Time Limits for Starting Procurement Challenge Proceedings and Extending those Time Limits

Introduction

In a  previous earlier article we highlighted almost simultaneous but contrasting judgements[1] concerning the strict 30 day time limit for starting proceedings under the Public Contracts Regulations 2015 (“the Regulations”) in Regulation 92(2) and the restricted  jurisdiction to extend those time limits under Regulation 92(4) and (5).

The recent judgement in Riverside Truck Rental Ltd v Lancashire County Council [2020] EWHC 1018 (TCC) was an opportunity for the Court to review these core features of procurement challenges under the Regulations and to further examine a procurement challenge by way of judicial review[2].

Case Summary and Background

This ruling demonstrated how the Court will require strict observance of the short time limit for bringing a claim for breach of the Regulations.  That approach is very much in keeping with an established line of authority.

In this case, the Court considered (and dismissed) two applications to extend the time limit for issuing proceedings under the Regulations and for filing a claim in parallel judicial review proceedings challenging the decision to disqualify from the tender process.

The Claimant Riverside Truck Rental Ltd (“Riverside”) was contracted to supply and maintain a waste transport fleet for Lancashire County Council (“the Council”).  This contract was to come to an end in October 2020.  On 19 September 2019, the Council initiated a tender process for a replacement contract. Riverside submitted a tender but was informed by letter on 29 November 2019 that it was disqualified for non-compliance with a mandatory term of the technical specification set out in the Invitation to Tender.

On 24 January 2020, Riverside commenced proceedings against the Council under the Regulations and by judicial review[3] alleging that the November decision to disqualify them was unlawful.  Both were commenced outside of the 30 day time limit in Regulation 92(2).  Riverside did not concede that either claim was out of time (namely more than 30 days after 29th November 2019) but nevertheless issued two extension of time applications.  Both applications to extend time came before HH Judge Eyre QC.

Claim under the Regulations

The Judge confirmed that the starting point for considering the timeline for commencing proceedings under the Regulations was specified in Regulations 91 and 92.

He held that a claim for breach of a duty owed to economic operators was actionable under Regulation 91 by any economic operator who in consequence suffers or risks suffering loss or damage. It was irrelevant whether the breach had caused actual loss at the time when proceedings were commenced and the risk of loss (usually categorised as a loss of a chance claim) was sufficient to make the breach actionable and start the time running under Regulation 92.

Under Regulation 92 an economic operator had 30 days from the date when the economic operator first “knew or ought to have known that grounds for starting the proceedings had arisen”.  The level of threshold knowledge and constructive knowledge of those grounds is not high. In this regard, HH Judge Eyre affirmed the standard set in Sita UK v Greater Manchester Waste Disposal Authority [2011] EWCA Civ 156, [2012] PTSR 645 derived from the first instance judgement that: “The standard ought to be a knowledge of the facts which apparently clearly indicate, though they need not absolutely prove, an infringement”. 

Riverside had sought to argue that time only started running from the date on which it discovered the price the successful tenderer had submitted to win the tender bid (i.e. 10 January) as it was only then that Riverside discovered that it would have been the Most Economically Advantageous Tenderer (MEAT) and would have won the competition.  The Judge rejected that argument for the reasons and observations below:

  • A breach which caused the risk of loss was actionable from the date of that breach. The risk did not have to materialise into actual loss before proceedings could be commenced.  In this case the risk of the loss (being the lost chance of Riverside winning the competition) arose when Riverside had knowledge of their exclusion from the competition.
  • The knowledge Riverside acquired on 10 January 2020 that were it not for its exclusion it would have been awarded the contract, does not affect the accrual of knowledge of the risk of loss caused by its exclusion. This knowledge related primarily to the quantum of the claim as opposed to the existence of the breach in the first place since that went to how great the chance of suffering loss was.
  • If a claim is founded on an earlier decision of an authority, a later decision giving effect to the earlier decision will not necessarily affect time starting to run from the earlier decision.
  • Where an economic operator had a number of different grounds to challenge which arose at different times, then the 30 day time limit would run from the date that it had knowledge of each ground. The judgement in the case of SRCL Ltd v NHSE [2018] EWHC 1985 (TCC), [2019] PTSR 383 confirmed that proceedings can be issued at separate times for separate breaches prior to conclusion of the tender.
  • Related to 3) above, if there are a series of breaches, time will run from the occurrence of each breach and not begin running from the end of the series.

In this case, Riverside ought to have known before 10 January 2020 of the existence of a risk of loss.  The Rejection Decision of 29 November 2019 had provided Riverside with knowledge of many of the alleged breaches by the Council.  Riverside’s conduct seemed to demonstrate this – Riverside had stated as early as 2 December 2019 that the Council’s actions indicated that a legal challenge could be pursued.  On 12 December 2019, counsel was instructed and on 18 December 2019, a detailed letter of claim was sent from Riverside’s solicitors.  There are similarities between Riverside and the Claimant in Sita in that Sita had knowledge of the actionable infringement but sought further information in order to substantiate those grounds and obtain particulars of the breaches.  Riverside sought additional pricing information as to who would have won the competition in order to determine whether it was worthwhile starting a claim.

The Court’s power to extend time for commencing proceedings under the Regulation 92(4) & (5)

The time limit for commencing proceedings can be extended at the discretion of the Court if the Court considers that there is a ‘good reason for doing so’ (Regulation 92(4)).  This jurisdiction though is limited and only permits proceedings to be started 3 months after the date when the economic operator first knew or ought to have known that grounds for starting the proceedings had arisen – Regulation 92(5).

When considering this point, regard has to be paid to the public policy underlying the reason for the short time limits. Namely to ensure public contracts are awarded promptly.  Dyson LJ’s judgment in Jobsin v. Department of Health [2001] EWCA Civ 1241 is often cited as giving an account of that policy and why the resulting time limits should be strictly observed.  Dyson LJ in Jobsin made clear that commercial considerations on the part of the claimant were insufficient to constitute a good reason for extending time.

Apart from the judgement in Amey the overwhelming trend is to be very sparing in extending time and to narrowly define the “good reason” for extending time[4].  The reasons offered for extending time in this case were:

  1. The time limit ran over the Christmas vacation period;
  2. Time was taken in exploring different alternatives to pursing litigation;
  3. Not having access to all the relevant information for substantiating its claim until 10 January 2020;
  4. Acting reasonably promptly following receipt of the relevant pricing information on 10 January;
  5. Public interest arguments e.g. ensuring public bodies did not pay over the odds for services, considering alleged motivations the Council may have had in disqualifying Riverside.

In adopting the restrictive scope of “good reason” (as also occurred in the judgement in the SRCL case) the above reasons were rejected.  Further, the Judge held that in reality circumstances showed that Riverside had failed to begin proceedings expeditiously and had waited to see how commercially viable its claim could be.  The Court made it clear that internal commercial considerations were not a good reason to extend the time period for issuing a claim and that ruling was very much in line with Dyson J’s findings in Jobsin that a claimant’s commercial considerations were insufficient to constitute a good reason to extend time.

Judicial Review Application for An Extension of Time

This part of the judgement is especially illuminating.  The Judge ruled that the considerations concerning the application to extend time were not a replica of Regulation 92(4) and (5) and involved applying the general principles governing out of time judicial review proceedings.  However, those principles operated in the context of public procurement where the public interest demanded swift resolution of disputes.

The Judge set out the main points to resolve:

  • Whether there was a reasonable objective excuse for filing out of time.
  • Whether there would be any prejudice to the party defending the claim or any third parties owing to the delay in commencing proceedings/in allowing an extension. It was noted that there would be a real risk of prejudice to Monks, the party who had been awarded the contract, but that even if there had been no risk of prejudice it was not inevitable that an extension of time application would be granted.
  • Whether there was a public interest in allowing the claim to proceed. This needed to be balanced against the public interest in ensuring that public procurement claims are progressed and resolved in a timely way.

The reasons for the delay in issuing proceedings and the conclusions relating to those reasons in the claim made under the Regulations were applied in the judicial review context – “In those circumstances there was no reasonable objective excuse for the failure to issue the Judicial Review Claim in time. As with the Procurement Claim the reality is that the claim was issued out of time because the Claimant failed to appreciate that the relevant time limit was 30 days from 29th November 2019.  [Paragraph 107 of the judgement]

Conclusions

  • The public interest based policy approach to strictly apply the time limits in the Regulations was affirmed.
  • A consequence of this position is that the scope for granting an extension of time remains very limited – including if the reason for being late is a mistake in understanding the time limits. This signals that the more generous approach in Amey can be regarded as an isolated case and the more conventional approach in SRCL is to be favoured.  As such the relevance of the shortness of delay and lack of prejudice to a Defendant are in the future unlikely to prove to be weighty.
  • Different breaches could give rise to different time limits within the same procurement process.
  • The judgment usefully assesses the considerations in applications for an extension in procurement challenges brought by way of judicial review. The Court is likely to take a similar approach to the one it adopts under the Regulations and it seems remote that a good reason under the Regulations will not also be an objectively reasonable excuse for being late. It is conceivable that the weight attached to the judicial review public interest factor in allowing an out of time claim to proceed will only sound in judicial review proceedings.

[1] Amey Highways Ltd v West Sussex County Council [2018] EWHC 1976 (TCC) and SRCL Ltd v National Health Service Commissioning Board [2018] EWHC 1995 (TCC)].

[2] See: in particular Parts 54.5 and 54.5(6) of the Civil Procedure Rules concerning meaning of “decision” which may be challenged under the Regulations by judicial review and the time limit for filing a claim form.

[3] An example of a procurement challenge brought by judicial review, and which raises a number of the special features of a challenge brought that way,  is Kenson Contractors (Benington) Ltd v. LB of Haringey [2019] 1230 (Admin).

[4] See for example Mermec UK Ltd v. National Rail Infrastructure Ltd [2011] EWHC 1847(TCC) where matters beyond the control of the claimant may amount to a good reason such as illness or detention of the relevant personnel.

This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any of the issues raised in this article, please contact us today by telephone or email  enquiries@sharpepritchard.co.uk.

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