Judicial review – widening the risk of challenge?

Tuesday October 4th, 2011

By Ruth McNaught, Solicitor, Harper Macleod LLP

Contracting authorities’ exposure to procurement challenges has increased in recent years, most notably through the extensive range of remedies available to bidders aggrieved at the outcome of a procurement process. A challenge can be raised on the grounds of a breach of the Public Contracts Regulations 2006 (the “Regulations”) through the courts and also, if parties have exhausted all other remedies, by way of judicial review.

The main grounds of review are that the decision maker has acted outside the scope of its statutory powers; that the decision was made using an unfair procedure; or that the decision was an unreasonable one. Judicial review is not concerned with the ‘merits’ of a decision or whether the public body has made the ‘right’ decision. It considers whether the public body had acted lawfully by assessing three categories: illegality, irrationality and procedural impropriety.

To be entitled to apply for judicial review of a decision, a person must have “sufficient interest” or “standing”.

In R (on the application of Chandler) v Secretary of State for Children, Schools and Families, the Court of Appeal considered whether Gillian Chandler (a parent of a school-age child in Camden) had sufficient “standing” to challenge by judicial review the process adopted by the local authority for making arrangements with a sponsor to establish a school as an Academy.

Mrs Chandler and various others who opposed the Academy in Camden wanted to have been involved in a consultation process as to what sort of school should be established in the area and, if the school was to be an Academy, to have a role in choosing which sponsor should run it.

At first instance, the judge reasoned that the rights conferred by the Regulations were private law rights conferred on “economic operators” only. The fact that the claimant lived in Camden and was the parent of school-age children was not sufficient. Although it was clear that she had an “immediate interest” in the standard of schooling in the area, this did not amount to a sufficient level of standing in law for the purposes of bringing judicial review proceedings.

The Court of Appeal agreed with the judge at first instance on the question of Mrs Chandler’s standing, finding she was not challenging the Secretary of State’s decision because of any interest in the observance of the public procurement regime, but simply because she was opposed to the institution of Academy schools. She was thus attempting, or seeking, to use the public procurement regime for a purpose for which it was not created. She therefore did not have sufficient “standing”.

However, the Court of Appeal also took the view that an individual who has a sufficient interest in compliance with the public procurement regime (by which the Court meant that he is affected in some “identifiable way”), even if he is not himself an economic operator who could pursue remedies under the Regulations, could bring judicial review proceedings to prevent non-compliance with the Regulations or the obligations derived from the Treaty.

Although Mrs Chandler was herself unsuccessful in bringing an action for judicial review, the Court’s findings that a person who is not an economic operator but who has sufficient interest by being affected in some “identifiable way” by the way a procurement has been run may have standing to bring judicial review proceedings against a contracting authority, seems to have widened the risk of challenge that little bit more.

Ruth is a solicitor at Harper Macleod LLP and can be contacted on [email protected]

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