What the First Procurement Act 2023 Judgment Means for Automatic Suspension

It has been more than a year since the Procurement Act 2023 (PA23) came into force in February 2025, and the long wait for the first High Court judgment on the Act to be published is finally over. Last week, the court handed down judgment in Parkingeye Limited v Velindre University Trust (1) and Cardiff and Vale University Health Board (2) [2026] EWHC 1019 (TCC), a case concerning the new test in section 102 PA23 for when the automatic suspension should be lifted.

By way of reminder, suppliers who issue legal proceedings challenging the outcome of a procurement within the 8-working day standstill period benefit from an automatic suspension, preventing the contracting authority from awarding the contract until the supplier’s claim is determined or the court otherwise orders that the suspension is lifted. Prior to PA23, applications to lift the suspension were governed by the American Cyanamid test for an injunction, a three-limbed test which considers (i) whether there is a serious issue to be tried between the parties; (ii) whether damages (i.e. financial compensation) would be an adequate remedy for the supplier, if the suspension were to be lifted; and (iii) the balance of convenience i.e. which party would be more prejudiced by the suspension being lifted or remaining in place. Contracting authorities were successful in having the suspension lifted in the vast majority of cases when this test was applied, typically because it was difficult for suppliers to show good reason why damages would not be an adequate remedy for them.

Section 102 PA23 introduces a new test which requires the court to consider:

1. The public interest in, among other things, (i) upholding the principle that public contracts should be awarded in accordance with the law; and (ii) avoiding delay in the supply of the goods, services or works provided for in the contract;
2. The interests of suppliers, including whether damages are an adequate remedy for the claimant; and
3. Any other matters the court considers appropriate.

While many lawyers expected the new test to produce similar results to the old one, the court confirmed in Parkingeye that the new test is intended to be “substantively and not merely formally very different, in both its method and its effect”.

In particular, the court said:

• The adequacy of damages for the claimant, although still relevant, no longer has the significant weight it had under the American Cyanamid test;
• Although there is no presumption built into the test, the public interest will generally tend in favour of keeping the suspension in place, unless on the particular facts of the case, there is a persuasive reason why the contract needs to be awarded, for example because there would otherwise be interference or disruption to the delivery of essential services (in many cases, this will not arise because existing contracts can be extended).

This judgment represents a significant development in public procurement law and will be welcomed by suppliers, for many of whom the chance to be awarded the contract is often preferred over damages.

Suppliers should note, however, that if the suspension is kept in place then in most cases the Court will expect the supplier to give what is known as a cross-undertaking in damages – an agreement to compensate the contracting authority for any losses it suffers as a result of the suspension remaining in place, in the event the claim is ultimately unsuccessful. This does therefore expose the supplier to greater risk.

Suppliers should also be aware that the old American Cyanamid test will continue to apply to procurements being conducted under the Public Contracts Regulations 2015 (of which there are still many, particularly in relation to frameworks which were concluded before 2025).

Further information on challenging a procurement award under PA23 can be found in our Need to Know Guide.