(3 min read)
A recent application to lift an automatic suspension (i.e. the bar on contract signing whilst a procurement decision is formally challenged), ushered in the first judgment to be handed down under the Procurement Act 2023 (PA23). In Parkingeye Ltd v Velindre University NHS Trust, HHJ Keyser KC considered and applied the new test for lifting an automatic suspension under section 102(2) PA23, which replaces the previous test under regulation 96(2) of the Public Contracts Regulations 2015 (PCR 2015) and the application of the American Cyanamid test. The court recognised that consideration of the public interest under the new regime will generally favour maintaining the automatic suspension, which is a significant departure from the previous position under PCR 2015. This is a landmark decision for bidders and contracting authorities alike, as it suggests that the new test will be more bidder-friendly, which may influence procurement strategy and lead to more attempt by bidders to hold onto the suspension.
The remedies available under PA23 have come under judicial scrutiny for the first time since the PA23 came into force on 24 February 2025 in the context of an application to lift the automatic suspension, by which a contracting authority is subject to the bar on contract signing when proceedings to challenge a contract award are issued by a bidder.
HHJ Keyser KC’s judgment in Parkingeye Ltd v Velindre University NHS Trust, handed down on 1 May 2026, was the first application of the new test for applications by a contracting authority to lift an automatic suspension under section 102(2) PA23.
Under the PCR 2015, the courts consider applications to lift the automatic suspension against the American Cyanamid test, the first limb of which requires consideration as to whether damages would be an adequate remedy for the claimant if the suspension were lifted. In his judgment, HHJ Keyser KC noted that contracting authorities were successful in approximately two-thirds of all applications to lift the automatic suspension when the American Cyanamid test was applied under PCR 2015. In our experience, applications to lift have under previous case law been found heavily in favour of contracting authorities, given the primacy of the question of the adequacy of damages test for a challenging bidder.
The new test for lifting an automatic suspension
Section 102(2) PA23 specifies the factors that the court must take into account in making its decision, including:
- The public interest in the principle that public contracts should be awarded in accordance with the law, and avoiding delay in the supply of goods/services;
- The interests of suppliers, including whether damages are an adequate remedy for the claimant; and
- Any other matters the court considers appropriate.
HHJ Keyser KC noted the significance of public interest being promoted to the first consideration in assessing the application to lift the suspension under PA23, whereas it was previously considered only after assessing whether damages were an adequate remedy for the claimant. This is a key change and may result in a significant shift in whether courts decide to maintain the automatic suspension.
Importantly, HHJ Keyser KC said that the elevation of the public interest part of the test will “generally tend in favour of keeping the suspension in place”. This is however a first instance decision (which could therefore be subject to appeal), and other courts may adopt a different approach in consideration of the PA23, but it is significant in that it is the first indication we have had as to how courts may interpret the new rules.
HHJ Keyser KC concluded that the weight afforded to each factor is to be assessed on every case’s specific facts, but that a decision to lift automatic suspension would generally require “the presence of either a very persuasive countervailing public interest or some overriding matter of private interest”. This suggests a much higher bar for contracting authorities to meet in succeeding in an application to lift an automatic suspension.
Key takeaways
Contracting authorities may face increased difficulty when seeking to lift the automatic suspension on awarding a contract, which is a significant shift from the previous approach.
In our view, both bidders and contracting authorities alike ought to consider this case carefully, as well as the approach that other courts take in interpreting the new rules. If the approach taken here is followed, bidders may be able to exert greater pressure on contracting authorities where there are live or contemplated proceedings by maintaining the automatic suspension.
Going forwards, we anticipate that there may be an increase in the number of challenges brought under the PA23 given the more bidder friendly approach under PA23.
There are references in the judgment to the contracting authority making an application to appeal, it will be very interesting to see whether the Court of Appeal follows the first instance decision, and whether any further guidance is given as to how the new rules should be applied. Watch this space!
