A leading procurement lawyer believes a landmark judgment is good news for suppliers.
Commercial Litigation Partner at Knights, Fleur Turrington, believes suppliers could now feel more encouraged to bring claims following the result of the first substantive judgment under the Procurement Act 2023 - Parkingeye Ltd v Velindre University NHS Trust and Cardiff and Vale University Health Board.
The judgment, which was handed down earlier this month, was the result of an initial challenge by ParkingEye over the lawfulness of the procurement for the management of hospital car parking services – a tender they had been unsuccessful in.
ParkingEye, the claimants and incumbent supplier, argued the procurement was not conducted lawfully and as the challenge had been issued within the standstill period, an automatic suspension had applied. This ensured the Trust and Health Board were unable to enter into a contract with the successful bidder until the challenge had been resolved or the suspension lifted.
The defendants in this case, applied to the court to lift the automatic suspension.
Concluding, the court rejected the application to lift the suspension - in determining the decision, it had regard to the new test introduced as part of the Procurement Act 2023.
Fleur, who sits within the Knight’s Dispute Resolution team, says this is big news in the procurement world:
“This is the first substantive judgment under the Procurement Act 2023 and the key message is that this is very positive for suppliers – albeit not necessarily for contracting authorities.
“First and foremost, it is a judgment that places less emphasis on damages – something that applications brought under the Public Contract Regulations 2015, applying the American Cyanamid test would have prioritised.
“The new law ensures that the public interest argument is given more credence and it highlights a potential shift by the courts to keep suspensions in place pending trial.
“Throughout this process, the courts applied the new test under s102 of the Act – considering public interest.
“They rejected the application to lift the automatic suspension on the basis there was no evidence as to the disruption to services, with higher value placed on the public interest argument and ensuring the contract award had been lawful. Damages were considered but were not considered a key factor.
“If the tone of this judgment is something that is replicated going forward, it is completely possible that we’ll see a greater number of claims being issued in the Courts.
“In my view it's going to not only encourage suppliers to feel more comfortable and more confident in doing that, but the implication is that it is now more likely that claims will proceed through to trial.
“I believe the courts will be able to manage the increase in cases being brought to them. However, I think Judges are going to more robust in terms of the timetabling of trials as a result.
“One thing that I would stress is that this is only one judgment and it is appropriate to be cautious and follow closely how things develop going forward. However, as part of this case, HHJ Keyser KC did say that, depending on the facts, the public interest will generally tend to lean in favour of keeping the suspension in place.
“It’s certainly a good sign and an important insight and indication into how future judgments could be made but it is still very early days. It will take some time before we start to see any sort of pattern – if at all.”