Lifting the automatic suspension – first decision under the Procurement Act 2023 reflects shift in approach

The High Court has recently handed down judgment on the first application to lift the automatic suspension imposed under s.101 of the Procurement Act 2023 (PA 2023) in ParkingEye Ltd v Velindre University NHS Trust and Cardiff and Vale University Health Board[2026] EWHC 1019 (TCC).

The Court determined that the automatic suspension should remain in place pending the final trial of ParkingEye’s challenge.

While this is only a single decision, the judgment suggests a definite shift in the approach the Courts will take when applying the new statutory test under the Procurement Act 2023, and which is likely to be more favourable for challengers seeking to argue that the automatic suspension should remain in place.

Background to the dispute

The case arose out of a procurement run by Velindre University NHS Trust and Cardiff and Vale University Health Board (Authorities) for car parking management services across NHS sites in Wales. ParkingEye Ltd, the incumbent provider, was unsuccessful in the competition and issued proceedings alleging a range of breaches of the PA 2023.

As a result of a claim being issued, the Authorities were prevented from entering into the new contract under s.101 of the PA 2023. The Authorities applied to lift that suspension, arguing that doing so was necessary to allow implementation of a new arrangement which they expected to deliver service improvements and operational efficiencies.

The previous legal position

Under the Public Contracts Regulations 2015, the Courts determined applications to lift automatic suspension by analogy to the well‑established American Cyanamid principles applicable when determining an application for interim injunctive relief.

In practice, the Courts have frequently accepted that public bodies should be able to proceed with contract awards and lifted the automatic suspension, with unsuccessful bidders confined to an (often less desirable) remedy in damages only. This experience has led to a de facto presumption that, in most cases, an application to lift the automatic suspension would have good prospects of success.

A new legal test under the Procurement Act 2023

In ParkingEye, the High Court made clear that the position under the PA 2023 is different. Section 102 of the Procurement Act 2023 introduces a new statutory test, which expressly requires the court to have regard to specific factors (together with any other relevant matters). While under the American Cyanamid test, the adequacy of damages for a challenger was a key hurdle that many commercial suppliers struggled to overcome, this is only one consideration in the wider analysis under the PA 2023 as part of considering the interests of suppliers.

The Court emphasised that there is no presumption in favour of lifting suspension. Instead, the starting point is neutrality, with the importance of procurement decisions being taken lawfully playing a central role in the analysis, and that “the lifting of the suspension will generally require, on the particular facts of the case, the presence of either a very persuasive countervailing public interest or some overriding matter of private interest”

Below we have summarised the key points made in the judgment.

1. Lawfulness takes priority

A key principle emerging from the judgment is that the public interest in lawful procurement is not satisfied merely by the availability of damages to compensate for breaches of the PA 2023. Rather, the Court emphasised that, where the lawfulness of a contract award is disputed, the public interest is likely to favour that contract not being entered into until that dispute has been resolved.

2. Service continuity and potential improvements

The Court is also required to consider the countervailing interest in avoiding delay in provision of goods, services or works that may follow from the automatic suspension remaining in place. Here, the defendants argued that lifting suspension was justified by anticipated improvements under the new contract. However, the Court gave these arguments limited weight. Where services were already being delivered by the incumbent, continuity pending resolution of the dispute was considered preferable to pressing ahead based on promised or speculative benefits. It is possible that this may be of greater significance in respect of more novel contracts, or those offering a significantly different service, than appears to have been the case here.

3. Expedited trials replacing routine lifting of suspension

The court acknowledged that maintaining the automatic suspension can lead to delay, but on the facts of the case, the Court noted that judgment by the end of 2026 was likely achievable (the underlying proceedings having been issued in January 2026 and the application to lift the automatic suspension having been made in March 2026). Overall, the Court considered that the risk of delay did not outweigh the reasons for maintaining the automatic suspension.

The judgment signals that procurement challenges should increasingly be:

• case‑managed robustly;
• progressed on accelerated timetables; and
• resolved on their merits before contracts are signed.

This represents a clear policy shift away from “contract now, deal with a damages claim later”. However, Court resources are invariably stretched, and it is possible that, in future, a greater number of claims will proceed with the automatic suspension remaining in place, but with significant time before a final trial.

Key Takeaways

For contracting authorities

Authorities should expect significantly greater difficulty in lifting automatic suspension. Arguments based on the adequacy of damages or general or nonspecific hopes for future service improvements are likely to carry reduced weight, and authorities should plan for the possibility that legality challenges must be resolved before contract signature.

For suppliers

Automatic suspension is likely to be a more effective and meaningful protection for a bidder seeking to have an award decision set aside. A consequence of that is that the Courts may also be more willing to list expedited trials as a consequence, and inParkingEye, the Court took into account that ParkingEye had offered an undertaking to compensate the Authorities for losses caused by the suspension remaining in place (which is likely to continue to be expected of suppliers).

Conclusion

ParkingEye indicates that the PA 2023 has altered the balance on applications to lift the automatic suspension. Where legality is in dispute, the Court’s preferred solution is likely to be to leave the suspension in place and to resolve the challenge swiftly and decisively, before public contracts are allowed to proceed.

Please click here for the full judgment.

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