7 January 2010 | David Gollancz and Victoria Ross
How long does a supplier have to bring a legal challenge against a public contract award?
THE CASE
Following a notice in OJEU, Uniplex submitted a tender to NHS Business Services Authority (NHS) in July 2007 to be party to a framework agreement for the supply of haemostats (surgical equipment). In November 2007, Uniplex was informed in writing that its tender had been unsuccessful. The letter set out the award criteria and advised Uniplex of its right to challenge the decision. On Uniplex’s request, NHS provided details of its evaluation methodology and the characteristics of the successful tenders. On 28 January 2008, Uniplex sent NHS a letter before action and on 12 March 2008 started proceedings in the High Court seeking damages.
The High Court asked the European Court of Justice (ECJ) to rule on whether time starts to run on the date of the breach of law or the date when the applicant knew or ought to have known of the breach. It also asked if an action could be dismissed as inadmissible if it was not brought “promptly” and how the UK court should exercise its discretion to extend the time period for bringing proceedings.
The Advocate General noted that there were no express time limits for bringing proceedings under the remedies directive but that any limitation period introduced by member states must comply with the principles of effectiveness and equivalence.
The Advocate General opined that the principle of effectiveness requires that a limitation period for compensation claims may not start to run until the time when the applicant knew or ought to have known of the alleged breach of procurement law.
The Advocate General said that an application should not be declared inadmissible for lack of “promptness” if it is brought within the three-month limitation period. It would be for the national courts to decide whether the regulations can be interpreted so that they do not constitute a bar to admissibility.
Finally, the Advocate General considered that when exercising its discretion whether to grant an extension of time to bring proceedings after the expiry of the three-month period, the national court should ensure that the applicant has at least three months starting from when he knew or ought to have known of the alleged breach.
WHAT THIS MEANS
The ECJ is not obliged to follow the opinion of the Advocate General. However, if it does, its decision will certainly change the dynamics for challenges in the UK in favour of suppliers.
For suppliers, such a decision would relieve to some degree the need to issue proceedings immediately. Furthermore, they would be able to await further information from contracting authorities so as to determine whether there was a breach.
For contracting authorities, the decision would certainly increase uncertainty. One could imagine that contracting authorities would be more likely to be as transparent as possible to ensure that the bidder at least ought to have known of a breach.
For now, we await to see whether the ECJ will follow the Advocate General’s opinion.
* By David Gollancz, partner, and Victoria Ross, solicitor, Field Fisher Waterhouse
