The case relates to an invitation to tender issued by LCC to operate and manage 23 household waste recycling centres within its area on a three-year contract with a two-year extension.
In November 2007 following an open-procedure process, LCC announced that the contract was to be awarded to SITA.
Environmental Waste Controls, one of the unsuccessful bidders, issued a claim in the High Court, Manchester, for damages under the Public Contracts Regulations 2006 in relation to a waste contract for the Lancashire area.
In a landmark ruling Judge Hegarty QC awarded Merseyside-based EWC damages.
Responding to the ruling, LCC executive director for the environment Jo Turton said: The council is very disappointed by the judgement in this case. In his conclusions Judge Hegarty found in almost all respects in favour of the council.
EWC claimed that its tender was more environmentally friendly and guaranteed a higher recycling rate than any other bidder involved in the process. It was also around £3.35m cheaper than that of SITA.
From the outset, all we have asked that each operator be treated equally, said EWC chairman Bill Edwards. Its been a two-year battle, but were delighted to have been vindicated.
However, LCC maintain that their decision was based on an evaluation of both the price and the quality of the service offered by the contractor.
Ms Turton said: The issue on which the council appears to have lost is that it took into account the financial standing of EWC and it should not have done so.
Based on this, it is difficult to understand the Judges decision and it is therefore highly likely that the council will appeal the decision.