Interpretation of Part 9
45.—(1)
In this Part, except where the context otherwise requires—
“claim form” includes, in Northern Ireland, the originating process by
which the proceedings are commenced;
“contract”, includes a framework agreement which the utility—
(a) purports to have entered into, or to be intending to enter into, in
accordance with these Regulations; and
(b) has relied on, is relying on, or intends to rely on, for the
purposes of regulation 17(1)(i) (award, without a call for competition,
of contracts under a framework agreement);
“declaration of ineffectiveness” means a declaration made under
regulation 45J(2)(a) or 45O(3);
“economic operator” has the extended meaning given to it by regulation
45B(3);
“grounds for ineffectiveness” has the meaning given to it by regulation
45K;
“proceedings” means court proceedings taken for the purposes of
regulation 45C; and
“standstill period”, and references to its end, have the same meaning
as in regulation 33A.
(2) In this Part, except in regulation 45D(2), any reference to a
period of time, however expressed, is to be interpreted subject to the
requirement that, if the period would otherwise have ended on a day
which is not a working day, the period is to end at the end of the next
working day.
Duty owed to economic operators
45A.—(1)
This regulation applies to the obligation on a utility to comply with—
(a) the provisions of these Regulations, other than regulations 30(9)
and 38; and
(b) any enforceable Community obligation in respect of a contract or
design contest (other than one excluded from the application of these
Regulations by regulation 6, 7, 8, 9, 11 or 34).
(2) That obligation is a duty owed to an economic operator.
Duty
owed to GPA economic operators
45B.—(1)
Subject to paragraphs (2) and (3), the duty owed to an economic
operator in accordance with regulation 45A is a duty owed also to a GPA
economic operator.
(2) The duty is not owed in relation to—
(a) a Part B services contract; or
(b) a contract for research and development services specified in
category 8 of Part A of Schedule 3.
(3) References to an “economic operator” in this Part, except in
regulation 45A or in relation to the duty owed in accordance with that
regulation, also include a GPA economic operator.
(4) In this regulation—
“GPA economic operator” means a person from a GPA State who sought, who
seeks, or would have wished, to be the person to whom the contract is
awarded;
“GPA State” means any country, other than a relevant State, which at
the relevant time is a signatory to the GPA and has agreed with the
European Community that the GPA shall apply to a contract of the type
to be awarded; and
“relevant time” means—
(a) if the utility selects economic operators to tender for or to
negotiate the contract in accordance with a qualification system
established in accordance with regulation 25, the date on which the
selection commences;
(b) if the utility satisfies the requirement that there be a call for
competition by indicating the intention to award the contract in a
periodic indicative notice in accordance with regulation 16(2)(a)(i),
the date on which the notice is sent to the Official Journal; or
(c) in any other case, the date on which the utility sent a contract
notice or design contest notice to the Official Journal or would have
done so if the requirement that there be a call for competition applied
and the utility decided to satisfy that requirement by sending such a
notice.
Enforcement
of duties through the Court
45C.—(1)
A breach of the duty owed in accordance with regulation 45A or 45B is
actionable by any economic operator which, in consequence, suffers, or
risks suffering, loss or damage.
(2) Proceedings for that purpose must be started in the High Court, and
regulations 45D to 45P apply to such proceedings.
General
time limits for starting proceedings
45D.—(1)
This regulation limits the time within which proceedings may be started
where the proceedings do not seek a declaration of ineffectiveness.
(2) Subject to paragraphs (3) and (4), such proceedings must be started
promptly and in any event within 3 months beginning with the date when
grounds for starting the proceedings first arose.
(3) Paragraph (2) does not require proceedings to be started before the
end of any of the following periods—
(a) where the proceedings relate to a decision which is sent to the
economic operator by facsimile or electronic means, 10 days beginning
with—
(i) the day after the date on which the decision is sent, if the
decision is accompanied by a summary of the reasons for the decision;
(ii) if the decision is not so accompanied, the day after the date on
which the economic operator is informed of a summary of those reasons;
(b) where the proceedings relate to a decision which is sent to the
economic operator by other means, whichever of the following periods
ends first—
(i) 15 days beginning with—
(aa) the day after the date on which the decision is sent, if the
decision is accompanied by a summary of the reasons for the decision; or
(bb) if the decision is not so accompanied, the day after the date on
which the economic operator is informed of a summary of those reasons;
(ii) 10 days beginning with—
(aa) the day after the date on which the decision is received, if the
decision is accompanied by a summary of the reasons for the decision; or
(bb) if the decision is not so accompanied, the day after the date on
which the economic operator is informed of a summary of those reasons;
(c) where sub-paragraphs (a) and (b) do not apply but the decision is
published, 10 days beginning with the day on which the decision is
published.
(4) The Court may extend the time limits imposed by this regulation
(but not the limits imposed by regulation 45E) where the Court
considers that there is a good reason for doing so.
(5) For the purposes of this regulation, proceedings are to be regarded
as started only when the claim form is served in compliance with
regulation 45F(1).
Special
time limits for seeking a declaration of ineffectiveness
45E.—(1)
This regulation limits the time within which proceedings may be started
where the proceedings seek a declaration of ineffectiveness.
(2) Such proceedings must be started—
(a) where paragraph (3) or (5) applies, within 30 days beginning with
the relevant date mentioned in that paragraph;
(b) in any other case, within 6 months beginning with the day after the
date on which the contract was entered into.
(3) This paragraph applies where a relevant contract award notice has
been published in the Official Journal, in which case the relevant date
is the day after the date on which the notice was published.
(4) For that purpose, a contract award notice is relevant if, and only
if—
(a) the contract was awarded without prior publication of a contract
notice; and
(b) the contract award notice includes justification of the decision of
the utility to award the contract without prior publication of a
contract notice.
(5) This paragraph applies where the utility has informed the economic
operator of—
(a) the conclusion of the contract; and
(b) a summary of the relevant reasons, in which case the relevant date
is the day after the date on which the economic operator was informed
of the conclusion or, if later, was informed of a summary of the
relevant reasons.
(6) In paragraph (5), “the relevant reasons” means the reasons which
the economic operator would have been entitled to receive in response
to a request under regulation 33(9).
(7) In this regulation, “contract award notice” means a notice in
accordance with regulation 32(1).
(8) For the purposes of this regulation, proceedings are to be regarded
as started only when the claim form is served in compliance with
regulation 45F(1).
Starting
proceedings
45F.—(1)
Where proceedings are to be started, the economic operator must, after
filing
the claim form, serve it on the utility.
(2) Paragraph (3) applies where proceedings are started—
(a) seeking a declaration of ineffectiveness; or
(b) alleging a breach of regulation 33A, 45G or 45H(1)(b) where the
contract has not been fully performed.
(3) In those circumstances, the economic operator must, as soon as
practicable, send a copy of the claim form to each person, other than
the utility, who is a party to the contract in question.
(4) The utility must, as soon as practicable, comply with any request
from the economic operator for any information that the economic
operator may reasonably require for the purpose of complying with
paragraph (3).
(5) In this regulation, “serve” means serve in accordance with rules of
court, and for the purposes of this regulation a claim form is deemed
to be served on the day on which it is deemed by rules of court to be
served.
Contract-making
suspended by challenge to award decision
45G.—(1)
Where—
(a) proceedings are started in respect of a utility’s decision to award
the contract; and
(b) the contract has not been entered into, the starting of the
proceedings requires the utility to refrain from entering into the
contract.
(2) The requirement continues until any of the following occurs—
(a) the Court brings the requirement to an end by interim order under
regulation 45H(1)(a);
(b) the proceedings at first instance are determined, discontinued or
otherwise disposed of and no order has been made continuing the
requirement (for example in connection with an appeal or the
possibility of an appeal).
(3) For the purposes of paragraph (1), proceedings are to be regarded
as started only when the claim form is served in compliance with
regulation 45F(1).
(4) This regulation does not affect the obligations imposed by
regulation 33A.
Interim
orders
45H.—(1)
In proceedings, the Court may, where relevant, make an interim order—
(a) bringing to an end the requirement imposed by regulation 45G(1);
(b) restoring or modifying that requirement;
(c) suspending the procedure leading to—
(i) the award of the contract; or
(ii) the determination of the design contest,
in relation to which the breach of the duty owed in accordance with
regulation 45A or 45B is alleged;
(d) suspending the implementation of any decision or action taken by
the utility in the course of following such a procedure.
(2) When deciding whether to make an order under paragraph (1)(a)—
(a) the Court must consider whether, if regulation 45G(1) were not
applicable, it would be appropriate to make an interim order requiring
the utility to refrain from entering into the contract; and
(b) only if the Court considers that it would not be appropriate to
make such an interim order may it make an order under paragraph (1)(a).
(3) If the Court considers that it would not be appropriate to make an
interim order of the kind mentioned in paragraph (2)(a) in the absence
of undertakings or conditions, it may require or impose such
undertakings or conditions in relation to the requirement in regulation
45G(1).
(4) The Court may not make an order under paragraph (1)(a) or (b) or
(3) before the end of the standstill period.
(5) This regulation does not prejudice any other powers of the Court.
Remedies where the contract
has not been entered into
45I.—(1)
This regulation applies where—
(a) the Court is satisfied that a decision or action taken by a utility
was in breach of the duty owed in accordance with regulation 45A or
45B; and
(b) the contract has not yet been entered into.
(2) In those circumstances, the Court may do one or more of the
following—
(a) order the setting aside of the decision or action concerned;
(b) order the utility to amend any document;
(c) award damages to an economic operator which has suffered loss or
damage as a consequence of the breach.
(3) Where the Court is satisfied that an economic operator would have
had a real chance of being awarded the contract if that chance had not
been affected by the breach mentioned in paragraph (1)(a), the economic
operator is entitled to damages amounting to its costs in preparing its
tender and in participating in the procedure leading to the award of
the contract.
(4) Paragraph (3)—
(a) does not affect a claim by an economic operator that it has
suffered other loss or damage or that it is entitled to relief other
than damages; and
(b) is without prejudice to the matters on which an economic operator
may be required to satisfy the Court in respect of any such other claim.
(5) This regulation does not prejudice any other powers of the Court.
Remedies
where the contract has been entered into
45J.—(1)
Paragraph (2) applies if—
(a) the Court is satisfied that a decision or action taken by a utility
was in breach of the duty owed in accordance with regulation 45A or
45B; and
(b) the contract has already been entered into.
(2) In those circumstances, the Court—
(a) must, if it is satisfied that any of the grounds for
ineffectiveness applies, make a declaration of ineffectiveness in
respect of the contract unless regulation 45L requires the Court not to
do so;
(b) must, where required by regulation 45N, impose penalties in
accordance with that regulation;
(c) may award damages to an economic operator which has suffered loss
or damage as a consequence of the breach, regardless of whether the
Court also acts as described in sub-paragraphs (a) and (b);
(d) must not order any other remedies.
(3) Paragraph (2)(d) is subject to regulation 45O(3) and (9)
(additional relief in respect of specific contracts where a framework
agreement is ineffective) and does not prejudice any power of the Court
under regulation 45M(3) or 45N(10) (orders which supplement a
declaration of ineffectiveness or a contract-shortening order).
(4) Regulation 45I(3) and (4) (entitlement to tendering costs etc. as
damages for loss of a real chance of being awarded the contract) apply
for the purposes of this paragraph.
Grounds
for ineffectiveness
45K.—(1)
There are three grounds for ineffectiveness.
The first ground
(2) Subject to paragraph (3), the first ground applies where the
contract has been awarded without prior publication of a notice in the
Official Journal in any case in which these Regulations required the
prior publication of such a notice.
(3) The first ground does not apply if all the following apply—
(a) the utility considered the award of the contract without prior
publication of such a notice to be permitted by these Regulations;
(b) the utility has had published in the Official Journal a voluntary
transparency notice expressing its intention to enter into the
contract; and
(c) the contract has not been entered into before the end of a period
of at least 10 days beginning with the day after the date on which the
voluntary transparency notice was published in the Official Journal.
(4) In paragraph (3), “voluntary transparency notice” means a notice—
(a) which contains the following information—
(i) the name and contact details of the utility;
(ii) a description of the object of the contract;
(iii) a justification of the decision of the utility to award the
contract without prior publication of a notice in the Official Journal;
(iv) the name and contact details of the economic operator to be
awarded the contract; and
(v) where appropriate, any other information which the utility
considers it useful to include; and
(b) which, if Commission Regulation (EC) No 1564/2005 as amended from
time to time sets out a form to be used for the purposes of paragraph
(3), is in that form.
The second ground
(5) The second ground applies where all the following apply—
(a) the contract has been entered into in breach of any requirement
imposed by—
(i) regulation 33A (the standstill period);
(ii) regulation 45G (contract-making suspended by challenge to award);
or
(iii) regulation 45H(1)(b) (interim order restoring or modifying a
suspension originally imposed by regulation 45G);
(b) there has also been a breach of the duty owed to the economic
operator in accordance with regulation 45A or 45B in respect of
obligations other than those imposed by regulation 33A (the standstill
period) and this Part;
(c) the breach mentioned in sub-paragraph (a) has deprived the economic
operator of the possibility of starting proceedings in respect of the
breach mentioned in subparagraph (b), or pursuing them to a proper
conclusion, before the contract was entered into; and
(d) the breach mentioned in sub-paragraph (b) has affected the chances
of the economic operator obtaining the contract.
The third ground
(6) Subject to paragraph (7), the third ground applies where all the
following apply—
(a) the contract was awarded under a dynamic purchasing system;
(b) the contract was awarded in breach of any requirement imposed by
regulation 19(11) to (14) (award of contracts under dynamic purchasing
systems); and
(c) the estimated value of the contract exceeds the relevant threshold
for the purposes of regulation 11.
(7) The third ground does not apply if all the following apply—
(a) the utility considered the award of the contract to be in
accordance with regulation 19(11) to (14);
(b) the utility has, despite regulation 33(7), voluntarily complied
with the requirements set out in regulation 33(1) to (2A); and
(c) the contract has not been entered into before the end of the
standstill period.
General
interest grounds for not making a declaration of ineffectiveness
45L.—(1)
Where the Court is satisfied that any of the grounds for
ineffectiveness applies,
the Court must not make a declaration of ineffectiveness if—
(a) the utility or another party to the proceedings raises an issue
under this regulation;
and
(b) the Court is satisfied that overriding reasons relating to a
general interest require that the effects of the contract should be
maintained.
(2) For that purpose, economic interests in the effectiveness of the
contract may be considered as overriding reasons only if in exceptional
circumstances ineffectiveness would lead to disproportionate
consequences.
(3) However, economic interests directly linked to the contract cannot
constitute overriding reasons relating to a general interest.
(4) For that purpose, economic interests directly linked to the
contract include—
(a) the costs resulting from the delay in the execution of the contract;
(b) the costs resulting from the commencement of a new procurement
procedure;
(c) the costs resulting from change of the economic operator performing
the contract; and
(d) the costs of legal obligations resulting from the ineffectiveness.
(5) For the purposes of paragraph (1)(b), overriding reasons may be
taken to require that the effects of the contract should be maintained
even if they do not require the Court to refrain from shortening the
duration of the contract by an order under regulation 45N(3)(a).
The
consequences of ineffectiveness
45M.—(1)
Where a declaration of ineffectiveness is made, the contract is to be
considered to be prospectively, but not retrospectively, ineffective as
from the time when the declaration is made and, accordingly, those
obligations under the contract which at that time have yet to be
performed are not to be performed.
(2) Paragraph (1) does not prevent the exercise of any power under
which the orders or decisions of the Court may be stayed, but at the
end of any period during which a declaration of ineffectiveness is
stayed, the contract is then to be considered to have been ineffective
as from the time when the declaration had been made.
(3) When making a declaration of ineffectiveness, or at any time after
doing so, the Court may make any order that it thinks appropriate for
addressing—
(a) the implications of paragraph (1) or (2) for the particular
circumstances of the case;
(b) any consequential matters arising from the ineffectiveness.
(4) Such an order may, for example, address issues of restitution and
compensation as between those parties to the contract who are parties
to the proceedings so as to achieve an outcome which the Court
considers to be just in all the circumstances.
(5) Paragraph (6) applies where the parties to the contract have, at
any time before the declaration of ineffectiveness is made, agreed by
contract any provisions for the purpose of regulating their mutual
rights and obligations in the event of such a declaration being made.
(6) In those circumstances, the Court must not exercise its power to
make an order under paragraph (3) in any way which is inconsistent with
those provisions, unless and to the extent that the Court considers
that those provisions are incompatible with the requirement in
paragraph (1) or (2).
Penalties
in addition to, or instead of, ineffectiveness
45N.—(1)
Where the Court makes a declaration of ineffectiveness, it must also
order that the utility pay a civil financial penalty of the amount
specified in the order.
(2) Paragraph (3) applies where—
(a) in proceedings for a declaration of ineffectiveness, the Court is
satisfied that any of the grounds for ineffectiveness applies but does
not make a declaration of ineffectiveness because regulation 45L
requires it not to do so; or
(b) in any proceedings, the Court is satisfied that the contract has
been entered into in breach of any requirement imposed by regulation
33A, 45G or 45H(1)(b), and does not make a declaration of
ineffectiveness (whether because none was sought or because the Court
is not satisfied that any of the grounds for ineffectiveness applies).
(3) In those circumstances, the Court must order at least one, and may
order both, of the following penalties—
(a) that the duration of the contract be shortened to the extent
specified in the order;
(b) that the utility pay a civil financial penalty of the amount
specified in the order.
(4) When the Court is considering what order to make under paragraph
(1) or (3), the overriding consideration is that the penalties must be
effective, proportionate and dissuasive.
(5) In determining the appropriate order, the Court must take account
of all the relevant factors, including—
(a) the seriousness of the relevant breach of the duty owed in
accordance with regulation 45A or 45B;
(b) the behaviour of the utility;
(c) where the order is to be made under paragraph (3), the extent to
which the contract remains in force.
(6) Where more than one economic operator starts proceedings in
relation to the same contract, paragraph (4) applies to the totality of
penalties imposed in respect of the contract. Civil financial penalties
(7) Where a utility is ordered by the High Court of England and Wales
to pay a civil financial penalty under this regulation—
(a) the Court’s order must state that the penalty is payable to the
Treasury;
(b) the Court must send a copy of the order to the Office of Government
Commerce;
(c) the utility must pay the penalty to the Treasury through the Office
of Government Commerce; and
(d) the Treasury must, when they receive the penalty, pay it into the
Consolidated Fund.
(8) Where a utility is ordered by the High Court of Northern Ireland to
pay a civil financial penalty under this regulation—
(a) the Court’s order must state that the penalty is payable to the
Department of Finance and Personnel;
(b) the Court must send a copy of the order to the Department;
(c) the utility must pay the penalty to the Department; and
(d) the Department must, when it receives the penalty, pay it into the
Consolidated Fund of Northern Ireland.
(9) Where a utility is a non-Crown body—
(a) any payment due under paragraph (7) may be enforced by the Treasury
as a judgment debt due to them; and
(b) any payment due under paragraph (8) may be enforced by the
Department of Finance and Personnel as a judgment debt due to it.
Contract shortening
(10) When making an order under paragraph (3)(a), or at any time after
doing so, the Court may make any order that it thinks appropriate for
addressing the consequences of the shortening of the duration of the
contract.
(11) Such an order may, for example, address issues of restitution and
compensation as between those parties to the contract who are parties
to the proceedings so as to achieve an outcome which the Court
considers to be just in all the circumstances.
(12) Paragraph (13) applies where the parties to the contract have, at
any time before the order under paragraph 3(a) is made, agreed by
contract any provisions for the purpose of regulating their mutual
rights and obligations in the event of such an order being made.
(13) In those circumstances, the Court must not exercise its power to
make an order under paragraph (10) in any way which is inconsistent
with those provisions, unless and to the extent that the Court
considers that those provisions are incompatible with the primary order
that is being made, or has been made, under paragraph (3)(a).
(14) In paragraph (3)(a), “duration of the contract” refers only to its
prospective duration as from the time when the Court makes the order.
Ineffectiveness
etc. in relation to specific contracts under a framework agreement
45O.—(1)
In this regulation, “specific contract” means a contract which—
(a) was awarded under a framework agreement;
(b) was awarded without a call for competition in reliance on
regulation 17(1)(i) (framework concluded in accordance with these
Regulations); and
(c) was entered into before a declaration of ineffectiveness (if any)
was made in respect of the framework agreement.
(2) A specific contract is not to be considered to be ineffective
merely because a declaration of ineffectiveness has been made in
respect of the framework agreement.
(3) Where a declaration of ineffectiveness has been made in respect of
the framework agreement, the Court must, subject to paragraph (5), make
a separate declaration of ineffectiveness in respect of each relevant
specific contract.
(4) For that purpose, a specific contract is relevant only if a claim
for a declaration of ineffectiveness in respect of that specific
contract has been made—
(a) within the time limits mentioned in regulation 45E as applicable to
the circumstances of the specific contract;
(b) regardless of whether the claim was made at the same time as any
claim for a declaration of ineffectiveness in respect of the framework
agreement.
(5) Regulation 45L (general interest grounds for not making a
declaration of ineffectiveness) applies for the purposes of paragraph
(3), insofar as the overriding reasons relate specifically to the
circumstances of the specific contract.
(6) This regulation does not prejudice the making of a declaration of
ineffectiveness in relation to a specific contract in accordance with
other provisions of these Regulations on the basis of the second ground
of ineffectiveness set out in regulation 45K(5), where—
(a) the relevant breach of the kind mentioned in regulation 45K(5)(a)
is entering into the specific contract in breach of regulation 45G or
45H(1)(b); and
(b) the relevant breach of the kind mentioned in regulation 45K(5)(b)
relates specifically to the award of the specific contract and the
procedure relating to that award, rather than to the award of the
framework agreement and the procedure relating to it.
(7) A declaration of ineffectiveness must not be made in respect of a
specific contract otherwise than in accordance with paragraph (3) or on
the basis mentioned in paragraph (6).
(8) Where a declaration of ineffectiveness is made in respect of a
specific contract in accordance with
paragraph (3)—
(a) regulation 45M (the consequences of ineffectiveness) applies;
(b) regulation 45N(1) (requirement to impose a civil financial penalty)
does not apply.
(9) Where the Court refrains, by virtue of paragraph (5), from making a
declaration of ineffectiveness which would otherwise have been required
by paragraph (3), the Court must, subject to paragraph (10), order that
the duration of the specific contract be shortened to the extent
specified in the order.
(10) The extent by which the duration of the specific contract is to be
shortened under paragraph (9) is the maximum extent, if any, which the
Court considers to be possible having regard to what is required by the
overriding reasons mentioned in paragraph (5).
(11) In paragraphs (9) and (10), “duration of the specific contract”
refers only to its prospective duration as from the time when the Court
makes the order.
Injunctions
against the Crown
45P.
In proceedings against the Crown, the Court has power to grant an
injunction despite section 21 of the Crown Proceedings Act 1947(a)