Procurement Act 2023 — what the first case means for automatic suspensions

The first judgment under the Procurement Act 2023 (the Act) has now been handed down in Parkingeye Limited v Velindre University NHS Trust & Anor [2026] EWHC 1019 (TCC), which provides clarity on how courts will approach applications to lift automatic suspensions on contract awards.

In reaching its decision, the Court applied for the very first time the new test found in section 102(2) of the Act. In doing so, the Court upheld the suspension. 

Under the previous regime, courts frequently lifted suspensions. However, this decision suggests that a different approach may be taken under the Act.

Here, Paddy Fearnon, Andreas Petrou and Michael Winder from our specialist public procurement team outline what's changed under the new test and consider what this may mean in practice for both contracting authorities and challengers.

What is automatic suspension in public procurement?

Where a legal challenge is made against a decision to award a public contract within the applicable standstill period (and the contracting authority is made aware of that claim), s.101 of the Procurement Act says that the contracting authority is automatically suspended from entering into the relevant contract until resolution of the claim. 

This automatic suspension is only lifted through an order of the court following a legal application by the contracting authority to lift the suspension. 

Lifting the automatic suspension: the previous position 

Under the Public Contracts Regulations 2015, the courts applied the American Cyanamid test when deciding whether to lift an automatic suspension. An essential aspect of that test was whether damages would be an adequate remedy for the claimant (i.e., in substitution of being awarded the relevant contract).

This meant that suspensions were lifted in a significant majority of reported cases, since damages were often found to be a sufficient remedy for the claimant.

Confirmation of the new test under the Procurement Act 2023

In the recent Parkingeye case, the Court confirmed that the test for lifting the suspension present in s.102 of the Act is different in both method and effect from the previous regime, stating: “the new test is intended to be substantively and not merely formally very different, in both its method and its effect, from the former test”.

In assessing whether to lift the suspension, section 102 requires the court to have regard to three matters: 

1. The public interest, including (among other things) upholding the principle that public contracts should be awarded in accordance with the law and avoiding delay in the supply of goods, services or works.
2. The interests of suppliers, including whether damages are an adequate remedy for the claimant. 
3. Any other matters that the Court considers appropriate.

The role of the public interest

The Judge commented that, in general, the text of the Act showed that the public interest will generally tend to favour maintaining the suspension. The intention behind this is that it ensures public contracts are awarded in accordance with the law and suspensions aren’t lifted too lightly. That said, the Court did note that the facts of each case may weigh public interest differently.

Importantly, the public interest in lifting a suspension focuses on the provision of services themselves, rather than who provides them.

In practice, this means that a new contract that just delivers minor improvements, efficiencies or better value for money will likely carry limited weight. Where services are already being provided under an existing contract, this may weigh in favour of maintaining the suspension, since there remains continuity of services.

In the Parkingeye case, the car park management services were already being delivered by the incumbent provider and weren’t considered to be materially less beneficial than those under the proposed new contract. This supported the decision to maintain the suspension, pending resolution of the challenge.

The role of damages under the new test 

In so far as the adequacy of damages, it’s now only one of several factors to take into consideration — rather than a ‘hurdle’ that claimants must pass. 

Even where damages are considered to be an adequate remedy — which the Judge did in fact decide was the position in the Parkingeye case — the court will still undertake a broader balancing exercise (including the public interest and other relevant considerations) in determining whether a suspension should be lifted.

Significant impact on public procurement challenges

This is the first time that the Court has applied the new automatic suspension test under the Act. Under the previous regime, contracting authorities could reasonably expect their applications to lift suspensions to succeed due to damages being an adequate remedy for suppliers.

If this new approach is followed more widely, it may have a significant impact on procurement challenges going forward. Contracting authorities will need to be prepared for greater difficulties in lifting suspensions, particularly where incumbent arrangements can continue and new contracts are only delivering marginal benefits. A more exacting, evidence-based approach will be required. 

Also, if more challenges are likely to proceed to full trial without the lifting of the suspension, contracting authorities may need to consider the impact of potential litigation delay and reflect this in their procurement planning and documentation.

We may see a requirement for existing service provisions to continue beyond their intended expiry dates, which may necessitate contract variations and extensions. 

On the plus side, this recalibration of the automatic suspension as a stronger remedy may give suppliers a much-needed tool to better protect their positions earlier in a procurement challenge. 

Overall, it demonstrates that the Procurement Act 2023 is a change from the previous EU-based regime and reminds all practitioners to consider the Act first (as opposed to perceived wisdom or even the guidance) when considering the legal framework that controls public procurement. 

Finally, it’s important to note that the position adopted by the High Court in the Parkingeye case may be subject to further refinement and development, since the judgment refers to the potential for appeal. We’ll report on any future developments as they come to fruition.

Talk to us

If you’re preparing for a tender, involved in a procurement challenge or looking to disapply an automatic suspension, it’s important to understand how the courts may approach automatic suspensions.

Our procurement lawyers advise both contracting authorities and suppliers on public procurement (including public procurement challenges), the Procurement Act 2023 and procurement governance.

Book a meeting with us today to discuss how these changes affect you, as well as how best to prepare for upcoming guidance.

Talk to our procurement solicitors by calling 0333 004 4488, emailing hello@brabners.com or completing our contact form.