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Legal Updates

Procurement Challenge: Closing the loophole on differing time periods

19 August 2013 #Public Sector

There are currently two potential claims that could be brought against a procuring body for potential irregularities in procurement processes governed by the Public Contracts Regulations 2006 (as amended) (the Regulations).  

  • A claimant may bring a challenge under the Regulations within 30 days of the date upon which the claimant knew, or could reasonably have known, the circumstances giving rise to the claim in question (the Date of Knowledge).  This time limit applies where the Date of Knowledge was on or after 1 October 2011.
  • Alternatively, in some circumstances the claimant could instead ask the court to judicially review a decision made by a procuring body. Such claims must be commenced within 3 months from the Date of Knowledge.  

Challenges under the Regulations are only available if the process or decision is subject to the Regulations themselves (so for example would not be applicable for service concessions which are outside the scope of the Regulations or a decision to stop a procurement process).  The differing time periods have resulted in the anomalous position that a claimant has 2 potential courses of action, on one of which it has to move significantly faster than the other. 

With effect from 1 July 2013, the time period within which to judicially review a decision made in a procurement process was reduced from 3 months to 30 days from the Date of Knowledge.  These changes apply to situations where the grounds relating to the judicial review arise on or after 1 July 2013.  The change only relates to the judicial review of a decision governed by the Regulations and should bring more consistency to the process.  There will, however, remain the potential for two sets of time limits to apply and there is also likely to be an increase in claims relating to whether or not the Regulations apply.  For challenges relating to processes not covered by the Regulations, a claimant still has 3 months to bring a claim.

Claimants who wish to bring a challenge under the Regulations, or have a decision or process under the Regulations examined by way of judicial review, need to think carefully about the claims that they are raising from the start.  Historically, claimants have attempted to meet the 30 day time scale under the Regulations by issuing a short and limited claim form.  They would then further particularise the grounds for the claim at a later date.  This practice was challenged in the recent High Court decision of Corelogic Limited –v- Bristol City Council (2013).  The court in that case warned that new causes of action not set out in the original claim form may not be brought outside of the 30 day time limit.  Unless the claimant could show that the new causes of action arose out of the same, or substantially the same, facts (in accordance with CPR 17.4), they would not be allowed.

In addition, because of the reduction in time period, it is unlikely that any claimant will be in a position to follow the Judicial Review Pre-action Protocol.  It is therefore suggested that it will be disapplied in cases such as this.

Consistency of time periods will be welcomed by many procuring bodies. It will reduce the ability of people to delay a procurement process by leaving it to the last stages of the 3 month period before applying for judicial review of a decision.  However, instead claimants are likely to find new and innovative ways to circumvent the time periods in question, such as by raising an argument of implied contract, or bringing a tortious claim.  Both contractual and tortious claims have time limits of 6 years, though claimants relying on a contractual or tortious claim would be well advised to instigate their claims much sooner in any event. 

An implied contract argument was raised in the case of Sidey Limited –v- Clackmannanshire Council (2011) held in the Court of Session in Scotland.  The court did not find that the terms of the tender documentation resulted in an implied contract.  It also stated that the council did not owe the tenderer a duty of care.  An alternate challenge was used in the case of Montpellier Estates Ltd –v- Leeds City Council (2013) in which Montpellier Estates brought a claim for deceit (again a 6 year time period). Again, on the facts, the claim was unsuccessful.

It is likely that due to the further decrease in time periods for judicial review that claimants will find more innovative ways to bring challenges based on contractual or tortious claims so watch this space!

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

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