First Procurement Act 2023 case signals automatic suspension test shift

The case arose from an application by Velindre University NHS Trust and Cardiff and Vale University Health Board (CVUHB) under section 102(2) of the Procurement Act 2023 (PA23) to lift an automatic suspension preventing the award of a public contract for car park management services. 

The automatic suspension was triggered by a claim issued by Parkingeye Limited, the incumbent provider of car park management services at various hospital sites operated by CVUHB. The claimant challenged the award decision made on 19 January 2026 in favour of a different service provider during the statutory ‘standstill’ period.

The case, which was heard in the High Court in Wales, is the first case under PA2023, which came into force in February 2025. The new legislation introduced a “procurement specific” test for the purposes of deciding how interim applications, including applications for the lifting of an automatic suspension, should be determined. Under the previous Public Contracts Regulations 2015 (PCR15) such applications were decided by reference to the so-called ‘American Cyanamid’ test, dating back to 1975, which was not specifically designed for public procurement challenges.     

Up until now it was not clear how the new PA23 test would operate, but the judgment handed down on 1 May clarifies that it in fact operates very differently to the previous regime. The court concluded that PA23 marks a shift away from the primacy of the ‘adequacy of damages’ test applicable in the American Cyanamid case and that this factor alone should no longer outweigh the public interest in resolving a procurement award dispute before the contract is signed.

In his judgment, Mr Justice Keyser concluded that “the statutory suspension and the new test for applications to lift the suspension are clearly intended to ensure that proper weight is given to the public interest in ensuring that public contracts are awarded in accordance with the law and that, accordingly, the courts do not too lightly lift suspensions”.

Totis Kotsonis, public procurement expert at Pinsent Masons, said the decision is likely to reverse the balance of power in many applications to lift the automatic suspension, representing a significant change to the default position that was previously in operation under PCR15. “Under the previous rules, it was extremely difficult for challengers to resist such applications, to the point where in recent years it was unusual for the court to maintain the suspension,” he said.

“In this judgment, the judge's interpretation of the new test under the Procurement Act 2023 is that 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. This is a substantial shift."

In addition, the judge highlighted that the public interest argument for “avoiding delay in the supply of the goods, services or works provided for in the contract or modification, including in defence or security interests or the continuing provision of public services” may only be engaged in serious and maybe exceptional cases.

Kotsonis said the case would be extremely relevant to all public bodies that conduct regulated procurement and any private sector companies that participate in public procurement competitions. “No doubt the judgment will be welcome by suppliers participating in public procurements as it means that making a formal challenge at the conclusion of the process is more likely to preserve the supplier's opportunity to be awarded the contract,” he said.

While Kotsonis said the judgment would technically not be binding on other High Court judges, he said it would certainly be unusual for another High Court judge to depart from the decision. “It remains to be seen if the second automatic suspension case under the Procurement Act follows this approach in whole or in part or even dispenses with it entirely, but this judgment certainly has the first-mover advantage in deciding the rules for these types of applications," he said.

“It is worth noting that the contracting authorities are seeking permission to appeal the judgment to the Court of Appeal. If permission is granted, it will be interesting and indeed important to see whether the Court of Appeal will agree with the High Court’s analysis and conclusions”.

Although the introduction of PA23 intended to simplify and streamline the procurement regulatory framework to help mitigate delays, Kotsonis says there is still much-needed reform to improve the overall judicial process for procurement challenges. “We are still left with a situation where challenges are taking years not months to progress through the courts,” he said. “A procurement-specific tribunal would potentially be one way to address this issue."