Local Government Lawyer - A matter of time

A matter of time

Tuesday, 02 February 2010

A new ruling of the European Court of Justice has significantly extended the period in which disappointed bidders can challenge procurement decisions, writes David Marks

On 28 January 2010, the European Court of Justice (ECJ) gave a ruling on whether UK time limits for challenging decisions under the public procurement rules comply with EU law.

The ECJ held in the Uniplex case that UK rules requiring challenges to be brought “promptly and in any event within three months from the date when grounds for bringing proceedings first arose unless the Court considers that there is good reason for extending period within which proceedings may be brought” do not comply with EU law, specifically the then prevailing EU directive on public procurement (Directive 89/665).

The case started as a request from the High Court to the ECJ for an interpretation of EU law. In response to the questions asked by the High Court, the ECJ held that:

the period for bringing proceedings seeking to have an infringement of the public procurement rules established or to obtain damages for the infringement of those rules should start to run from the date on which the claimant knew, or ought to have known, of that infringement;
Directive 89/665 precludes a national provision, such as that at issue in this case, which allows a national court to dismiss, as being out of time, proceedings seeking to have an infringement of the public procurement rules established or to obtain damages for the infringement of those rules on the basis of the criterion, appraised in a discretionary manner, that such proceedings must be brought promptly; and
Directive 89/665 requires the national court, by virtue of the discretion conferred on it, to extend the limitation period in such a manner as to ensure that the claimant has a period equivalent to that which it would have had if the period provided for by the applicable national legislation had run from the date on which the claimant knew, or ought to have known, of the infringement of the public procurement rules. If the national provisions do not lend themselves to an interpretation which accords with Directive 89/665, the national court must refrain from applying them, in order to apply Community law fully and to protect the rights conferred thereby on individuals.

The time limits for review therefore cannot run simply from the date of breach of the applicable public procurement provisions. The ECJ noted that at the time that a candidate or tenderer learns that it has been rejected, it is not in a position to establish whether there has been any illegality. It is not until it has been informed of the reasons for its elimination from the procurement procedure that it can come to a view on whether there has been any illegality and whether it is appropriate to bring proceedings.

This judgment also means that UK courts do not have the discretion to reject a claim due to lack of promptness. UK courts must allow claims to proceed where they have been brought within three months of the claimant becoming aware that he could make a claim or ought to have been so aware.
In summary the ECJ noted that a limitation period, the starting point of which was unknown to the candidate or tenderer or the duration of which is placed at the discretion of the competent court, is not predictable in its effects. Consequently it did not ensure effective transposition of Directive 89/665.

Although the case was based on an earlier version of the remedies directive for public procurement, the principle will apply to the subsequent remedies regime which was introduced with effect from 20 December 2009. The principle will also apply to procurement by utilities where the UK implementing rules are similar.

David Marks is a partner at CMS Cameron McKenna.

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