A key feature of procurement litigation, should a bidder decide to issue proceedings challenging a contract award, is to suspend the procurement process until such time as the court lifts the suspension. When deciding whether to lift the suspension, the court’s approach prior to the Procurement Act 2023 (the Act), under the EU-derived regulations and the American Cyanamid test, was to approach it principally from an adequacy of damages perspective. If the Authority was able to show that the bidder would be adequately compensated by damages, should the suspension be lifted and the bidder succeed at trial, then the court would likely order the suspension to be lifted. As the loss of a commercial contract can, in most cases, be compensated for by a damages award this meant that suspensions were routinely lifted, and unsuccessful challengers left to pursue damages.
The Act establishes a different test for the lifting of the suspension but it was not entirely clear how that test operated. In Parkingeye Limited v Velindre University NHS Trust & Anor [2026] EWHC 1019 (TCC), the Court (HHJ Keyser KC) charted how the new test works in practice, drawing a clear line between the current regime and the one it replaced. The decision makes clear that, under the Act, the public interest in ensuring lawful contract awards will often justify maintaining the automatic suspension until trial. This is a significant departure from the previous position and the weight given to the adequacy of damages test.
Standstill and automatic suspension: what has changed?
The Act came into force in February 2025, governing all new public procurement in England, Wales and Northern Ireland under a single regime.[1] Once a contract is awarded, the contracting authority must observe a standstill period of eight working days before entering into the contract, not dissimilar to the ten-day period under the old regime. Direct award contracts under section 41 – such as those procured in cases of extreme urgency – are exempt.
In addition, the rules on “automatic suspension” have also changed: under the legacy regulations, suspension arose where a claim challenging a contract award was issued before the contract had been entered into, and the authority had been notified. Under section 101(1) of the Act, suspension only applies where proceedings are issued during the standstill period and the authority is notified accordingly.. That suspension holds unless and until a court orders otherwise under section 102.
The new test
Under the legacy regime, the courts applied the American Cyanamid test in applications to lift an automatic suspension. Importantly, this meant that an application to lift would succeed if the Authority could demonstrate that damages would be an adequate remedy in the event the court found a breach of regulatory duties owed to the putative supplier. Under the Act, section 102(2) provides a new statutory test which an Authority must meet in order to lift an automatic suspension, under which the courts must have regard to three specific matters:
- the public interest in both upholding lawful procurement and avoiding delay in the supply of goods or services;
- the interests of suppliers, including whether damages would be an adequate remedy for the claimant; and
- any other factors the court considers appropriate.
Whilst the Act’s explanatory note had always confirmed that this test replaced the previous common law test, it was unclear in practice what that change would mean. That question has finally been answered – for now, at least.
Facts/Background
Parkingeye, the claimant, was the incumbent provider of car park management services for Cardiff and Vale University Health Board (Cardiff & Vale), operating across five NHS sites in Wales. A procurement was conducted by the defendants, Velindre University NHS Trust (Velindre), on behalf of Cardiff & Vale, with all five suppliers who submitted bids passing the initial evaluation stage. After technical and commercial evaluation, NPCG achieved the highest overall score of 84%, compared to Parkingeye’s 68%.
In December 2025, Parkingeye was notified it had been unsuccessful. It issued proceedings in January 2026 during the standstill period, triggering automatic suspension under the Act.
Ground of challenge
Parkingeye’s grounds of challenge were wide-ranging. It alleged that:
- the £100,000 contract value was grossly misstated – it only represented expected income to Cardiff & Vale. The true value to the winning bidder was at least £10m, possibly over £20m;
- the contract should have been classified as a concession contract under section 8 of the Act;
- the procurement process lacked proper individual evaluation – evaluators assessed bids collectively at a single meeting, producing notes that were largely identical, and bidders were assessed against unclear or undisclosed criteria. Accordingly, like-for-like comparisons were impossible.
Notably, Parkingeye claimed no damages, instead seeking performance of the contract itself.
Velindre applied under section 102(2) of the Act to lift the automatic suspension so that the contract could be concluded with NPCG. The court refused to lift the suspension, finding nothing in the facts sufficient to outweigh the public interest to which the suspension was intended to give effect.
The Court’s interpretation of the statutory test
HHJ Keyser KC set out key principles for how courts should approach applications to lift automatic suspensions under the Act:
- It is a balancing exercise – the court must weigh the public interest against the interests of suppliers – including the claimant – together with any other factors it considers relevant in each case. HHJ Keyser KC summarised: “The test requires the court to balance the public interest and the interests of suppliers, including the claimant, along with any other matters the court thinks appropriate” (at [36(1)]);
- Damages matter less than they used to – whether damages would adequately compensate the claimant remains a relevant consideration, but it no longer carries the significance it did under the American Cyanamid framework. As the Court noted: “the adequacy of damages for the claimant, though still a relevant matter, no longer has the significance it had under the American Cyanamid test” (at [36(3)(i)]);
- The default position favours keeping the suspension in place – The Court held that “the new test recognises the public interest that, where the lawfulness of a proposed contract award is in dispute, the contract should not be awarded until the dispute has been resolved” (at [36(3)(ii)]);
- The bar for lifting is high – in practice, “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” (at [36(4)]); and
- The Court still has the flexibility to provide for undertakings and conditions in any order. As HHJ Keyser KC noted: “In deciding where the balance lies in a particular case, the court will also be mindful of its power to provide for undertakings or conditions in any order that it makes” (at [36(5)]).
Application
Public interest generally favours maintaining suspension
The Court held that section 102(2)(a)(i) directs attention to public interest in preventing a contract from being awarded until its lawfulness has been resolved – it reflects the importance of facilitating lawful awards, not remedies after unlawful ones (as would have been the result if the American Cyanamid approach still applied). Importantly, HHJ Keyser KC observed that the possible award of damages for an unlawful procurement diverts public funds from their intended purpose and imposes a double financial burden on the relevant authority.
The claimed benefits of the new contract were weak
Section 102(2)(a)(ii) is concerned with situations in which the provision of public services is delayed or interrupted. This was not the case here – the Court did accept a public interest in achieving enhanced benefits under the new contract, but found it carried very limited weight given that (i) car parking services would continue to be provided during the suspension, and (ii) the benefits of the new contract were modest, and partly already available under the existing contract.
Supplier interests favoured lifting, but insufficiently
The Court noted that Parkingeye’s loss was ultimately commercial and compensable in principle: their difficulties in quantifying loss were not sufficient to render damages inadequate, and their assertions of reputational harm fell well short of the evidential threshold required. While any delay would prejudice the successful bidder, that consequence was inherent in the statutory scheme and did not in these circumstances carry decisive weight.
Conclusion
The Court held that the new test is clearly intended to ensure proper weight is given to the public interest not solely in the award of public contracts, but their lawful award. Accordingly, the courts should not lift suspensions lightly. HHJ Keyser KC found nothing in the facts sufficient to outweigh that public interest and refused the applications to lift the suspension.
What Parkingeye means in practice
For suppliers
The decision indicates a more claimant‑friendly approach under the new regime. Adequacy of damages is no longer determinative, but one factor within a broader, multi‑factorial assessment. Suppliers bringing a challenge are therefore not required to establish conclusively that damages would be inadequate in order to resist a lifting application.
The court also recognised that the public interest in ensuring lawful contract awards may weigh in favour of maintaining the suspension pending trial. That said, the judgment suggests that litigation strategy will be subject to close scrutiny. In particular, the deliberate omission of a damages claim to support an argument on inadequacy is unlikely to carry weight and may be viewed unfavourably: the court noted that “[t]he argument that damages cannot be an adequate remedy because they are not claimed savours of pulling oneself up by one’s own bootstraps” (at [70]). Arguments based on difficulties of quantification must be substantiated by genuinely acute evidential issues, and reliance on reputational harm will require a clear and credible evidential basis.
For contracting authorities
The threshold for lifting an automatic suspension appears materially higher than under the previous regime. Contracting authorities should not assume that a suspension will be readily discharged solely on the basis that any claim for breach of statutory duties to a bidder could be satisfied in damages.
Assertions as to the benefits of signing a new contract will need to be both credible and significant to influence the balance of considerations under s.102(2). Incremental or marginal service improvements, particularly where incumbent arrangements remain in place, are unlikely to be sufficient. The court’s treatment of section 102(2) suggests that it is concerned with avoiding serious disruption to public services, rather than endorsing a contracting authority’s preference for a particular supplier.
More broadly, the decision underscores the importance of procurement discipline at the outset. Clear audit trails, well‑structured evaluation methodologies, and transparent decision‑making processes remain critical in mitigating the risk of challenge during the standstill period and avoiding the operational consequences of an automatic suspension.
What next?
The judgment is likely to be seen as an important early indication of the court’s approach under the Act, and reflects a shift from the position under the previous regime.
If maintained, the Court’s approach has the potential to influence future applications to lift automatic suspensions: it would not be surprising to see these issues considered further at appellate level, whether in this case or in subsequent proceedings. In particular, the sufficiency of damages within the section 102 framework, and the scope of any public interest considerations favouring the maintenance of a suspension, are likely to require further judicial clarification.
For now, Parkingeye should be viewed as an early step in the development of case law under the new regime. Both suppliers and contracting authorities should expect continued evolution in this area and will need to monitor subsequent decisions closely as the courts refine the application of the statutory test.
With thanks to Rachel Savin for her help in drafting this article.
For further information, please contact:
Jeremy Sharman, Partner, Bird & Bird
jeremy.sharman@twobirds.com
[1] The Procurement Act 2023: A short guide for suppliers (HTML) – GOV.UK
