Procurement in a Nutshell Procurement Act 2023 Guidance: Limitation
14th November, 2024
This Nutshell supplements our previous publication on Remedies under the Procurement Act, by introducing the limitation periods introduced by the Act.
For previous article on remedies click here, to look at the referenced guidance please click here.
Introduction
The Procurement Act 2023 is expected to come into force on 24th February 2025.
The Act will, in particular, revoke the following:
- Public Contracts Regulations 2015 (PCR)
- Concession Contracts Regulations 2016
- Utilities Contracts Regulations 2016
Limitation period
Section 106(2) provides that a supplier must commence proceedings (i.e. complete and file the Claim Form at court) before the end of the period of 30 days beginning with the day on which the supplier first knew, or ought to have known, about the relevant circumstances giving rise to the claim (‘30 day period’).
This means that the 30 day period would commence when the supplier is provided with or has access to information that enables it to identify a breach. The guidance stresses that the onus is on the supplier to review the information in a timely manner to ensure that it can commence proceedings within the relevant timescales.
Contracting authorities should note that the 30 day period does not apply to proceedings seeking set aside.
The Court can extend the 30 day period to 3 months from the same date if it considers there to be good reason for doing so (as set out in Section 106(3)).
Limitation period for ‘set aside’ proceedings
In accordance with Section 106(1), any specified set-aside proceedings must be commenced before the earlier of
- The end of the 30 day period beginning with the day on which the supplier first knew, or ought to have known, about the circumstances giving rise to the claim;
- The end of the period six months beginning with the day the contract was entered into or modified.
If the earlier of the two dates is (1), the Court may extend the limitation period but only to the period referred to in (2). However, Section 106(4)(b) does impose a longstop on the limitation period to 3 months beginning with the day upon which the supplier first knew, or ought to have known, about the circumstances giving rise to the claim “in any case”.
How the Civil Procedure Rules apply
After the court has issued a Claim Form, the Civil Procedure Rules (CPRs) will apply. The CPRs require the claimant (the supplier) to serve the Claim Form on the contracting authority within 4 months of the date the claim form is issued.
Under Section 101, if a supplier seeks to invoke the automatic suspension, it must (during the standstill period) commence proceedings and notify the contracting authority that it has done so. However, while the guidance states that it is anticipated that a claimant will serve the Claim Form on the contracting authority at the same time as notifying it of the commencement of proceedings, this is not strictly required.
Where the Claim Form has not been served during the standstill period, in order to avoid waiting the full 4 months, contracting authorities can serve a notice on the claimant requiring the claimant to serve the Claim Form within a set deadline (which must be at least 14 days after service of the notice) or discontinue the claim.
While the Claim Form is often served along with the Particulars of Claim, this is not mandatory and the Particulars of Claim may be marked as ‘to follow’. If this is the case, the claimant will have an additional 14 days to serve the Particulars of Claim on the contracting authority following service of the Claim Form.
What does this mean?
The Act affords the claimant greater flexibility when commencing proceedings under the Act. The emphasis is on the defendant contracting authority to force service of the Claim Form in order to apply pressure on the claimant and process the initial stages of the litigation.
Ultimately, if the contracting authority does not act swiftly, the commencement of proceedings could result in significant delay/disruption to the procurement process.
For further information please contact Melanie Pears or Tim Care in our Public Sector Team
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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