other one became insolvent. It was PA’s tender that was ultimately successful. The Contracting Authority was keen to ensure at least four candidates should remain in order to ensure adequate competition. This was in reality a case not about the interpretation of the principle of equal treatment but its application in a very fact specific context. The CJEU said PA’s participation was consistent with the principle of equal treatment provided that, first, it could have met the preselection criteria on its own, and second that other tenderers were not placed at a competitive disadvantage. The first condition gave rise to no problem. By contrast, it was not possible for the CJEU to decide whether the second condition was met as there was a number of fact sensitive questions arising out of the second condition that had to be left to the national court.
As stated above, this case was more about application than interpretation of the principle of equal treatment. Indeed, it is difficult to criticise the Danish court for having made a reference as the case raised a new point of EU law point. Indeed one might observe that the leading CJEU authority on when there is an obligation on a Supreme Court to make a reference, namely Case 283/81 CILFIT (6.10.82) refers to the situation when the correct application leaves no reasonable doubt whereas it would probably have been more accurate to say the correct interpretation leaves no reasonable doubt. Recent experience has shown that more and more cases that are referred to the CJEU are about the application of EU law, including procurement law, to specific facts. The combination of persuasive advocates and cautious judges often leads to further references to the CJEU in cases where the factual matrix is slightly different from the previous case decided by the CJEU. This tendency is reinforced by the not infrequent inclusion of the phrase “in circumstances such as the present” in the operative part of the judgment. The use of such language can reflect three things. First, it is designed to provide maximum assistance to the referring court in deciding the actual case before it. Second, it reflects a technique well known to the common law of deciding one case at a time and not by overbroad statements prejudicing the outcome of future cases. Third, it may reflect a compromise amongst the judges in agreeing the judgment.
Faced with the increasing number of preliminary references coming into the CJEU (an increase of around 60% between 2016 and 2019), which inevitably will have an effect on the duration of a reference, the CJEU has recently been moving, where possible, to a more abstract and less fact specific form of operative part of the judgment (dispositif), which will avoid use of the phrase “in circumstances such as the present”. In other words more interpretation and less application. This is partly reflected in paragraph 11 of the latest recommendations by the CJEU to national courts which states that it is not the role of the CJEU to apply the law to the dispute in hand.
Of course, such an approach is not without its own risks. While it avoids the Scylla of too fact intensive an answer, it risks the Charybdis of too abstract or broad an answer which may require adjustment in later cases. Also, if one looks at the general principles (e.g. equal treatment, proportionality etc.) which form such an important part of procurement law, this approach could mean that the CJEU would in effect add very little value to what the national court already knows. Hence this new approach is far from a “magic bullet” and it remains to be seen whether the CJEU will be able to avoid applying EU law to the facts before it, particularly in cases involving general principles. In any event, the key point is that there are jurisdictional and practical reasons why the CJEU does not decide the outcome of every procurement reference that comes before it and that this trend is likely to be reinforced in the future.
The future relevance of the CJEU case law within the UK post-Brexit
While none of us can predict just how public procurement laws within the UK will evolve in future, I would venture to suggest that it will still be necessary for UK lawyers and courts to pay close attention to judgments of the CJEU. Currently, under the so-called implementation period running until the end of this year UK courts are in any event bound to follow CJEU case law and the rules on references have not changed. In fact, UK courts have always been reluctant to make public procurement references. This is for the very understandable reason that the contracting authority and the tenderers wish to have a swift judicial answer to a public procurement dispute. So I doubt very much that there will be a flurry of references, at least in the procurement field. But UK courts will still have to follow and indeed apply the Luxembourg case law.
The more open question is what sort of public procurement regime the UK (and its constituent regions) will adopt once the implementation period has ended. However, it seems to me that whatever regime is adopted – and the UK has indicated that it will in any event sign up to the GPA – there will be a great deal in common with the EU regime. At the heart of any effective public procurement regime lie the principles of equal treatment and transparency. Those principles are enshrined in EU law not just as EU general principles, but also specifically in Article 18 of Directive 2014/24.
We have seen in recent years a number of what I might call policy wish “add ons” such as environment, social, and labour law obligations as legislators have sought to lever the huge commercial opportunities offered by public procurement to advance other policy objectives. Those add-ons already feature in EU legislation and have been the subject of CJEU decisions. While the policy objectives are laudable, it is fair to say that such obligations have rendered procurement law more complex, as can be seen by the increasing size of EU legislation. If we are not careful, procurement law could become as complex as tax law. Indeed, one case, Case C-395/18 Tim, raised the question of whether it was permissible to impose an automatic exclusion on a tenderer when, unknown to him, one of his nominated sub-contractors did not have an up to date certificate in respect of the right to work for people with disabilities. Regrettably the relevant EU provisions in Directive 2014/24 did not provide an answer to this question and hence the CJEU had to have regard to general principles including social and labour law obligations to answer that question. Thus the CJEU found that EU law permitted such an exclusion in national law but that such a ground of exclusion had to comply with the principle of proportionality.
A dispute of this kind would not have fallen within the scope of public procurement law in former times as there was no suggestion that promoting the rights of disabled persons should fall within the ambit of public procurement. Similar issues will face legislators within the UK. Even if the rules within the UK do not replicate the EU ones, it is highly likely that they will traverse similar ground which will mean that there is likely to be a body of CJEU case law which will provide, at the very least, important guidance as to how to interpret similar terms or policy objectives in UK legislation.