The case of Wylde v Waverley BC  EWHC 466 (Admin) highlights the obstacles for third party organisations to bring a challenge in relation to a publicly procured process where they are not bidders or would-be bidders.
The case, which concerns a judicial review of a decision to vary a development agreement, will be of interest to public sector authorities, council members and developers, as well as being of wider application to high profile and politically sensitive projects.
Five claimants sought judicial review against a decision to proceed with a land development in Farnham, Surrey. The claimants included representatives from the local borough and town authorities, as well as members of civic societies. The claimants were opposed to the development plans on the basis that they were not in keeping with the town of Farnham.
The development agreement
The claim related to a proposed variation of the original development agreement in favour of the developer. The original development agreement had included a viability condition as a condition precedent, requiring that before the development could proceed, the land value to the local authority had to reach a certain value (£8.76 million) after development. Due to changes in market conditions from the time the opportunity was originally put out to tender and the time the proposed development received planning permission, it was subsequently realised this value would not be reached. The local authority sought to reduce the viability condition to a minimum land value of £3.19 million.
As a precautionary measure, the local authority decided to issue a voluntary ex ante transparency (VEAT) notice advertising its intention to vary the contract. No responses were made to the VEAT notice.
The claimants were not economic operators and had not bid for the original development agreement. Therefore they could not bring a claim under the Public Contract Regulations 2006. Instead they sought redress by way of judicial review for an order that the variation decision was unlawful because it breached procurement law, and that the council members should be able to recover the loss in land value.
Scope of judicial review
The scope of judicial review is very limited and does not apply where other forms of challenge are available. The judge had to consider whether the claimants had sufficient standing to bring a claim for judicial review.
The court held:
- The test for judicial review in procurement cases is narrower than that which would apply in judicial review generally.
- The judge applied the reasoning in R (on the application of Chandler) v Secretary of State 2009 that permission for a claim in judicial review can only be made if the claimant has 'sufficient interest in the matter to which the application relates’. It was not clear that council tax payers would be able to bring themselves within this test for the mere fact of being within that category of persons.
- In order to show sufficiency of interest, a claimant who is not an economic operator and who has not bid for the contract, must “show that performance of the competitive tendering procedure... might have led to a different outcome that would have had a direct impact on him”.
- The judge concluded that the claimants would have difficulty showing that a further competitive tender exercise for the varied contract would result in a different outcome (as evidenced by the lack of response to the VEAT notice) and lack of direct impact. On this basis they did not have legal standing to bring a judicial review claim.
The case is in contrast to the 2015 decision of R (on the application of Gottlieb) v Winchester City Council which involved seemingly similar facts – a development agreement which was varied and a claim brought by a local councillor opposed to the development. However in that case, the council had not tendered the original opportunity or the proposed variation. This may explain the difference in outcome although the judge in this case queried the decision in Gottlieb.
This case makes it more difficult for interested parties to challenge a procurement process after a decision has been made by way of judicial review. This is likely to be good news for contracting authorities who are involved in politically sensitive projects. It is not sufficient for parties to simply show their interest in challenging a decision but they will need to demonstrate a nexus between the decision and how it affects them.