Remedies available under the Procurement Act 2023

As we approach the anticipated new procurement regime in February 2025, it’s important for contracting authorities and bidders to understand the remedies available under the Procurement Act 2023 (the Act).

Here, our public procurement specialists Victoria Trigwell and Samantha Thompson take a look at the remedies set out in the Act and how they differ to those under the existing legislation. 

What’s changed?

In essence, not much. Although some of the language has changed, the basis of the remedies found in the existing regime have been replicated in the Act. 

Nevertheless, it’s important to understand how the available remedies are presented under the Act and how this will impact different parties. 

Automatic suspension — actions for suppliers under the Act

If a supplier wishes to apply for an automatic suspension of a contract, they must bring proceedings and notify the contracting authority during the applicable standstill period. 

This differs to the current time limit which requires suppliers to bring such proceedings before the contract has been entered into. 

Interim remedies — American Cyanamid test replaced under section 102

Section 102 of the Act broadly replicates the equivalent provisions of the existing regulations except that it also allows for an order to suspend a contract modification from being entered into or performed.

It also sets out a new test that the court must apply when determining whether to make an interim order, which will replace the American Cyanamid test that is currently applied. Under the new test, the court must have regard to the public interest — in particular, that contracts should be awarded and modified in accordance with the law and avoiding delay in the supply of the goods, services or works.

The court must also have regard to the interests of suppliers including whether damages are an adequate remedy for the claimant and any other matter that the court considers appropriate. 

Four pre-contractual remedies under section 103

Section 103 sets out the pre-contractual remedies available to economic operators. 

Where the court is satisfied that a contracting authority’s decision or action has breached one of its enforceable duties — and the contract or contract variation (where relevant) has not yet been entered into — the following remedies are available.

1. Set aside — the court can order the setting aside of the decision or action concerned. 
2. Take other action — the court can order the contracting authority to take any action. 
3. Damages — the court can award damages to an economic operator which has suffered loss or damage due to the breach.
4. Any other order — the court can make any other order that is considers appropriate. 

Three post-contractual remedies for economic operators under section 104

Section 104 sets out the post-contractual remedies available to economic operators. 

Where the court is satisfied that a contracting authority’s decision or action has breached one of its enforceable duties — and the contract or contract variation (where relevant) has been entered into — the following remedies are available: 

1. Order to set aside — if the grounds under section 105 are met (see below), the court must make an order to set aside the contract unless there is an overriding public interest in not setting aside the contract.
2. Reduction — this remedy is only available where it’s against public interest to set aside the contract. In which case, the court can order a reduction to the term or scope of the goods, services or works supplied under the contract.
3. Damages — the court can award damages to an economic operator which has suffered loss or damage due to the breach. 

Set aside conditions under section 105

Under section 105 of the Act, the grounds for setting aside a contract (referred to as the ‘set aside conditions’) are met if the court is satisfied that the claimant was denied a proper opportunity to seek a pre-contractual remedy because:

1. a required contract award notice was not published
2. the contract was entered into or modified before the end of any applicable standstill period
3. the contract was entered into or modified during a period of automatic suspension or in breach of a court order
4. in the case of a contract not requiring the mandatory standstill period to be observed, the breach became apparent only on publication of a contract award notice
5. in the case of a contract modification, the breach became apparent only on publication of a contract change notice
6. the breach became apparent only after the contract was entered into or modified.

The set aside order effectively replaces the declaration of ineffectiveness under the current regime and the above conditions are similar to the existing grounds for ineffectiveness. However, it is a wider remedy than the declaration of ineffectiveness with emphasis upon ensuring that a claimant has a remedy in circumstances where it was denied a proper opportunity to seek a pre-contractual remedy.

There is also no requirement for the court to impose a fine on the contracting authority (which is a requirement under the declaration of ineffectiveness remedy in the existing regime). 

Are there any changes to time limits?

A supplier must commence proceedings for an order to set aside a contract before the earlier of: 

1. the end of the 30-day period from when the supplier first knew or ought to have known about the circumstances giving rise to the claim
2. the end of the six-month period from the day that the contract was entered into or modified. 

For other proceedings, there is a 30-day limitation period from the date when the supplier knew or ought to have known about the circumstances giving rise to the claim. 

The court can order an extension of the time limit for bringing a claim, but this can’t extend to commencing proceedings after the six-month period in the case of an order to set aside a contract, nor in any case to extend beyond the period of three months from when the supplier first knew or ought to have known about the circumstances giving rise to the claim. 

While the language in the Act differs slightly, contracting authorities and bidders alike should be familiar with these time limits from the existing regime. 

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Overall, while there is a change in language in relation to the remedies and the tests to be applied by the court and the powers of the court in relation to the remedies are slightly wider, the remedies under the Act remain largely the same as those in the current regime. 

If you have any queries about remedies under the existing or new procurement regimes, please contact a member of our procurement team. 

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