Dispute-related legal services excluded from the need for tendering

The European Court has upheld the long-standing principle that parties to a dispute should be able to choose their lawyers without having to go through a tender process (or use a framework).

This exception is set out in Regulation 10(1)(d) of the Public Contracts Regulations 2015.

The challenger was arguing that the European directive on which this regulation was based, breached the principle of equal treatment, in terms of creating an unjustified difference in treatment of these services from other services that had to be tendered for.

The European Court said that clients should be able to choose lawyers for dispute resolution based on their abilities, rather than having to follow a strict “most economically advantageous tender” approach. The exception also specifically includes arbitration and, by implication, adjudication.

This contrasts with legal work that is not “dispute-related”, which is subject to the “light-touch regime”. If an organisation subject to the public procurement rules has a legal spend of over £615,278 (excluding VAT), a public procurement tender process is needed to appoint their lawyers. Where this is through a framework agreement (which is likely to include any arrangement under which charging rates and appointment terms are agreed), this is measured over a four-year period.

Even here, though, up to 20% of this “requirement” can be sourced (for example for specialist work) from lawyers that are not on the framework under the “small lots” provisions, as long as the value of each separate appointment does not exceed £65,630 (excluding VAT).

If you are involved in a dispute, it is important to get the right legal advice. The case confirms that your flexibility to appoint the legal advisers of your choosing is not hampered by having to comply with the public procurement rules to appoint those legal advisers.

Further information

For more information, please contact Andrew Millross.

Citations

1. P.M v Ministeraad, Case C-246/18

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