On 1 May 2026, the High Court handed down the first ruling under the Procurement Act 2023 (PA23) which came into force in February 2025. In ParkingEye Limited v Velindre University NHS Trust & Anor [2026] EWHC 1019 (TCC), the court rejected the contracting authorities’ applications to lift the automatic suspension, preventing the contract from being entered into with the successful bidder until the outcome of the substantive claim is decided. The decision provides a significant insight on how the courts may approach automatic suspension applications under the PA23, likely marking a substantive departure from the previous regime and imposing a higher threshold for contracting authorities to meet.
The claim
The claim in ParkingEye Limited v Velindre University NHS Trust & Anor arose out of a procurement conducted by the First Defendant Velindre University NHS Trust for a five-year contract for the provision of car park management services, on behalf of the Second Defendant. The successful bidder, the National Parking Control Group (NPCG), was identified and tenderers were notified of this award decision, triggering the standstill period.
ParkingEye Limited, an unsuccessful bidder, commenced proceedings during this period, challenging the lawfulness of the procurement. This triggered an automatic suspension under Section 101 of the PA23, preventing the NHS trust from entering into the contract with NPCG.
The claim included allegations of:
- bidders being treated differently without lawful justification, including by assessing bids with reference to unclear and/or undisclosed criteria;
- issues with the Tender Notice incorrectly stating the total value of the contract;
- improper characterisation of the nature of the contract as a services contract rather than a concession contract; and
- the incorrect contracting authority being listed on the Contract Award Notices.
The Defendants applied to the High Court for an order lifting the automatic suspension, so that they could proceed with the contract award to NPCG notwithstanding the challenge by ParkingEye. The High Court was required to consider, at an interim stage, whether the suspension should remain in place pending trial, and to apply, for the first time, the new statutory framework under the PA23.
What is an automatic suspension?
An ‘automatic suspension’ is triggered when a bidder issues proceedings to challenge the contract award decision during the standstill period. This prevents the contracting authority from entering into the contract with the successful bidder while the suspension is in place, acting as an injunction.
Where a contracting authority wishes to proceed with the award despite the challenge, it must apply to the court for an order to lift the automatic suspension. If the application is granted, the suspension is lifted and the contracting authority can proceed and enter into the contract with the successful bidder, with the claimant’s remedy typically limited to damages if its claim ultimately succeeds. If the automatic suspension remains in place, the contracting authority is prevented from entering into the contract until the dispute is resolved or the litigation is complete.
Under Section 102(2) of the PA23, ‘In considering whether to make an order under subsection (1), the court must have regard to
(a) the public interest in, among other things
- upholding the principle that public contracts should be awarded, and contracts should be modified, in accordance with the law;
- avoiding delay in the supply of the goods, services or works provided for in the contract or modification (for example, in respect of defence or security interests or the continuing provision of public services);
(b) the interests of suppliers, including whether damages are an adequate remedy for the claimant;
(c) any other matters that the court considers appropriate.‘
A shift in approach to automatic suspension
In the majority of cases under the Public Contracts Regulations 2015, contracting authorities were successful in obtaining orders to lift the suspension, with courts often willing to allow contract award to proceed, subject to damages being an adequate remedy for the claimant. However, this case suggests that the approach under the PA23 will be substantially different, with more focus on public interest, which will, as set out in the judgment, ‘generally tend in favour of keeping the suspension in place’.
HHJ Keyser KC expressly recognises that the new statutory framework is intended to operate differently to the American Cynamid test under the old regime. It was held that ‘the new test is intended to be substantively and not merely formally very different, in both its method and its effect, from the former test as found in regulation 96(2) of the Public Contracts Regulations 2015‘.
The judgment also emphasises the weight to be given to ensuring that contracts are procured in the correct way, stating that the new test under PA23 is ‘clearly intended to ensure that proper weight is given to the public interest in ensuring that public contracts are awarded in accordance with the law and that, accordingly, the courts do not too lightly lift the suspensions’. This indicates that in future, courts will be more willing and open than previously to keep the suspension in place pending the trial.
Public interest in awarding public contracts in accordance with the law
As set out in section 102(2)(a)(i) of the PA23, in considering whether to lift the automatic suspensions, the court considered the public interest in ‘upholding the principle that public contracts should be awarded, and contracts should be modified, in accordance with the law‘.
ParkingEye suggests that greater emphasis is to be placed on this more stringent public interest test, with this being the first of the factors listed under s102(2). It was held that, importantly, ‘where the lawfulness of an award of a contract is disputed, the contract should not be awarded until that dispute has been determined’. This suggests that the focus will be placed on ensuring that public contracts are seen to be procured in the lawful and correct way, rather than on the timely delivery of such contracts. Contracting authorities will have to focus their efforts even more on ensuring their procurements are run fairly and in accordance with the law, to resist challenges.
Public interest in avoiding delay
As set out in Section 102(2)(a)(ii) of the PA23, in ParkingEye the court also considered the public interest in ‘avoiding delay in the supply of the goods, services or works provided for in the contract or modification (for example, in respect of defence or security interests or the continuing provision of public services)‘. HHJ Keyser KC is clear to distinguish between avoiding a serious delay or interruption to the provision of public services, and, as in this case, simply a delay to the authority implementing a contract with perceived benefits, which is not the focus of the provision. The judgment emphasises that in this case, the car parking services would not cease and will continue to be provided whilst the automatic suspension is remaining, as well as discussing the possibility of extension of the contracts. The court held that ‘this is not a case in which vital interests (such as defence or security) are engaged or in which the continued supply of public services is under threat’ and, as such, section 102(a)(ii) is not levelled at these circumstances.
This suggests that in future cases, arguments by applicants based on delay of the local authority’s preferred contract alone may carry limited weight in applications to lift the automatic suspension, unless this is linked to a risk to services such as security and defence, in which there would be a genuine public interest. This contrasts to the former regime in which significant weight was often placed on delay to the perceived improved services. Focusing arguments on delay to the perceived benefits of the successful providers is unlikely to be sufficient for contracting authorities going forward, unless these are genuinely significant improvements to vital goods or services. HHJ Keyser KC also indicated that the benefits under new contract were modest compared to theincumbent’s contract in this case.
Delay to health services?
It is important to note that the contract, which is the subject of ParkingEye, concerns parking management maintenance services. The court approached it with this in mind, not with it having a serious matter, such as public health, at stake.
It remains to be seen whether health and social care services for vulnerable people, for example, will constitute such vital services to which there is a public interest, which would justify lifting the suspension. In paragraph 20 of the judgment, HHJ Keyser KC refers to non-binding Guidance which states ‘in some circumstances, delaying entry into the contract or making the modification is problematic, for example, if the contract is to deliver certain defence or health-related services where delay would have unacceptable operational impacts‘(our emphasis added). Future cases on such services will shed further light on this and no conclusion can be drawn based on this alone, but this may suggest that in instances of some significant health and social care services, more weight is to be placed on delay to these and the outcome to such applications may look very different.
Adequacy of damages
Under the previous regime, a major factor in determining whether an automatic suspension would be lifted would be whether damages would be an adequate remedy for the Claimant. Often, if the court concluded that damages were an adequate remedy for the claimant, the suspension would usually be lifted and the contract could be awarded. This is still a factor to be considered in the new test, as set out in s102(2)(b) of the PA23. However, in ParkingEye HHJ Keyser KC makes clear that ‘the adequacy of damages for the claimant, though still a relevant matter, no longer has the significance it had’ under the previous test.
In this case, the claimant did not claim damages. However, HHJ Keyser KC nonetheless considered whether damages would be an adequate remedy. Whilst he accepted that damages would be considered an adequate remedy in principle, this did not preclude the applications for automatic suspension from being denied in this case. It will likely be more difficult for bidders to simply not claim damages to avoid the adequacy of damages being considered, or for contracting authorities to use damages being an adequate remedy as their core argument to support lifting an automatic suspension.
What does this mean?
Until there are more cases on applications to lift automatic suspensions under the new regime, it cannot be said with certainty just how this will affect the success of contracting authorities in their attempts to lift the suspension. However, Keyser KC does clearly state that ‘the public interest will generally tend in favour of keeping the suspension in place’. It is likely that a ‘public interest’ centred test as opposed to the ‘adequacy of damages’ test in the past will be used, but this does not mean that the courts will not find in favour of lifting the automatic suspension where this is deemed to be in the public interest.
For local authorities…
Local authorities should no longer proceed with the view that, where damages would be an adequate remedy for the claimant, it is likely that the automatic suspension would generally be lifted. ParkingEye indicates that under the new regime, courts will be placing greater weight on preserving the integrity of the procurement process and scrutinising whether it is appropriate to allow a contract to be entered into before the legal challenge is resolved.
As such, local authorities are likely to place even greater focus on ensuring that procurements are run robustly from the outset. They may choose to dedicate more internal resources and obtain more legal and procurement advice to ensure that their procurements are run with clear, compliant and well-documented processes. This may give local authorities more confidence that, if challenged, they are well-placed to defend their process, rather than relying on any expectation that the suspension will be lifted.
Where challenges are brought against local authorities and they wish to pursue applications to lift the automatic suspension, this case suggests that they should focus strongly on the strength of the evidence they provide in these proceedings. They should ensure the evidence that they rely on is specific and shows severe impact on public services of failing to lift the suspension, and should consider involving the successful bidder as an Interested Party in these proceedings (which did not happen in this case), to support with providing such evidence.
For incumbent providers…
Incumbent providers will likely benefit from the automatic suspension staying in place in more cases. Where new contracts are prevented from being entered into while proceedings are ongoing in more cases, contracting authorities will more often need to extend the existing arrangements with the current providers, meaning that the incumbents can continue to deliver the services for longer.
For bidders…
The ParkingEye decision may make the prospect of issuing a challenge more attractive to bidders. If the courts are, as this judgment suggests, more willing to maintain the automatic suspension pending trial, claimants may have a greater opportunity to preserve their position and keep open the possibility of competing for the contract.
However, it is important to note that this does not impact the position of challenging bidders in the subsequent trial. Even where a bidder is successful at trial, this does not suggest or guarantee that the contract will be awarded to them.