New test under Procurement Act 2023 - Lifting the Automatic Suspension

Parkingeye Limited v Velindre University NHS Trust & Anor [2026] EWHC 1019 (TCC)

Contracting authorities will find it harder to succeed in applications to lift automatic suspensions under the Procurement Act 2023, as a result of this High Court judgment.

The judgment represents a resetting of the balance between suppliers and contracting authorities in procurement challenges:

• It is a welcome development for suppliers. Crucially, it strengthens their ability to preserve the prospect of winning the contract itself rather than being forced into a claim for damages only. This is usually the key objective for suppliers.

• Contracting authorities making an application to lift the suspension will need to provide compelling evidence of genuine public harm, rather than relying on lost efficiencies or preferred contractual terms.

The court refused to lift the suspension, and its reasoning indicates that applications to lift will now be harder than under the old regime, where applications succeeded more often than not.

It remains to be seen whether the court will take the same approach consistently in future and what direction other developing case law on the Procurement Act 2023 will take.  

 

The court confirmed the Procurement Act establishes a new test

The judgment confirmed that section 102(2) of the Act establishes a new, procurement-specific test that is “substantively and not merely formally very different” from the old test applied under the Public Contracts Regulations 2015.

The judge summarised the key elements of the new test as follows:

• The court must balance the public interest and the interests of suppliers, including the claimant, along with any other matters the court thinks appropriate. The court must decide the weight given to each factor based on the circumstances of the case before it.
• The adequacy of damages for the claimant. This is, now, just one matter the court must consider, not – as previously – the gateway question that often proved fatal to a supplier’s case.
• The new test recognises the public interest that, where the lawfulness of a proposed contract award is in dispute, the contract should not be awarded until the dispute has been resolved.
• The public interest in lifting the suspension will generally be about the interest in the continuing provision of goods and services, not merely the authority’s preference of provider or the detailed contract terms of the provision.

The judge concluded that, although there is no statutory presumption: “the lifting of the suspension will generally require, on the particular facts of the case, the presence of either a very persuasive countervailing public interest or some overriding matter of private interest.”

 

Facts behind this judgment

Velindre University NHS Trust and Cardiff and Vale University Health Board conducted a procurement for car park management services across five NHS sites in Wales. They decided to award the contract to National Parking Control Group Limited displacing the incumbent provider, Parkingeye Limited. Parkingeye challenged the award decision during the statutory standstill period, triggering the automatic suspension under section 101(1) of the Procurement Act 2023, and the Applicants applied under section 102(2) to lift that suspension.

Parkingeye’s substantive challenge alleged that:

• The wrong contracting authority had been named in the tender notice.
• The estimated contract value was misstated (GBP100,000 instead of at least GBP10 million).
• The contract should have been classified as a concession contract.
• Mandatory conditions of participation were not properly applied.
• The evaluation methodology was flawed and inconsistent.

 

Why did the court maintain the suspension?

In deciding to maintain the suspension, the court’s reasoning on the key elements included the following:

 

How was public interest taken into account?

• The key factor was that this was not a case where vital interests (such as defence or security) were engaged or in which the continued supply of public services was under threat. Car parking services would continue under the existing contract. This was not a case where there was going to be an interruption of public services.
• The claimed benefits of the new contract (manned helpdesk, improved permit systems, revenue-sharing) were described by the court as “very modest”. Parkingeye offered to provide equivalent improvements under an extension to the current contract, and some benefits were already provided for under the existing contract but never insisted on by the authority.

 

How were suppliers’ interests’ taken into account?

• When considering whether damages were inadequate as a remedy, the court dismissed Parkingeye’s claims that there would be difficulties in quantifying loss and reputational damage.
• The court dismissed the argument that damages were inadequate because they had not been claimed. Parkingeye said damages had not been claimed because its interest was in providing the services under the new contract. What matters is “the court’s assessment of the claimant’s genuine interests, not the fortuity or tactics of a pleading”.
• The court found that damages were an adequate remedy for Parkingeye, but this did not lead to a lifting of the suspension.

 

What other matters are relevant?

• Although the court cast doubt on some elements of the claim, this did not deter it from maintaining the suspension.

 

What this judgment means for suppliers

If this case is followed, it should be easier for suppliers to maintain the automatic suspension now than it was under the old regime, which may lead to suppliers challenging more procurement decisions.

The new test from the Act removes the adequacy of damages as a gateway hurdle and places more emphasis on the public interest in lawful contract award. Key lessons:

• The suspension now carries significantly more weight. To succeed in lifting the suspension, a contracting authority will need to demonstrate either a very persuasive public interest or an overriding private interest.
• Damages are still relevant, but not determinative. Suppliers should still expect the Court to consider adequacy of damages, but this is no longer the gateway hurdle before the court considers other factors.
• Reputational damage is still hard to establish. Cogent evidence is required that the contract is of “particular prestige”.
• Offer practical undertakings. If suppliers can provide interim arrangements that match any benefits under the new contract this can undermine the case for lifting the suspension.
• Offer a cross-undertaking in damages. This was a factor the court considered and is still a key requirement.

 

What this judgment means for contracting authorities

Contracting authorities will find it harder to lift automatic suspensions. Key lessons:

• “Very modest” benefits won’t be enough. Asserting that the new contract will deliver improvements is not enough. The court will scrutinise whether those benefits are genuinely significant and whether they can be achieved by other means during the suspension.
• Focus on genuine service interruption. The examples given in the new statutory test of public interests (defence or security interests or the continuing provision of public services) indicates that these are intended to represent “serious and maybe exceptional cases.” The primary focus is to “the substantial deprivation of services”.
• Damages arguments have lost their punch. The court is less likely to lift the suspension simply because damages could compensate the supplier.
• Beware the double-payment risk. The risk of having to pay a supplier under the new contract while also compensating an unsuccessful bidder in damages is a factor weighing against lifting the suspension.