A ticking time bomb for procurement claims

The recent High Court judgment in Riverside Truck Rental Ltd v Lancashire County Council [2020] EWHC 1018 (TCC) reminded us that the timescales for challenging an alleged breach of the procurement regulations are strict.

When it comes to procurement claims, any party who wishes to challenge irregularities in a procurement procedure must move quickly and should not wait until the ultimate decision to award is made before proceeding with a challenge.

HHJ Eyre QC’s judgment provides guidance in relation to:

• The time limits for commencing court proceedings in relation to procurement claims.
• When the power to extend such time limits should be exercised.
• Whether contracting authorities have a duty to correct a challenger’s mistaken belief as to the relevant time limits.

Read the procurement claims and judicial review case study in full here.

The judge’s decision

HHJ Eyre QC decided that both the Procurement and Judicial Review claims were out of time and that he would not exercise any power to extend time in favour of Riverside.

In relation to the Procurement Claim, the judge dismissed Riverside’s argument that time only began to run on 10 January 2020. The judge held that the Council were correct that the breaches Riverside complained of had occurred on the 25 September 2019, 29 November 2019, at the very latest. The judge also decided that Riverside had requisite knowledge of the breaches on those dates.  Therefore any claims ought to have been commenced within 30 days of those dates (i.e. by the 30 December 2019 at the very latest).

Having reviewed previous court decisions, the judge outlined key points when considering the time limits for pursuing claims for breaches of the PCR 2015:

• There can be multiple challenges in respect of a single procurement process. That is because there can be multiple decisions which are in breach of the contracting authority’s duty and which cause loss or the risk of loss to the economic operator.
• Time can begin to run at different dates in respect of different breaches.
• Time could start running before the conclusion of a procurement exercise and from the date when a party had all the necessary information to know that it had a claim.
• It is not correct to say that the date of the contracting authority’s entry into a contract with a competing economic operator is typically the date when time begins to run for a claim by an economic operator under the PCR. Indeed, the converse is the case and typically time will have begun to run at a stage rather earlier than the entry into the contract because it is at that earlier stage that the authority’s breach of duty causing loss or a risk of loss is likely to have occurred.
• The court has to consider what decision is in truth being challenged or is being said to be the relevant breach of duty. If the claim is in reality founded on an earlier decision of the authority then a later decision giving effect to it does not set time running again.
• Where there are a series of breaches time runs from the date of knowledge of each breach and not from the end of the series.
• A claimant which issued a letter of claim intending it to be a genuine statement that there had been a breach of the regulations and that it was proposing to commence proceedings, would find it difficult to deny that it had sufficient knowledge to start time running, at least as regards the breach identified in the letter.

Key points for procurement claims

A party who wishes to challenge any irregularities arising out of a procurement should:

• Not wait until the conclusion of the procurement process or the award of the contract before taking action or steps to investigate the breach;
• Not delay because of any tactical or commercial considerations; and
• Take steps (including instructing legal advisors) immediately upon becoming aware of the potential breach. Time limits for procurement claims for different breaches will start ticking at different times.

On the other hand, contracting authorities will welcome this reaffirming of the strict time limits for challenges of procurement challenges and will take some confidence that, in the absence of a claim for a declaration of ineffectiveness and any good reason to extend time, that once 30 days from any potential breach has expired that they are in relatively safe waters.

Contracting authorities will also note the judge’s confirmation that there is no obligation on them to correct a challenger’s mistaken belief as to time limits for pursuing a claim or to advise the challenger as to the best way to proceed with a claim.

For more information about our public procurement and litigation services please contact a member of our team.