M. Holleran Ltd. v Severn Trent Water Ltd.

Under regulation 32(4) of the Utilities Contracts Regulations 1996, each discrete procurement complaint has its own limitation starting point. The claimant’s knowledge of the breach is irrelevant. Proceedings must be brought promptly and, in any event, within three months of the facts constituting the particular complaint, unless there is good reason to extend time.

The notification required before proceedings must identify regulation 32, the breach or apprehended breach, and the intention to bring proceedings. It must also be given promptly. An extension depends on all the circumstances, including delay, its explanation, responsibility for it, and prejudice to the procurement process and third parties. Commercial pressure, ignorance of the law, or hope of obtaining the contract will rarely constitute good reason.

The claimant challenged the defendant utility’s contractor-selection process for its AMP4 programme under the Utilities Contracts Regulations 1996. It alleged defects in the Official Journal notice, discriminatory treatment of potential contractors, and unfair turnover and consortium deadlines.

The claimant became aware of the relevant matters by August 2003, but notified the defendant of the alleged breaches and its intention to bring proceedings only on 7 November 2003. Proceedings were issued on 11 November 2003. The preliminary issue was whether the claim was barred by regulation 32(4), and whether an extension of time should be granted.

1. The court declared that the claim was barred by regulation 32(4) of the Utilities Contracts Regulations 1996 and refused an extension of time.

2. The three-month period runs from when the facts constituting the particular complaint occur. The claimant’s knowledge, or means of knowledge, of the breach is irrelevant. Each discrete complaint must be considered separately. The alleged defects in the Official Journal notice arose no later than its publication, the alleged discriminatory workshop treatment arose in June 2003, and the alleged inappropriate criteria and consortium deadline arose on 25 July 2003.

3. A refusal to extend a compliant deadline does not create an independent breach merely because the claimant failed to discover or understand the relevant notice, criteria or deadline. The later refusals therefore did not avoid the limitation bar.

4. The requirement that proceedings be brought promptly is distinct from, and reinforces, the three-month limit. In the procurement context, speed is necessary to prevent uncertainty, disruption and prejudice to utilities and other contractors. Even if the three-month period were disregarded, the claimant had not acted promptly after learning the grounds of complaint.

5. The notice required by regulation 32(4)(a) must identify regulation 32, the breach or apprehended breach, and the intention to bring proceedings. It must be given before proceedings and sufficiently promptly to allow the utility to remedy the position. The August exchanges did not satisfy that requirement; the November letters did, but were themselves too late.

6. Whether there is good reason to extend time is a discretionary assessment of all the circumstances. Relevant considerations include the length and reasons for delay, the claimant’s responsibility, any contribution by the defendant, and prejudice. The claimant offered no good reason for its delay. The procurement process itself carried an inherent risk of prejudice, and reopening the selection process would cause further disruption and undermine its credibility.

Not stated in the judgment.