Non-bidding Parties have No Standing to Bring Procurement Challenges

A recent High Court decision has clarified the requirements for a claimant to have standing under the Concession Contracts Regulations 2016 (the “CCR” 2016), which may come as a surprise to subcontractors or related group parties who are, following this decision, no longer able to bring procurement challenges.

In September 2020, the Gambling Commission’s competition for the fourth National Lottery licence resulted in long-standing licence holder Camelot losing to Czech-owned company, Allwyn. Following this result, Camelot and its key subcontractor, the IGT Group, commenced proceedings against the Gambling Commission on the basis that they had breached the CCR 2016. In an interesting turn of events, Camelot was bought by Allwyn, leaving only the IGT Group to continue their damages-only claim, said to be in excess of £100 million. Despite their sub-contractor role, IGT asserted an entitlement to sue as the CCR 2016 permitted any “economic operator” to make a claim where a breach of the CCR 2016 had occurred.

The question of whether a subcontractor and therefore a non-bidder, could proceed with a claim even if the Gambling Commission had breached terms of the CCR 2016 was determined on 28^th July 2023, following a trial of preliminary issues on standing. The decision was based substantially on the interpretation of the CCR 2016.

The Gambling Commission and interested party, Allwyn, believed that the CCR 2016 should be read consistently with the UK’s obligations in accordance with the EU law regime from which they had derived. Furthermore, the UK had gone no further than the requirements of EU law when implementing the CCR 2016 into domestic law. Consequently, the CCR 2016 provided no legal right to subcontractors to bring proceedings.

IGT, however, believed the UK had gone beyond the requirements of EU law and that ‘economic operators’ referred to in the CCR 2016, and to whom a duty was owed, was to be interpreted to include all claimants, regardless of whether they were bidders or non-bidders.

On consideration of the differing interpretations, Coulson LJ held that a purposive approach should be taken when interpreting the CCR 2016. In the Judgement, it was stated that if “economic operator” was to be read as catching all those who offer the provision of services on the market, it would be a major expansion of the pool of those able to make a procurement challenge and would have a nonsensical result. It was therefore held that IGT did not have the necessary standing to bring their claim.

Non-bidding parties reliant on employment from legal entities entering into procurement contracts should be aware that they will not be afforded the same rights under the CCR 2016 as their subcontracting party.

This is a key decision which changes the position about sub-contractors being able to bring a procurement challenge and one which will impact the future of procurement litigation.

If you would like any further information or advice on these issues, please contact Lucy Clarke from the Litigation and Dispute Resolution team.

*This information is for guidance purposes only and does not constitute, nor should be regarded, as a substitute for taking legal advice that is tailored to your circumstances.