Cases - Brent LBC v Risk Management Partners Ltd
Record details
- Name
- Brent LBC v Risk Management Partners Ltd
- Date
- [2009]; [2011]
- Citation
- EWCA Civ 490; UKSC 7
- Legislation
- Keywords
- Teckal exemption - mutual insurance company - damages for a breach of regulations for awarding contracts - control
- Summary
-
A group of local authorities decided to establish a mutual insurance company. The applicant company claimed that it was entitled to damages for breach of the regulations for awarding contracts of insurance to the mutual insurance company. The local authority took the view that the regulations did not apply because of the degree of control it and other members exercised over the insurance mutual.
On appeal, the Supreme Court considered that the regulations did not apply where the local authority exercised control similar to that which it exercised over its own departments that carried out the essential part of its activities with the authority, in accordance with the purpose of the underlying EU policy and directive. (Described as the ‘control’ and ‘function’ tests forming part of the Teckal exemption: see Case C-107/98 [1999] ECR I-8121). The facts of the case showed that the insurance mutual would be difficult to operate effectively without independence and freedom to manage its business.
The Teckal exemption appears to be confirmed by Commission v Germany Case 480/06 [2009] ECR I-47474 in that there is now a much clearer focus on the purpose of public procurement rules so as not to inhibit public authorities from cooperating with other public authorities. Public authorities are not required to follow any particular legal form in order to take advantage of the exemption so long as no private interests are involved and they are acting solely in the public interest in carrying out their public service tasks (see paragraph 52 of Lord Hope’s speech in the appeal judgement).