After the first legal judgment related to the Procurement Act 2023 was handed down, Bradley Martin, partner in public procurement at UK and Ireland law firm Browne Jacobson, explains what this means for local authorities.

Since coming into force in February 2025, many legal teams in local authorities have been awaiting a legal challenge to the Procurement Act 2023, which brought sweeping reforms to the way in which public bodies buy works, goods and services.

The first judgment was handed down by the High Court on 1 May, and it signals a potentially significant shift in how courts will decide whether to lift the automatic suspension on a contract award during procurement disputes.

What happened?

Parkingeye Limited v Velindre University NHS Trust & Anor arose after Parkingeye, the incumbent car park management provider, was unsuccessful in a re-procurement exercise for a contract worth between £10m and £20m.

Parkingeye challenged the outcome, raising concerns about how the tender was evaluated and how the contract had been categorised. By issuing its claim during the standstill period – the window after a contract is awarded but before it is signed – an automatic ‘suspension’ kicked in, preventing the NHS Trust from proceeding with the new supplier.

The immediate question for the court was not whether Parkingeye's challenge was valid, but whether the suspension on contract award should be lifted so the trust could press ahead – or kept in place while the full dispute was decided by the court.

What has changed?

Under the previous rules, the Public Contracts Regulations 2015, suspensions were lifted in roughly 75% of cases.

Courts consistently found that a losing bidder could be adequately compensated with money rather than needing to be awarded the contract itself, and that consideration typically overrode everything else.

The judge in Parkingeye confirmed the Procurement Act 2023 changes this approach.

Assessment of damages as an appropriate remedy no longer has the same overriding weight. Courts must now balance the public interest in ensuring contracts are awarded lawfully alongside the interests of the challenger – and the judge noted that the public interest will generally tend in favour of keeping suspensions in place.

The suspension was maintained in this case, as Parkingeye was already providing the services being re-procured.

The judge also gave a useful practical steer: if services are already being provided under an existing contract, a suspension is more likely to be maintained. If services are not yet being provided at all, the suspension is more likely to be lifted.

What does this mean for local authorities if the decision is not appealed?

• Potentially more challenges, harder to shake off: Incumbent suppliers who lose a re-procurement now have greater incentive to bring a legal challenge, knowing the suspension is more likely to be maintained.

• Plan for contract extensions: If a challenge is brought and services are already being provided, councils should prepare to extend the existing contract while the dispute is resolved.

• Get notices right: This case also raised concerns about errors in procurement notices – incorrect values and contract classifications. Mistakes in notices can become the basis for a legal challenge, so accuracy matters.

• Cabinet Office guidance counts: The 48 guidance notes published by the Cabinet Office do not have the force of law, but courts will treat them as persuasive. Procurement teams should treat them as standard reference material.

• More case law is coming: This is only the first judgment under the new Act. Decisions on evaluation standards, direct awards, exclusions and more are still to come.

The bottom line

The Procurement Act 2023 makes it harder for public bodies to award new contracts when a legal challenge is brought and services or works are already being provided.

The cost of getting a procurement wrong – in time, money and management disruption – is higher than it was before. Investing in a rigorous, well-documented procurement process from the outset is the best protection available.