To lift or not to lift: Two new English court judgments provide further insight into when the automatic suspension will or won’t be lifted in procurement challenges

The High Court in England has recently issued two decisions where it has considered whether to lift the automatic suspension on entering into a contract that is the subject of a procurement challenge.

Regulation 95 of the Public Contracts Regulations 2015 (the “2015 Regulations”) provided that a contracting authority was prohibited from entering into a contract where a claim form had been issued in relation to the decision to award the contract, and the contracting authority was aware of the claim form, until that prohibition was lifted by the Court or the challenge was concluded. Substantively the same provision is made by section 101 of the Procurement Act 2023 which replaced the 2015 Regulations in relation to any procurement commenced on or after 24 February 2025. Under both sets of rules this prohibition is known as the “automatic suspension”.

The contracting authority defending the challenge may apply to the Court to lift the automatic suspension. When considering such an application under the 2015 Regulations, the Courts consider the well-established American Cyanamid test which consists of the following questions:

i) Is there a serious issue to be tried?

ii) If so, would damages be an adequate remedy for the claimant(s) if the suspension was lifted and they then succeeded at trial? (and is it just in all the circumstances that the claimant(s) should be confined to a remedy of damages?)

iii) If not, would damages be an adequate remedy for the contracting authority if the suspension remained in place and it succeeded at trial?

iv) Where there is doubt as to the adequacy of damages for either of the parties, which course of action is likely to carry the least risk of injustice if it transpires that it was wrong; that is, where does the balance of convenience lie?

Involve Visual Collaboration Ltd v Secretary of State for Work and Pensions

Involve Visual Collaboration Ltd (“Involve”) were the incumbent supplier of audio-visual services to the Department of Work and Pensions (“DWP”) and were excluded from the most recent tender for those services on the basis that their bid was deemed to be non-compliant. DWP considered that Involve had failed to achieve the minimum score required for one of the technical questions. Involve was originally awarded a score of 7 for this question but this was lowered to 1 after re-moderation. Involve raised an action against DWP and DWP applied for the court to lift the automatic suspension.

Applying the American Cyanamid test, Mr Justice Waksman found the following:

1. DWP agreed that there was a serious issue to be tried;

2. A damages remedy would not be sufficient for Involve in this case – Involve being deprived of the new contract would expose it to serious losses of opportunity to develop its business in specific ways. Involve provided evidence that the contract would be the largest video platform contract across the public sector in the UK and that the new system developed by Involve to service this new contract came at a considerable cost and contained a significant amount of valuable intellectual property.

3. Damages would not be an adequate remedy for DWP, and Involve accepted this;

4. A trial could be scheduled for as early as January 2026 (that is, within three months) even without expedition. DWP’s argument that this would prejudice it was not accepted by the Court which found that DWP had delayed in applying for the lift of the automatic suspension; and

5. The claimant had agreed to an extension of the previous contract so that DWP could continue to use the audio-visual facilities it needed in the meantime.

Therefore the balance of convenience was “firmly in favour of Involve” and the application to lift was dismissed.

International SOS Assistance UK v Secretary of State for Defence

International SOS Assistance UK Limited (“International”) was the incumbent provider to the Ministry of Defence (“MoD”) for global medical support to the UK armed forces. The new contract was awarded to Healix International (“Healix”). International claimed that the MoD’s tender process did not comply with the 2015 Regulations (in particular on the basis that it alleged the ITT was misleading as to how much work the contract involved and on the basis that Healix’s bid was, partly as a result, abnormally low) and issued proceedings.

The MoD applied to lift the automatic suspension. It accepted that there was a serious issue to be tried but denied any breach of the Regulations. Therefore the issue before the Court was whether damages would be an adequate remedy for International should the suspension be lifted but International then succeeded at trial, and where they balance of convenience lay between the parties.

Mr Justice Eyre found the following:

1. The existing agreement International had with the MoD accounted for only 3.6% of its UK revenue and there was no evidence that losing this contract would have a knock-on effect on other similar contracts;

2. There was no real prospect of the Court upholding the claim but then finding the breach(es) to be insufficiently serious to warrant damages (an argument which has become increasingly relevant in automatic suspension cases as we previously explored here);

3. Delay would see the MoD lose the opportunity to introduce improvements to service delivery, a loss for which damages would not be an adequate remedy;

4. The absence of a cross-undertaking in damages was no concern of the Court in the absence of an application by Healix; and

5. The balance of convenience favoured the MoD because the contract is one of only two contracts which the Defence Medical Services classify as being a “UK StratCom Key Contract”. The Court considered the MoD’s 2025 Strategic Defence Review which placed an emphasis on moving to “warfighting readiness”. It was found that the public benefits of the contract and ensuring that these were realised before any future conflict outweighed the claimant’s concerns that there was a risk that Healix could not carry out the contract adequately.

Therefore in this case the application to lift the automatic suspension was granted.

It is worth noting one line in the judgment which could easily be missed – the judge observed that “In the particular circumstances of this case the just balance between the parties requires that if the suspension is lifted the Defendant be required to accept that it cannot pursue [the] argument [that the breach was not sufficiently serious to warrant damages].”

Conclusion

These two cases serve as a reminder that whether an application to lift the automatic suspension will be granted or not is very much dependent on the circumstances of each party and contract in each case. Although courts tend to grant applications to lift (one piece of research suggested the “lift” rate is as high as 75%), the Involve case shows that this is not always the case, and that any application to lift should be made as early on in the action as possible.

Each of these cases concern actions relating to legacy procurements under the 2015 Regulations. The Procurement Act 2023 came into force on 24 February 2025 and provides that automatic suspension will be applied where a party issues proceedings during the standstill period under section 101. Section 102(2) sets out the test that the courts are required to follow when considering whether to grant an order to lift automatic suspension under the Procurement Act 2023. It remains to be seen whether there will be any differences in practice in how the new test is applied.

If you have a concern about a public procurement process or would otherwise like to discuss how this may affect your organisation, please contact Jamie Dunne, Charles Livingstone or your usual Brodies contact.