Cabinet Office unveils revamped time limits for procurement challenges

The government is to introduce major changes from the beginning of October to the time limits for bringing legal proceedings under the procurement regulations.

Publishing its response to a public consultation on the ECJ decision in Uniplex (UK) Ltd v NHS Business Services Authority C-406/08 last week, the Cabinet Office concluded that the time limit should be: “30 days running from the date of knowledge, with Court discretion to extend the period up to an absolute minimum of three months from the date of knowledge”.

The Cabinet Office said it believed that this time limit would strike the optimum balance between several important factors. In this respect, it would:

• Allow enough time “for a claimant to realistically assess the position, and for alternatives to litigation to be explored (e.g. through constructive dialogue) without the need to issue ‘protective’ proceedings and prematurely enter a litigious phase which then develops a life and impetus of its own”
• Not be so long “that proceedings that could easily have been started sooner are delayed simply to keep the aggrieved supplier’s options open or simply because minds are only focussed to take a decision when the deadline approaches, with resulting unnecessary extra uncertainty for the contracting authority (and, where relevant, the successful supplier)”
• Avoid anomaly with the ineffectiveness time limits
• Be reasonably certain and predictable, whilst including some flexibility to avoid injustice
• Be reasonably simple and easy to understand, “though not at the price of sophistication which is necessary to avoid injustice”
• Take account of the need to avoid discrimination and to comply with other relevant principles of EU Law, “notably the principle of effectiveness”.

The regulations will continue to use the traditional general wording “where the Court considers that there is a good reason for” extending the limit, the Cabinet Office said.

The new time limit will apply where the date of knowledge occurs after 1 October 2011. Transitional provisions apply where the date of knowledge occurred before 1 October 2011.

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” did not comply with EU law.

The consultation also considered whether the ‘date of knowledge’ should be defined. In the light of the responses, the Cabinet Office took the view that:

• Attempting to define the date of knowledge would be problematic
• There was no consensus about how such a definition would be framed
• The more specific the regulations attempted to be on the point, “the greater the likelihood that they might not produce an optimal result for all cases (the facts of which could vary enormously)”
• It was possible that the European Court of Justice would in future cases give further guidance on how the general concept laid down in Uniplex should be applied in practice. It was “desirable that the terms of the UK regulations should be generic enough to be not explicitly inconsistent with any such further refinements”
• Any certainty given by detailed wording in the regulations defining the date of knowledge “would be illusory as the wording might be required by the ECJ to be read in a different way or indeed ignored (as indeed, happened in the Uniplex case in relation to the old wording of the time limit provision in the Regulations)"
• It would nevertheless “be wrong to lay down a general principle which might, albeit in rare circumstances, fail to guarantee to claimants the 10 or 15 days guaranteed by the specific wording of article 2c of the Directive”.

The Cabinet Office has therefore concluded that “the general rule laid down in the Regulations should be that the new general time limit of 30 days will run from that date on which the economic operator ‘first knew or ought to have known’ that grounds for starting the proceedings had arisen, leaving the Court to apply this in the circumstances of each case and in the light of any further guidance from the ECJ”.

It also said that to ensure strict compliance with the Directive, “paragraph (3) of PCR regulation 47D (UCR regulation 45D) should be retained, so that it qualifies the new general limit in the same way that it qualified the old general limit, to ensure that claimants always have at least the 10 or 15 days from the triggers stipulated by art2c of the Directive”.

The Cabinet Office also set out its position on the so-called ‘deemed service’ problem. It has decided that the best way to resolve this is to:

• Refocus the time limits so that the claim form need only be issued (rather than served) within the time limit. This restores the position taken before the 2009 reforms
• Introduce a new requirement that service be effected within seven days of issue. This mirrors the obligation in judicial review proceedings
• Provide for the automatic suspension to apply where the contracting authority becomes aware that the proceedings have been issued, leaving it for the Court to determine this as a factual question.

The Cabinet Office agreed not to restore the obligation to send pre-litigation notices.

Philip  Hoult