In good standing? Who can bring a claim for judicial review of a procurement process?

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We look at the case of Wylde and others v Waverley Borough Council where an unsuccessful attempt was made to challenge (by way of judicial review) a procurement process by claimants who were not themselves tenderers or suppliers in the market.

Where an over threshold public contract is concerned, The Public Contracts Regulations 2015 (and their 2006 predecessors) set out a prescribed statutory framework for bidders and other “economic operators” in the market to challenge a breach of the procurement rules. This involves the sending of Award Decision Notices by the authority, the holding of a standstill period prior to entering into the contract, and the ability of the claimant to apply to suspend the contract award process by making a claim in the High Court during the standstill period (or indeed to claim after the expiry of the standstill period, usually seeking an award of damages or a declaration of ineffectiveness).

What happens, though, where a claimant finds itself sitting outside of this statutory framework and wishes to challenge a procurement decision in court? Perhaps the claimant is not itself a tenderer in the procurement or does not fall within the definition of “economic operator” and there it has no right to use the statutory framework to bring a claim?

In this situation a claimant may fall back on a judicial review, or “JR”, claim. As the name suggests, this a claim to have the decision of a public body reviewed by the courts. It is often used in the procurement context where the claimant is not a tenderer nor a supplier more generally and therefore is unable to use the statutory route to a public procurement claim. An example could be the end-users of a particular health service claiming that the reorganisation of health services in a particular area has not been done lawfully by the authority concerned. However, bringing a JR claim is not always possible, due to the requirement for the claimant to demonstrate to the satisfaction of the Court that it has “sufficient standing” to claim.

In the case of Wylde and others v Waverley Borough Council (2017) the court was asked to consider whether the council's decision to enter into a development agreement to develop a town centre was judicially reviewable or not. The judgment provides an interesting reminder of the issues a court will look at to establish whether the claimant has “sufficient standing” and as such will be of particular interest if bringing (or defending) a procurement challenge outside of the usual mechanism provided in the procurement regulations.

The council had run a competitive process to appoint a development partner and entered into a contract in 2003 for the work. This was a conditional contract, with the “viability condition” being (put simply) that the scheme to be implemented had to be guaranteed a minimum level of profit. It proved difficult for the parties to meet this viability condition and, in May 2016, the parties agreed to vary the condition and make it less onerous, so that the contract could become unconditional. In November 2016, following the start of this claim for judicial review, the council published a voluntary ex ante transparency notice (VEAT notice) to give notice of the variation; no responses to the notice were received from any supplier in the market.

This claim was actually brought by five claimants, none of whom was a developer who had, for example, lost out in the procurement process. Rather, the claimants were all local tax payers and some were members of local civic societies aimed at preserving the town, who objected to the development scheme. The claimants claimed that the variation to the development agreement in May 2016 was in fact an illegal variation which amounted to a wholly new contract, requiring a wholly new competition to be run.

The immediate issue for the court, therefore, was whether this group was able to demonstrate “sufficient interest” in the development to warrant it having the necessary standing to bring a claim.

The claimants argued, following the Gottlieb case, that as tax payers to the council, this indeed gave them “sufficient interest” in the scheme in order for them to claim. The council and the developer counter-argued, following the Chandler case, that, even had a new competition been run as the claimants argued it should have been, this would not have affected the claimants since they were not tenderers and because the development, which the claimants opposed, would still have gone ahead (just maybe with a different developer).

The court agreed with the council and the developer and found that the claimants had insufficient interest in the development agreement to have the necessary standing to bring the JR claim. First of all they could not show that a new process would have produced a different outcome (and indeed the lack of interest in the VEAT notice tended to show that the outcome of a new process would have been unchanged). But further, even if a new process were run and the outcome different, since the claimants were not themselves tenderers nor connected to one, their interests were not affected.

The case shows some of the hurdles non-tenderer claimants attempting to use the JR route have to get over to succeed. Had the claimants here been, for example, the end users of a health service that was being tendered, it is possible that they may have found it easier to demonstrate that their interests would have been affected by the running of a new procurement and the appointment of a different service provider, and thereby they might have been able to establish standing to bring the claim.
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