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Procurement case headed for the Court of Appeal

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A leading case on the application of public procurement to public sector real estate scheme is headed to the Court of Appeal, after that court granted permission for the case to be heard.

As you may recall, judgment was given in the back in August 2016 in favour of the defendant local authority, West Berkshire District Council and its chosen development partner St Modwen Development in what was an important case for those involved in local authority development schemes.  (At the time we commented on the judgment).

The case concerned a competition held by the Council to select a development partner to bring forward a valuable development site.  The competition was not conducted in accordance with the procurement regime set out in the Public Contracts Regulations.  The Council (successfully) argued in the High Court that because of the nature of the overall development agreement (in particular because it lacked clear development obligations for the initial phases of the work) there is no “public works contract”, and therefore no need to comply with the Regulations.  As we noted in the article, much of the High Court judgment is sensible and represents a re-statement of existing law, but there we also identified certain aspects of the judgment could be subject to criticism, particularly the process for the drawdown of ground leases (in the latter phases of the development process) which must (apparently) contain obligations to develop, which might be argued to bring those leases dangerously close to the definition of “public works contract”.

The August 2016 judgment was regarded as tremendously helpful by those advising on local authority development scheme, and it is to be hoped that the Court of Appeal leaves intact the key reasoning on which the earlier judgement was based.

The Court has indicated a “hear-by” date of 15 December, so we don’t have too much longer to wait.