Lancashire County Council v Brookhouse Group Limited

For a claim seeking a declaration of ineffectiveness concerning a directly awarded contract, the six-month period under the Public Contracts Regulations 2015 applies unless the contracting authority publishes a relevant contract award notice. The 30-day period based on information and reasons applies to the different situation where a competition has taken place and an unsuccessful candidate or tenderer is informed of the contract and relevant reasons. Those reasons concern rejection within an actual procurement process. They do not include an explanation to a hypothetical economic operator of why no competition occurred. A contracting authority cannot shorten the period by withholding a contract award notice to avoid alerting other economic operators.

Brookhouse challenged the Council’s direct award of a development agreement to Maple Grove, alleging that the contract was subject to the Public Contracts Regulations 2015 and seeking a declaration of ineffectiveness. The Council denied that the contract was covered by the Regulations but relied on regulation 93(2)(a), arguing that a 30-day period had begun when it explained its position in correspondence dated 22 September 2022.

The High Court struck out the relevant limitation paragraphs of the Council’s defence and dismissed its cross-application to strike out the claim: [2023] EWHC 2921 (TCC). The central issue on appeal was whether the correspondence could trigger the 30-day period despite there having been no competition.

The appeal was dismissed. Lord Justice Coulson gave the leading judgment, with Lady Justice Nicola Davies and Lord Justice Newey agreeing.

1. Statutory structure. The two grounds for a declaration of ineffectiveness under regulation 99 are mirrored by the two mechanisms in regulation 93. The first ground concerns a direct award without prior publication of a contract notice. In that situation, the six-month period in regulation 93(2)(b) applies unless the authority reduces it by publishing a relevant contract award notice under regulations 93(3) and 93(4). The mechanism in regulations 93(5) and 93(6) concerns the different case where a competition has taken place and the contract was then concluded in breach of the applicable requirements.
2. Relevant reasons. Regulation 93(6) refers to the reasons an economic operator would have been entitled to receive under regulation 55(2). Regulation 55(2) presupposes an actual competition and concerns why a candidate’s request or a tender was unsuccessful. It does not require reasons explaining why no competition took place and cannot be extended to a hypothetical economic operator.
3. Candidate status. Brookhouse was not a candidate in 2012 or 2022. A request to participate can arise only after a call for competition or contract notice. The Public Contracts Regulations 2006 and the later Procurement Act 2023 could not alter the construction of PCR15. A would-be candidate is not a status recognised by PCR15.
4. Policy and result. The Council could have triggered the shorter period by publishing a contract award notice. Its tactical decision not to do so could not justify construing regulations 93(5) and (6) to avoid the wider requirements of transparency, fairness and equal treatment. The claim, issued on 20 January 2023, was within six months of the development agreement. The High Court’s order therefore stood.

• Court of Appeal (Civil Division): The appeal was dismissed on 28 June 2024.
• High Court of Justice, Technology and Construction Court: By order dated 20 November 2023, the court struck out paragraphs 21–25 of the Council’s defence and dismissed the Council’s cross-application to strike out the claim: [2023] EWHC 2921 (TCC).