On 28 January, the European Court of Justice (ECJ) handed down its judgment inUniplex (UK) Ltd (Uniplex) v NHS Business Services Authority (NHS) (C-406/08). The ECJ ruled the long established principle that public procurement proceedings must be commenced 'promptly' is contrary to European Community law and so effectively have re-written UK procurement legislation.
The Facts
A tendering procedure was carried out by the NHS in order to establish a framework agreement for the supply of haemostats. Uniplex were unsuccessful and on 28 January 2008 (after a debriefing) sent a letter before action to the NHS alleging various breaches of the public procurement rules. In a letter sent on 13 February the NHS denied the various allegations.
On 12 March Uniplex commenced proceedings, which was some four months after the NHS initially notified Uniplex that it had decided to conclude the framework with three bidders but not Uniplex.
The Issue
Uniplex and the NHS disagreed on the proper interpretation of the limitation period stated in Regulation 47(7)(b) of the Public Contracts Regulations 2006 (Regulations), namely that proceedings must be brought promptly and in any event within three months from the date when grounds for bringing the proceedings first arose (unless the court considers that there is good reason for extending the period).
The High Court was also unsure and it referred the matter to the ECJ, asking:
- Whether the limitation period runs (a) from the date of the alleged breach, or (b) from the date when the aggrieved bidder knew or ought to have know of the breach; and
- How it is to apply any requirement for proceedings to be brought promptly, in particular whether proceedings should be dismissed if not raised promptly, irrespective of whether or not the three months rule has been satisfied.
The Judgment
To ensure there is effective review, the ECJ said limitation periods for actions under the Regulations may not start to run until such time as the claimant knew or ought to have known of the alleged breach of procurement law. The ECJ also clarified a concerned bidder can only come to an informed view as to whether there has been an infringement after it has been informed of the reasons for its elimination.
The ECJ also referred to the need for legal certainty. National limitation periods must not make it uncertain, impossible or excessively difficult to exercise any rights stemming from EC law, such as a right to effective review. So, the ECJ found that EC law prevents a national court dismissing proceedings simply as a result of those proceedings not being brought promptly, because bidders aggrieved by the outcome of a public procurement otherwise would not get a sufficiently clear and precise opportunity to ascertain their rights and obligations.
Separately, if a national court is unable to interpret Regulation 47(7)(b) in such a way to ensure that the period begins to run from the date the applicant knew or ought to have known of the breach, then the court cannot apply those provisions.
Conclusion
Regulation 47(7)(b) is also reflected in the Public Contracts (Scotland) Regulations 2006, and still applies following implementation of the new Remedies Directive in Scotland, when an aggrieved bidder wishes to raise legal proceedings seeking interim orders and/or damages.
Uniplex offers valuable guidance to our courts in interpreting one of the limitation periods for the new and extended procurement remedies, but it is no less important for aggrieved bidders to act quickly if they want to ascertain and preserve their rights in procurement without them being time-barred.
MacRoberts have considerable expertise in dealing with public procurement challenges for both the public and the private sectors.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
