The Supreme Court yesterday (9th February 2011) delivered a landmark judgement in the first procurement case to reach the court, overturning previous decisions of the High Court and the Court of Appeal.
The economic downturn and the massive cuts in funding for local authorities which are now beginning to flow through will increasingly require councils to look for new and innovative ways to deliver services. In February 2007, the London Borough of Brent invited tenders in accordance with the Public Contracts Regulations 2006, (the Procurement Regulations), for the provision of insurance. The company Risk Management Partners (RMP) submitted a tender, but was informed on 7 March 2007 that Brent had decided to award the contract to London Authorities Mutual Limited (LAML) which had not taken part in the competition. LAML was formed by a group of local authorities to provide insurance to the member authorities. Brent became a member of, and helped to fund, LAML, a guaranteed indemnity mutual insurance company. There was an expected saving of 15 to 20 per cent in comparison with external insurance.