What is the cost of defending your reputation?

17 September 2009
As the court report in the latest issue of Supply Management shows, the consequences of not following public procurement rules are drastic. This case, where the court set aside a contract because of the breach of the rules, was unusual because it was the first time a UK court had scrapped a contract. Public sector buyers though should be wary, as this sort of decision by a judge is likely to become increasingly common with the implementation of the new EU remedies directive coming into force at the end of the year. As we saw with Bristol City Council recently, it might mean authorities would rather pay off suppliers, judging the cost of a settlement to be less than the price of a legal defence, even if they feel they are in the right. At a time of financial restraint, this seems to be a short-term cost saving, but does it not risk your organisation being seen as a bit of a "soft touch"? Which authority would a supplier be more likely to challenge - a council which has coughed up to avoid legal action in the past, or the one with the savage lawyers ready to defend them in a long drawn out court battle. I know which one I would rather tackle.
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