Parkingeye Limited v Velindre University NHS Trust & Anor

Applications to lift the automatic suspension under section 102(2) of the Procurement Act 2023 require a single factual assessment balancing the public interest, the interests of suppliers and any other relevant matters.

The adequacy of damages remains relevant, but no longer has the decisive significance it had under the American Cyanamid approach. The public interest generally favours maintaining suspension while the lawfulness of a proposed award is unresolved. Lifting suspension ordinarily requires a very persuasive countervailing public interest or an overriding private interest. The court should not conduct a mini-trial of the procurement merits.

Parkingeye, the incumbent car park-management provider, challenged the decision of Velindre University NHS Trust and Cardiff and Vale University Health Board to award a replacement contract to National Parking Control Group Ltd. The challenges alleged, among other matters, errors in the tender and contract award notices, failures concerning conditions of participation, unlawful evaluation and inadequate record-keeping.

The defendants applied under section 102(2) of the Procurement Act 2023 to lift the automatic suspension imposed by section 101(1). The central issue was how the new statutory test should be applied and whether the public or private interests justified allowing the contract to be concluded before trial.

1. The applications to lift the automatic suspension were refused. The respondent’s undertaking in damages was accepted in a form appropriate for an interim order.

2. Section 102(2) of the Procurement Act 2023 requires the court to balance the public interest, the interests of suppliers, including the claimant, and any other relevant matters. The statute creates no hierarchy, default position or presumption. Weight is a matter for the court on the particular facts.

3. The new test is substantively different from the former test under regulation 96(2) of the Public Contracts Regulations 2015. Adequacy of damages remains relevant, but it is only one consideration. The court must not treat adequacy of damages for the claimant as automatically requiring the suspension to be lifted.

4. The public interest in section 102(2)(a)(i) concerns the importance of withholding the award while a dispute about its lawfulness remains unresolved. It does not require a mini-trial or assessment of the substantive merits, save perhaps in a clear case.

5. The examples in section 102(2)(a)(ii), including defence, security and continuing public services, indicate that the provision is principally concerned with serious delay or interruption in the supply of goods or services. A contracting authority’s preference for a new provider or improved contractual benefits may be relevant, but is not determinative.

6. The respondent’s preference for performance rather than compensation was relevant but did not make damages inadequate in principle. Difficulties in assessing loss, including loss of a chance, did not justify maintaining the suspension. Nor did unsupported allegations of reputational harm or the cost of removing equipment under the existing contract.

7. The alleged merits of the procurement challenge, the delay in making the application and the interests of the successful bidder did not outweigh the public interest in resolving the lawfulness dispute first. The absence of any threat to the continued provision of parking services was significant.