Firm claims conspiracy over awarding of Eircode contract

A navigational code software solutions firm has brought a High Court action over what it alleges was anticompetitive behaviour and illegal use of State aid in the awarding of the contract for the national postcode system nine years ago.

Loc8 Code Ltd says it suffered €12 million in losses as a result of an alleged conspiracy in the 2013 awarding of the postcode contract by the Department of Environment, Climate and Communications to Capita Business Support Services Ireland Ltd, trading as Eircode.

Loc8 Code Ltd says the Eircode system, which was launched in 2014, was known to be “substandard” for companies operating in competition with An Post, which is also being sued along with Capita and the Department of Environment. An Post grants access to its “GeoDirectory” database to Capita, as licence holder, for an annual fee.

Loc8′s claims are denied. Capita claims it has failed to identify which defendants allegedly conspired and also failed to provide any details of the alleged conspiracy. Capita further says that, given the contract was awarded in December 2013, Loc8 is statute-barred and/or not entitled to bring the claim due to delay.

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Capita applied to Mr Justice Denis McDonald on Monday to have the case admitted to the fast-track Commercial Court list but the judge said he saw it as a case for the High Court competition list rather than the commercial list.

He adjourned the application for two weeks to allow Capita’s counsel Michael Howard SC to seek permission from the judge overseeing competition cases to have it admitted to that list.

The judge said if the competition judge takes a different view, he would be willing to revisit the application to admit it to the Commercial Court. However, he said, the “real nub” of the case is about alleged unlawful State aid.

In an affidavit seeking entry of the case to the commercial list, Capita’s managing director Gillian Chamberlain says Capita has been paid nearly €33 million by the Department of Environment since December 2013 to operate the system. The overall cost of the project has been €38.5 million, Ms Chamberlain says.

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Loc8, as well as seeking damages for alleged conspiracy, seeks an injunction restraining Capita from operating outside its contractual mandate.

It also seeks an injunction against the department restraining it from using “State political and administrative resources to unlawfully promote the commercial activities” of Capita to the alleged detriment of Loc8.

It further seeks an injunction restraining the department from renewing the Eircode contract in December 2023 or pending determination of the proceedings, whichever is later.

Ms Chamberlain said the proceedings have serious commercial implications and are potentially detrimental to the functioning of Capita’s business.

Capita’s 10-year contract is due to expire next year, with an option to extend for five years.

The company’s interests would be jeopardised if the case is not given a speedy hearing through the commercial list, Ms Chamberlain said.