High Court Lifts Automatic Suspension Number Four

01 Apr 2011

The United Kingdom Border Agency, represented by Elisa Holmes, has won a hearing determining its application to have an automatic suspension imposed under Regulation 47G of the Public Contract Regulations 2006 (as amended by the Public Contract (Amendment) Regulations 2009) lifted.

Metropolitan Resources, represented by Philip Moser, issued a claim in February on the basis that UKBA’s decision to obtain what is known as Initial Accommodation services for asylum seekers from a provider – Happy Homes (who to date had only provided a different kind of accommodation for asylum seekers) – instead of from Liverpool City Council (with whom it had a sub-contract but whose contract with UKBA was about to expire) without conducting any kind of competitive procedure was unlawful. The effect of Regulation 47G of the Regulations is that upon the issue of such the claim, UKBA was prevented from finalising arrangements to obtain the services from Happy Homes.

In only the fourth case of its kind, Mr Justice Newey made the order removing the automatic suspension on the basis of the application of American Cyanamid principles. He held that whilst damages would not be an adequate remedy for the Claimant if it was successful in the substantive proceedings, nor would they be adequate for the UKBA if it was successful. The balance of convenience lay in favour of lifting the automatic suspension because if it were not brought to an end, UKBA would in effect be forced to enter into another contract with Liverpool City Council, that such arrangements may well themselves result in a contravention of the Regulations and that UKBA had had concerns with the provision of the services by Liverpool City Council through its sub-contract with the Claimant to date.

The Judgment has not yet been published.

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Philip Moser QC
Elisa Holmes