Home | News & events | Legal updates | Procurement alert: remedies - just when you thought it was safe...
Procurement alert: remedies - just when you thought it was safe...
11 February 2010
The new remedies rules may need to be interpreted in light of a very recent European Court of Justice (ECJ) Judgment in relation to limitation periods for bringing challenges for breach of the public procurement rules.
It is likely as a result of this Judgement, unsuccessful bidders will in the future benefit from what appears to be a "relaxed" interpretation of the overarching European Commission Directives. Consequently, Registered Providers will need to look again at their procedures.
On 28 January 2010 the ECJ gave Judgment, on a referral for a preliminary ruling from the High Court during a case called Uniplex (UK) Limited v NHS Business Services Authority. The ECJ ruled:
- That the period for bringing proceedings should start to run from the date on which the Claimant knew, or ought to have known, of the alleged breach of procurement regulations; and
- That a provision of national law allowing a national Court, at its discretion, to dismiss proceedings being brought out of time on the basis they were not bought "promptly" (even though brought within the stated 3 month time limit) breached the principles of certainty and effectiveness and is incompatible with European Procurement Directives; and
- That national Courts must, therefore, exercise discretion under their applicable law to extend the time for bringing proceedings in order to ensure compliance with EU Directives.
The ECJ Judgment is in part a clarification of the relationship between aspects of the old Remedies Directive (89/665) and the new Remedies Directive (2007/66): however, Article 1(1) of the old Directive still provides that Member states must take measures necessary to ensure that decisions taken by Contracting Authorities under the procurement rules may be "reviewed effectively and in particular as rapidly as possible". It is likely therefore, this ruling from the ECJ applies equally to the new remedies rules and, if so, that has significance for future procurement exercises.
The facts behind the referral in the Uniplex case are not particularly exceptional - in March 2007 NHS Business Systems published a tender notice in the Official Journal advertising a Framework Agreement for the supply of haemostats to the National Health Service. Uniplex received an Invitation to Tender and submitted its Tender in July 2007. On 22 November 2007 Uniplex was informed by NHS Business Services in writing that awards had finally been made to three tenderers, but not to Uniplex. On 28 January 2008 Uniplex sent NHS Business Services a Letter Before Action alleging various breaches of the Public Procurement Rules. Following further correspondence with NHS Business Services, Uniplex began proceedings in the High Court on 12 March 2008 seeking damages for losses suffered as a result of alleged breaches of the procurement rules by NHS Business Services.
What does this mean for Registered Providers?
OGC has yet to say how HM Government intends to approach this decision, but Registered Providers should note that the case would seem to suggest, for the moment, that UK Courts will:
- No longer apply the requirement that actions be bought promptly, so as to exclude any actions that were brought within the stated 3 month period (but arguably not promptly).
- Will interpret the limitation rules so that the 3 month period in which to bring proceedings will not begin until the Claimant can be said to know, or ought to have known about the alleged breach of the procurement rules.
Consequently, Registered Providers should take greater care in giving debrief to bidders, both at the PQQ stage (or at de-selection under Competitive Dialogue) and in the contents of their Alcatel letters: a structured approach to debriefing, including keeping notes about what was discussed, what documents were referred to and then issuing a record of what was discussed, should be considered: doing so will assist in removing doubt about when the Claimant can be said to have known, or ought to have known about the alleged breach.
Whilst doubtless Registered Providers have been doing this as a matter of course by way of best practice in their procurement exercises, it becomes even more important to do so now in the light of the ECJ ruling in Uniplex.
© Shoosmiths. This page is for general information: it is not legal advice. Please read our full terms and conditions for details of the disclaimers and exclusions which apply.
Search the site
Enter the keywords below to search:
Get in touch
Mark Robinson
Associate
T: 03700 86 4159
I: +44 (0)121 625 4159
E: mark.robinson@shoosmiths.co.uk