Readers of this blog will recall that the recent European case of Uniplex has clarified the law on the limitation period for claimants to bring a claim for damages under The Public Contracts Regulations 2006. The Regulations state that the claim must be brought within three months of the date on which grounds for the claim first arose. There was previously a lack of clarity about how the latter date should be arrived at was it the date of the breach of itself, or rather the date that the claimant obtained knowledge of the breach - The Uniplex decision made it clear that the three month period will only start once the claimant has (or ought to have had) the relevant knowledge.
The recent case of SITA v GMWDA is the first UK case to be decided in the light of the Uniplex ruling. The facts were quite straightforward - GMWDA ran a competition for a massive £3 billion new project which would be the largest of its kind in the UK. In the later stages Viridor Laing was appointed preferred bidder with the SITA consortium as reserve bidder. SITA was sent an 'unsuccessful bidder' letter accordingly on 18 April 2008. Following nearly a year's delay due to the global credit crunch GMWDA finally entered into the contract with Viridor on 8 April 2009. Following the award of the contract there was lengthy correspondence between the parties in which SITA demanded further information about the procurement process and threatened to commence a claim if this was not provided. SITA alleged that there had been a breach of the Regulations as the final form of the contract had introduced new elements and that SITA ought have been brought back into the competition accordingly.
On 27 August 2009 SITA commenced its claim. GWMDA argued that SITA was outside the three month window in which to bring a claim to the date the 'grounds' arose was no later than the date the contract was entered into which was 8 April 2009. The limitation period therefore ended on 7 July 2009 and SITA was out of time.
SITA's answer to this argument was that it did not know whether it had actually suffered an actionable loss until it possessed the information it obtained during the correspondence with GMWDA after 8 April 2009.
The High Court disagreed and ruled that a claimant is fixed with knowledge from the time it knows of the breach regardless of whether any loss is also apparent at that point. It decided this not least in the interests of legal certainty because the judge thought it easier to date a breach than to date loss arising from it (lack of legal certainty was what the ECJ criticized in the 2006 Regulations in the Uniplex decision).
This decision was good news for contracting authorities as it shows that bidders do not have a carte blanche to 'sit on their hands' but rather they must bring a claim as soon as they have knowledge of a breach regardless of whether any loss/damage is yet apparent. The case does turn on its own facts to some extent - it is likely that in most procurement claims the challenger will become aware of both the fact of the breach and the loss/damage at the same time.
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