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Time limits for commencing proceedings in procurement challenges

Colin Ricciardiello discusses a landmark procurement challenge judgment on the time limit for commencing proceedings.

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When it comes to reported UK procurement challenge judgments under the Public Contracts Regulations 2015, there are a surfeit of cases on: the consequences of not commencing proceedings in time; when the Court will find that there is a good reason to extend time.

So, it might be a little surprising to note that a recent judgment traversed a novel point for the English court to decide in this area. That is if proceedings are started late, but before the standstill period expires, does the fact that the standstill period has not elapsed amount to a good reason to extend time[1]?

Since the judgment in Access For Living v. London Borough of Lewisham HT -2020 -000092 (handed down on 23 December 2021) we know that the answer is: “No. It is not a good reason to extend time”.

At first blush the timings of these two matters ought not to interact as the standstill period under Regulation 87(3) is shorter (most commonly it is at the end of the 10th day after the Regulation 86 award decision notice is received) than the time limit to commence proceedings under Regulation 92(2), being 30 days from the date of actual or constructive knowledge that the grounds for starting a claim had arisen. If the grounds of knowledge to bring the claim arose from the contents of the award decision notice, then the standstill period and the time limit for starting a claim commence at the same time – namely from receipt of the award decision notice. However, it is commonplace to extend the standstill period in cases where the parties are corresponding at the pre-action stage and indeed the Technology & Construction Court’s guidance on such challenges encourages sensible extensions as a part of the objective to avoid the commencement of unnecessary claims.

Also, when it comes to whether there is a good reason to extend time, the interplay between the two it is not immediately obvious since they are doing two different things. Until its expiration, the standstill period prevents a contracting authority from entering into a contract with the successful tenderer whereas the 30 day period controls the deadline for commencing proceedings. The two elements do though come together in this way – if proceedings are commenced during the standstill period then that engages the contract -making suspension under Regulation 95 and so ensures the continuance of the bar to entering into the contract in issue. That in turn gives the court the jurisdiction to award the wide remedies under Regulation 97 which are only available if the contract in issue has not been entered into.

Access for Living ("Access") are a charity and an incumbent provider who relied heavily on a workstream from Lewisham. It had been disqualified from an adult social care procurement for failing to meet a Quality scoring threshold. It was informed of that decision by a notice dated 7 February 2020 (but received on 9 February 2020) and that a standstill period was being observed.  Accordingly, the 30-day time limit expired on 9 March 2020 but the claim was started on 11 March 2020. There was no dispute over whether the claims based on the information in that notice had been commenced out of time – they were two days late. However, they were still commenced before the extended standstill period expired because an extension had been agreed to 13 March 2020.

As it emerged from Access’ evidence it accepted that the reason for the lateness was an error on its solicitors' part in “conflating” or they “equated” the extension of the standstill with a corresponding extension of limitation. It was also conceded that this error was not in itself a good reason to extend time. That concession was rightly made as the test was whether there is a good reason to grant an extension, not whether there was a good reason for not commencing in time  Amey Highways Ltd v West Sussex County Council [2018] EWHC 1976 (TCC), a case where an extension was granted.

In its proceedings, Access claimed that the reasons in its notice showed that Lewisham had misapplied an unambiguous award criterion. In the alternative, a complaint was made that the ITT was vague and breached the principle of transparency. If so Lewisham argued knowledge of that breach ran from the date of publication of the ITT – 29 October 2019 – and so there was no power to extend in respect of that claim as 3 months from then had long expired.

The court had before it two applications: Lewisham’s (based on its “limitation defence”) to strike out the claim and summary judgment; and Access’ to extend the time to commence proceedings. The judge, Jefford J. struck out the claim and refused Access’ application. She though did hold that it was reasonably arguable that knowledge of the ITT transparency claim did not arise until Access knew of Lewisham’s interpretation and that was only known when it received the notice on 9 February 2020. However, as the time in respect of that claim also ran from that date, it too was time-barred.

The judge noted that the 30 day limit was a short one “…but the courts have repeatedly emphasised that it should be observed”. As in many other limitation cases, the origin of that approach was identified as being the Court of Appeal’s judgment in Jobsin v.Department of Health [2001] EWCA Civ 1241. In Jobsin the Claimant argued that it did not know it had a claim until it instructed solicitors, that the short extension did not prejudice the Defendant. The judgment in Jobsin alluded to:

the “…good policy reason that it is in the public interest that challenges to the tender process of a public services contract should be made promptly so as to cause as little disruption and delay as possible”;

“…. a wider public interest in ensuring that tenders are processed as quickly as possible “;

a balance between the two competing interests, to allow challenges to be made and the need to ensure such challenges are brought expeditiously had to be struck. The result of that balance was the time limit. 

It was that wider interest which led the judge to decide there would be prejudice to Lewisham if an extension was granted. Thus, commencing proceedings was contrary to that policy and interest and extensions should only be granted if there was a good reason – in Jobsin ignorance of the law and the short duration of the delay were held not to be good reasons.

In respect of the duration of the extension, the judgment in Access referred to (and much approved of) the judgment in Mermec Uk Ltd v Network Rail Infrastructure Ltd [2011] EWHC 1847 (TCC). At 23 (c) of that judgment Akenhead J. said :

It is said that the delay was only some six or seven days and that there should be an extension for such an insignificant period because it is a relatively short delay. However, there is no point in having a three month period [ as it then was and not 30 days] if what that means is three months plus a further relatively random short period”

In addition, Akenhead J.’s judgment in Mermec also featured heavily in the Judge’s reasoning when it came to what constituted a good reason for extending time and (without being exhaustive), a good reason would include factors which prevent the claim form being issued and which are beyond the control of the claimant; these include illness or detention of relevant personnel.

In Turning Point Ltd v. Norfolk County Council [2012] EWHC 2121 a short extension of 14 days was sought and that was said to be reasonable and proportionate but the same judge as in Mermec held:

That cannot in itself be a good reason because the 30 day period is clearly defined and, if statutorily, what was intended was 30 days plus a reasonable proportionate and short period, that is what the legislators would have written. A good reason will usually be something which was beyond the control of the Claimant; it could include significant illness or detention of relevant members of the tendering team.”

In this vein it was also decided in SRCL v NHS Commissioning Board [2018] EWHC 1985(TCC) that good reason “…should ordinarily, relate to some factor that has an effect upon the ability of a claimant to issue. This is the approach of Akenhead J. In Mermec …” . SRCL at [154] usefully summarises the principles when considering the grant of an extension of time and notes that: the categories of good reason are not closed or exhaustively listed; or which factors have relative weight to one another and; a “Lack of prejudice to the defendant is not a determinative factor”.

Jefford J. in Access noted that it was unfortunate such applications provoked a trawl through many authorities when the relevant principles were adequately set out in Mermec and if there was a need to go further then SRCL [154] were sufficient. From that perspective the following principles can be derived from the judgment in Access on good reason to extend time ;

  1. It may be a good reason if there is a factor in play beyond the control of the claimant which prevents it from starting a claim in time. There was no reason why Access could not have commenced proceedings by 9 March 2020 when the 30 day limit expired as there was nothing outside of their control. Access had accepted that – the reason for not starting in time was mistakenly equating the standstill for entering into the contract as also acting as a standstill for the purposes of limitation.
  2. The decision making strictures applying to Access as a charity were significant but that did not stop it from preparing to issue in time if it was properly advised as to the relevant time limit.
  3. The merits of the claim, the devasting impact of losing the procurement were held not to be relevant and if they were, that would require the court to embark on some preliminary assessment of the merits in every case and that could not have been the intention of the Regulations.
  4. The fact the delay of two days was short was clearly insufficient reason to extend time. Access submitted that none of the authorities for an extension were concerned with such a short time. If a short delay of one or two days is reason to grant an extension then why not three or four days and so on. That was the “random” number of extra days point made by Akenhead in Mermec and Turning Point.
  5. The purpose of the short time scale in issuing proceedings was to prevent delay in entering into the contract but in this case, because the standstill period had not expired, such a delay could not arise. Whilst superficially attractive, the Judge held that in reality this was a situation of there being no good reason not to grant an extension, because there is no prejudice to Lewisham, rather than it being a good reason to grant the extension. “If I were to accept that approach, I would in effect, treat lack of prejudice to the defendant as the determinative factor and that would be wrong in principle and not accord with decided cases”.

The Northern Ireland authority relied upon here (Henry Brothers v Department of Education for Northern Ireland [2011] NICA 59) was, it was noted, decided before the English decisions on the principles to be applied. There was little analysis of why the shortness of the extension was a good reason and such a basis was inconsistent with subsequent English authorities.

There are many instances when a standstill period has ended, the 30 day time limit has expired but the contracting has yet to enter into the contract. If this approach was accepted then, by extension, in all of those cases that would mean that the claimant would have a good reason to start a claim late. In this regard, the emphasis in Jobsin is on delay to the whole process and that would occur as in this scenario the contract-making suspension would take effect after the Regulations intended that it should.

This judgment helpfully summarises and affirms the principles in what is an area of discretion and one need look no further than Mermec. In applying those principles it provides clarity in confirming that extensions of the standstill are not a good reason to similarly extend the time for commencing proceedings. Practitioners would be well advised to keep the two separate and, to be secure, commence proceedings before the 30 days expires. An alternative would be to obtain an agreement that the contracting authority will consent to an extension and not take a time-bar defence. We know from the judgment in Amey that the court has treated consent as a good reason to extend time.

[1] There is a limited discretion to extend time under Regulation 92(4) if there is a good reason to do so but that discretionary power is restricted to allowing proceedings to be commenced no more than 3 months after the date of knowledge of the grounds to bring the claim – Regulation 92(5).

Colin Ricciardiello is a partner in Sharpe Pritchard LLP and was the solicitor for Lewisham.

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