Procurement Challenges: High Court reiterates the importance of getting limitation right

A recent High Court decision has reiterated the importance of challenging procurement decisions at the right time: Riverside Truck Rental Limited v Lancashire County Council

26 May 2020

On 6 May 2020, the High Court gave judgment in the case of Riverside Truck Rental Limited v Lancashire County Council [2020] EWHC 1018 (TCC), providing an important reminder of the importance of understanding limitation periods in procurement challenges, and the high hurdle faced by claimants in attempting to seek an extension to those periods.

What were the facts?

Lancashire County Council ('LCC') was seeking to procure cabs and trailers for use in waste processing facilities. The tender documents included a pass/fail condition that the cabins be of ‘standing height’, but with no specific guidance as to what this term meant. On 29 November 2019, LCC informed Riverside that it had failed this criterion and therefore been disqualified from the process. Later, on 10 January 2020, Riverside discovered that - but for its disqualification – it would have submitted the most economically advantageous tender. On 24 and 27 January 2020 (respectively), Riverside issued a Part 7 claim for damages and a judicial review claim challenging LCC’s decision to disqualify it from the competition, together with an application to extend the limitation periods for both claims.

What was the issue?

Normally, the time limit to bring a procurement claim is 30 days from the date the aggrieved party knew or ought to have known that the grounds for action arose, or (in the case of JR) 30 days from the decision being challenged. Riverside argued that the clock started ticking from 10 January 2020 when it discovered the price of the successful tender, and Riverside’s solicitors accepted that they had been mistaken as to the relevant time limits for bringing the JR claim.

What was the Court’s decision?

The Court held that time instead began to run on 29 November 2019 for both of Riverside’s claims, and that both claims were therefore brought out of time.

The Court therefore considered the extent to which it had the power to grant an extension to the relevant limitation periods. In the case of the Part 7 claim, the Court held that it could grant an extension if there were 'good reasons' but that this must be considered 'in light of the policy considerations underlying the strict time limits imposed by the relevant procurement rules'.

However, the Court found that there was no good reason to allow for the extension of the Part 7 claim, and made some interesting remarks in this regard. For example, the Court was prepared to consider the argument that the holiday period could have constituted good reason for delaying the filing if Riverside had issued its claim in the first week of January 2020. The Court did not consider that the fact Riverside was exploring alternatives to litigation was a sufficiently good reason to delay issue of the claim. Ultimately, in this case, it appeared that the primary reasons for Riverside’s failure to issue the claim in time (neither of which constituted sufficiently good reasons to extend time) were:

  • Riverside’s mistaken understanding of the relevant limitation periods (and the Court noted here that LCC had no obligation to correct Riverside’s solicitors as to its mistake); and
  • Riverside’s decision only to commence proceedings when it knew whether or not it would have been the successful tenderer. The basis of the challenge was the disqualification, which Riverside was aware of on 29 November 2019. It was only the potential value of the claim which became clear on 10 January 2020.

For the JR claim, the Court held that it could extend the time limit if there was a reasonable objective excuse for claiming out of time, the Defendant would not be prejudiced by the extension, and/or if public interest required the claim to proceed.

In this case, the Court also held that there was no reasonable objective excuse as to why Riverside brought the JR claim out of time, nor did public interest require the claim to proceed which should normally be particularly compelling. From the facts, Riverside simply appeared to have been mistaken as to the relevant time limits as opposed to having a reasonably objective excuse for its delay.

The Court therefore dismissed both claims. 

What can we take from this?

While each case is treated on its facts, the case reiterates the importance of bidders having a proper understanding of the limitation periods applicable to procurement claims, and – where appropriate - being ready to issue as soon as possible after grounds for a claim have potentially arisen. Claimants relying on the Court’s leniency to extend time in such cases will have a high hurdle to overcome.

How can Burges Salmon help?

If you would like to discuss any of these issues further, please contact Ian Tucker, Laura Wisdom or your usual Burges Salmon contact.

Key contact

Ian Tucker

Ian Tucker Partner

  • Dispute Resolution
  • Transport
  • Procurement and State Aid

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