UK: Procurement Challenges - When Is The Requirement To Give A Contracting Authority Prior Notice Of Proceedings Satisfied?

Last Updated: 12 February 2014
Article by Ailsa Ritchie and Graeme Young

There has been a steady stream of decisions emanating from the Court of Session on procurement challenges in the last couple of years, one of which was the application by the Scottish Ministers to have the automatic suspension of the award of the contract for the Northern Isles ferry service lifted1. Following the successful lifting of the automatic suspension, the Scottish Ministers proceeded to award the contract to the successful bidder (Serco) and the aggrieved bidder (Shetland Line) is proceeding with an action for damages. The most recent instalment of this case has provided an interesting perspective on the requirement of an aggrieved bidder to give prior notice to a contracting authority of its intention to bring proceedings.

The Regulations

The Public Contracts (Scotland) Regulations place a requirement on an economic operator to provide notice to a contracting authority prior to bringing proceedings. The second judgment in the Shetland Line case2 provides some guidance as to when the notice requirement will be considered to have been met. At the time of the procurement, the previous Public Contracts (Scotland) Regulations 2006 were in force although the principles of the case could equally apply in terms of contracts procured under the current Regulations. At the time of the procurement Regulation 47(6)(a) (ii) was worded:

"47(6) Proceedings under this Part shall not be brought unless:

(a) the economic operator bringing the proceedings has informed the contracting authority..of

(i) the breach or apprehended breach of the duty owed to it in accordance with paragraph (1) or (2); and

(ii) its intention to bring proceedings under this part in respect of that breach or apprehended breach".

The Timeline

On Friday 4 May 2012, the Scottish Ministers issued their contract award decision and informed Shetland Line (the incumbent provider) that their tender to operate the Northern isles ferry service had been unsuccessful. The letter indicated that the standstill period would run from 5 May until 14 May inclusive. Shetland Line responded by email on Friday 4 May stating that it was "deeply disappointed and exceedingly frustrated" at the outcome of the procurement process.

Monday 7 May was a bank holiday. On Tuesday 8 May, Shetland Line instructed their solicitors and on Wednesday 9 May they instructed counsel, held a telephone conference call and instructed counsel to draft a summons, if he thought it was appropriate. On Friday 11 May, Shetland Line's solicitors emailed a letter to Scottish Ministers intimating that they had breached the 2006 Regulations and requesting a formal undertaking that the Scottish Ministers would not enter into the proposed contract with Serco without giving Shetland Line at least 7 days' notice of their intention to do so. They stated that if the undertaking was not given by 2.30pm that day, they intended to "take immediate court action".

The Scottish Ministers responded by email at 2.17 pm on Friday 11 May that they would not award the proposed contract to Serco until 18 May; that they would provide a substantive response to the matters raised in the letter; and they proposed a meeting to resolve matters for Tuesday 15 May. They closed by stating "Please confirm by return that your client is content to proceed on this basis and that proceedings will not be issued before we meet".

Shetland Line sent a further email to Scottish Ministers at 3.37pm stating that given the potential time bar issues they would serve a summons that afternoon, which they duly did.

Had the notice requirement been met?

Lord Woolman determined that it had. By issuing their decision letter immediately prior to a bank holiday weekend, the Scottish Ministers created a very tight timeline. The already short standstill period was shortened even further, giving Shetland Line only 4 working days to consider its position. The Scottish Ministers knew or ought to have known that if Shetland Line were to give notice, then only bare notice would be provided – this was a direct consequence of the Scottish Minister's decision to commence the standstill period when they did.

In Lord Woolman's view, the first email on Friday 11 May was sufficient to constitute notice. It was clear from this notice that if the specified undertaking was not granted, that action would follow. The undertaking given by Scottish Ministers to Shetland Line was not the undertaking which was sought.


In Scotland, the requirement to give prior notice of proceedings is mandatory. As confirmed by Lord Woolman, the question as to whether or not the requirement to provide prior notice of intention to raise proceedings for a procurement challenge has been met, will depend upon the facts of the case.

These may include factors such as the complexity of the procurement – in this case, the contract was being procured through Competitive Dialogue and Lord Woolman noted that a substantial quantity of documentation would have to have been reviewed by counsel in order that an informed view was reached within the standstill period (which was shortened in practice as a direct result of the contracting authority's decision to issue the award decision on a bank holiday weekend). Another relevant factor will be whether the aggrieved bidder could potentially face time bar through delaying raising proceedings as the courts will be reluctant to leave a bidder without an effective remedy.

It is interesting to contrast this with the position in England, Wales and Northern Ireland where the mandatory requirement to give notice of proceedings was removed when the 2007 Remedies Directive was being implemented. The reasoning being a recognition of the practical difficulties to fulfilling the requirement within the limited standstill period provided for.


1 Shetland Line (1984) Limited against Scottish Ministers [2012] CSOH 99

2 Shetland Line (1984) Limited against The Scottish Ministers [2014 ] CSOH 12

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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