Lifting the automatic suspension: the new test under the UK Procurement Act 2023

In the first case deciding an application to lift the automatic suspension under the Procurement Act 2023, the court has refused to lift it. Despite finding that damages would be an adequate remedy for the claiment, the judge in ParkingEye Limited v Velindre University NHS Trust and Cardiff and Vale University Health Board (2026) considered that proper weight should be given to the public interest in ensuring that public contracts are awarded in accordance with the law.

The automatic suspension arises when a claimant issues a claim during the applicable standstill period which prevents the contracting authority from signing the procured contract with the winning bidder.

For contracts procured under previous regulations, such as the Public Contracts Regulations 2015, the old test is still applied under regulation 96(2) of those regulations. This test mirrored the approach in American Cyanamid. In that test, if damages are held to be an adequate remedy for the claimant, it is highly likely that the automatic suspension will be lifted. Consideration of what was in the public interest would become almost obsolete.

Test 'substantively' different

The judge in Parkingeye has confirmed that the new Procurement Act test in section 102(2) is "intended to be substantively and not merely formally very different" (at paragraph 30) to the American Cyanamid test.

Following the decision in Parkingeye, the public interest must be considered in every case and has parity with other factors to be considered. The judge explained that the way the new public interest factor was worded "seems to me to show that the public interest test will generally tend to favour keeping the suspension in place" (at paragraph 31).

Adequacy of damages for the claimant under the Procurement Act test is now only one matter to be taken into consideration, rather than being the decisive stage that determines whether the suspension is lifted. 

The consideration of public interest under the Procurement Act centres around: 

• upholding the principle that public contracts should be awarded, and contracts should be modified, in accordance with the law; and
• avoiding delay in the supply of the goods, services or works provided for in the contract or modification (for example, in respect of defence or security interests or the continuing provision of public services).

These examples of public interest considerations have provided guidance to the court.

What happened in Parkingeye?

The case concerned a contract for car park management services. The incumbent service provider (Parkingeye) was an unsuccessful bidder who sought to challenge the procurement process.  The judge considered and determined the following points when applying the Procurement Act test:

• Car parking services would continue to be provided while the suspension remained in place. The existing contract had been extended and the judge was not convinced that the arguments of poor performance indicated any genuine public interest in changing service provider.
• The level of benefit under the new contract was considered "modest".
• The judge was not persuaded by the arguments that damages would not be an adequate remedy for the claimant.
• With "proper weight" given to the public interest in ensuring that public contracts are awarded in accordance with the law, the judge suggested that from now on "the courts do not too lightly lift the suspensions" (paragraph 85).

Osborne Clarke comment

Parkingeye might be subject to review by the Court of Appeal. However, this first case marks a significant development in the law, which favours the remedy a claimant often seeks in procurement litigation: being in with a chance of being awarded the procured contract.

As the new Procurement Act test comes in and fewer claims are brought under the previous regulations, there will be an obvious and stark difference in the approach adopted by the courts. The same factual scenario of any given case could have drastically different outcomes depending on which test applies.

Ewan West KC , who has been instructed by Osborne Clarke on two of the most recent applications to lift under the Public Contracts Regulations 2015, comments that there can be no doubt that the approach taken in Parkingeye represents a seismic change, not just in terms of how the respective interests of suppliers and contracting authorities are taken into account when determining the appropriateness of maintaining the automatic suspension, but also as importantly the public interest.

It is certainly well arguable that the outcome of some cases decided under the pre-Procurement Act 2023 regime might have been different if the new test had been required to be applied, not least given the importance the judge in Parkingeye attached to the public interest in contracts being awarded in accordance with the law. While this factor may have been taken into account in cases where the court has been required to consider the balance of convenience under the American Cyanamid test, it now apparently has a far more prominent, if not potentially decisive, role in determining the outcome of an application to lift which is perhaps unsurprising given how the new statutory test is framed.