When Transport for London recently cancelled a pitch and awarded the work to the earlier winner of a different TfL account, disappointed agencies threatened legal action. But do they have grounds?
Who: Transport for London and various ad agencies
When: October 2001
Transport for London (“TfL”) invited pitches for two accounts, to be held sequentially. The first was the corporate account, while the pitch for the congestion charges and transport services account was to be held a short while later. M&C Saatchi won the first account, and then, before the second round of pitches had started (but after all the agencies involved are likely to have done a significant amount of preparatory work), TfL announced that in order to reduce advertising costs it was cancelling the pitch and awarding the account to M&C.
Some of the agencies involved in the abortive second pitch have said they are instructing lawyers.
Why this matters:
Assuming EU procurement procedures have been followed, the disappointed agencies will not have any recourse on this account. Separately, there may be a claim under any written contract TfL required the agencies to sign before they became part of the pitch process. This often happens if, for example, the client wants rights in the pitch presentations regardless of who wins. Even if no express provision of this confers rights on the agencies in the event of the pitch not proceeding, it may be possible to argue breach of an implied term requiring TfL to go through with the pitch process in any event. However, even assuming the success of such an argument, what value is a judge going to attribute to the loss of a chance to pitch? Separately there may be a quantum merit claim on the basis of agencies having altered their position to their disadvantage in reliance on TfL’s conduct, though this may be on the outer reaches of arguability. Altogether not a satisfactory situation from either point of view and one suspects the disappointed agencies will rattle their sabres and then decide that discretion is the better part of valour.
Isn’t this the sort of situation the joint ISBA/IPA Pitch Code of many years ago was designed to avoid?