Procurement Act 2023: Lifting the Automatic Suspension

Why should I read this?

1 May 2026 saw the first judgment in an application to lift the automatic suspension under the Procurement Act 2023 (“the Act”) in which HHJ Keyser KC dismissed the contracting authorities’ application in Parkingeye Ltd v Velindre University NHS Trust [2026] EWHC 1019.

In reaching its decision, the Court applied for the very first time the new test found in section 102(2) of the Act.

Below, we provide more detail on the decision, and discuss the implications of the judgment on both contracting authorities and economic operators.

What should I do?

Contracting authorities and economic operators should be mindful of the new test which will be applied by the courts when considering applications to lift.

Both contracting authorities and economic operators should be aware that, under the new test, the adequacy of damages for the claimant no longer has the significance it had under the American Cyanamid test. The lifting of the suspension will generally require the presence of either a very persuasive countervailing public interest or some overriding matter of private interest.

Contracting authorities should have regard to their continuing duties under the Act given that, where the lawfulness of a proposed contract award is in dispute, the contract should not be awarded until the dispute has been resolved.

Background

When determining applications to lift the automatic suspension involving procurements run under the Act, courts are now required to apply the new test laid down in section 102(2) of the Act, which provides that the court must have regard to:

• the public interest in, among other things:-
  • upholding the principle that public contracts should be awarded, and contracts should be modified in accordance with the law;
  • avoiding delay in the supply of goods, services or works provided for in the contract or modification;

• the interests of suppliers, including whether damages are an adequate remedy for the claimant;
• any other matters that the court considers appropriate.

This is different to the position under the Public Contract Regulations 2015 (“PCR”) which required the court to apply the following test¹ when deciding whether to lift the automatic suspension:

• Is there a serious issue to be tried?
• Would damages be an adequate remedy for the claimant if the suspension were lifted and the claim later succeeded?
• Would damages be an adequate remedy for the contracting authority if the suspension remained in place and the claim was unsuccessful? Public interest factors were often influential here.
• Where does the balance of convenience lie? Public interest considerations (continuity of services, urgency, value for money) often tipped the balance in favour of lifting the suspension.

Under the PCR, the Courts very rarely found in favour of claimants when applying the test. The question of whether damages were an adequate remedy for the claimant was regularly the determining factor, with the Courts finding, more often than not, that in commercial procurement processes where the claimant sought to make a profit from the award of a contract, damages would be adequate.

The Decision

In considering an application to lift under the Act, the Judge held that the wording of section 102(2) requires the court to have regard to the matters mentioned in paragraphs (a) to (c) when considering whether to make an order lifting the suspension. As such, under the new test, both the public interest and the interests of suppliers (including the claimant) are mandatory considerations. The court considered that the balance between these two considerations to be at the “heart of the new test”. The weight given to each of the matters will be for the court to decide on the facts of each case.

Following a review of the Act and its underlying guidance documents, the Judge concluded that the test in the Act is intended to be substantively very different in both its method and its effect, from the previous test under the PCR.

In so far as the adequacy of damages, it is now one of several factors to take into consideration and is not determinative of the application if damages are an adequate remedy.

Regarding public interest, this must now always be considered by the court (i.e. it does not fall away if damages are an adequate remedy). In explaining how the court should consider this part of the test, the Judge stated “[t]o put the matter very shortly, the text seems to me to show that the public interest will generally tend in favour of keeping the suspension in place, although on the facts of particular cases it may weigh differently.”

Delay to the provision of Services

The Judge drew a distinction between delay which involves public services not being provided, to situations where the delay caused by the automatic suspension results in a continuation of services while other potential benefits from a new provider are delayed.

The Judge held that the primary focus of section 102(2)(a)(ii) is concerned with the kind of situation in which the provision of public services is delayed or interrupted.

If needed, contract extensions could be granted to the incumbent to cover the period of the challenge litigation, which the Judge considered would not give rise to a cause of action to challenge the contract extension.

Comment

This is the first time that the new automatic suspension test under the Act has been applied by the Court, and it has taken a significantly different approach to how this matter would likely have been determined under the PCR. 
Contracting authorities were able to take comfort under the previous regime that, more often than not, an application to lift the suspension would be successful. Claimants often struggled to demonstrate that damages would not be an adequate remedy, and even where they could the Courts often held that the balance of convenience lay with lifting the suspension.

This decision, if adopted more widely by the Courts, will likely have a significant impact on procurement challenges going forward. We may start to see fewer applications being brought by contracting authorities and more matters proceedings to full trial.

As set out in the case of American Cyanamid Co v Ethicon Ltd [1975] AC 396.