Changing gear: a new era for lifting the automatic suspension under the Procurement Act 2023?

On 1 May 2026, the High Court handed down its judgment in Parkingeye Limited v Velindre University NHS Trust, marking the first significant judicial interpretation of the new test for lifting the automatic suspension in procurement challenges under section 102 of the Procurement Act 2023 (the 2023 Act), and confirming the demise of the American Cyanamid test.

It is now clear that the adequacy of damages is no longer the decisive factor in assessing whether to lift the automatic suspension. Instead, it is one of a number of considerations a court must assess on a case-by-case basis, offering hope to aggrieved bidders considering challenging a public procurement process. However, as explained further below, the need to act swiftly to benefit from the automatic suspension is even more crucial.

Why was it previously so difficult to maintain an automatic suspension? 

Once a claim alleging a breach of the public procurement rules is lodged before the courts, an automatic suspension applies to prevent a contracting authority from concluding a contract with its chosen bidder, absent permission from the Court. 

Under the old Public Contracts Regulations 2015 or Concession Contracts Regulations 2016, a court faced with an application to lift such a suspension was first required to ask whether it would be appropriate to grant an interim injunction restraining the contracting authority from entering into the contract. If the Court concluded that it would not be appropriate to grant such an injunction, it could lift the suspension. This in turn required the application of the test laid down in American Cyanamid Co. v Ethicon Ltd, which involves a sequential, four-stage inquiry: 

1. is there a serious issue to be tried;
2. if so, would damages be an adequate remedy for the claimant if the suspension were lifted and the claimant succeeded at trial;
3. if not, would damages be an adequate remedy for the defendant if the suspension remained and the defendant won at trial; and
4. where there is doubt as to the adequacy of damages as remedy, where does the balance of convenience lie? 

Crucially, a finding that damages were an adequate remedy for the claimant was effectively decisive. In short, if the claimant could, in principle, be compensated in monetary terms, the suspension would be lifted. As bidders are typically commercial entities, it was challenging to show that damages would not be adequate compensation for the loss of a contract, and therefore for bidders successfully to argue that the suspension should remain in place (even if, in reality, the likelihood of them being awarded damages was low even if a breach were established).

What has changed? 

Section 102(2) of the 2023 Act replaces the American Cyanamid framework with a bespoke test. It provides that, when considering whether to make an order lifting the automatic suspension, the Court must have regard to: 

1. the public interest, including:
   • upholding the principle that public contracts should be awarded lawfully; and
   • avoiding delay in the supply of 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.

As the new test still makes reference to the adequacy of damages, there remained some uncertainty as to how it would be interpreted in practice and whether it would result in meaningful change.

The first attempt to lift the automatic suspension under the new 2023 Act test arose from a challenge brought by Parkingeye Limited, the incumbent provider of car parking management services to Cardiff and Vale University Health Board (Cardiff & Vale), alleging that Cardiff & Vale’s new procurement process was flawed. Parkingeye challenged the award decision during the standstill period, triggering the automatic suspension under the 2023 Act. The defendants then applied to lift the suspension. 

How should the new test be interpreted?

The Court began by undertaking a careful examination of section 102(2), noting that the balance between the public interest and the private interests of suppliers is "at the heart of the new test", which is intended to be "substantively and not merely formally very different" from the old American Cyanamid framework. As a result, the adequacy of damages for the claimant is no longer determinative, but merely one matter to be taken into consideration alongside other factors. This is a critical change. 

The Court also placed considerable weight on the examples of public interest in section 102(2) (a), holding that section 102(2) (a) (i) (the public interest in contracts being awarded lawfully) should be read to the effect that “the public interest will generally tend in favour of keeping the suspension in place, although on the facts of particular cases it may weigh differently”, and that “the principle is directed to the importance of awarding contracts lawfully… recognising a public interest that, where the lawfulness of an award of a contract is disputed, the contract should not be awarded until that dispute has been determined". Further, the Court made clear that when considering the public interest in avoiding delay in the supply of goods, services or works, the assessment should consider whether the public services will continue to be provided at all, not simply whether there is a delay in provision under the new contract. Parliament intended the public interest in lifting suspensions to focus on serious situations, such as interference with defence or security interests, or the interruption of public services. 

The Court summarised the new test in five propositions:

1. The Court must balance the public interest and the interests of suppliers, including the claimant, along with any other matters it thinks appropriate.
2. The weight to be afforded to the several factors is a matter for the Court in each particular case.
3. However:
   • the adequacy of damages for the claimant, though still a relevant matter, no longer has the significance it has under the American Cyanamid test;
   • the new test recognises the public interest that, where the lawfulness of a proposed award is in dispute, the contract should not be awarded until the dispute has been resolved; and
   • the public interest in lifting the suspension will generally concern the interest in the continuing provision of goods and services, rather than merely the contracting authority’s judgement as to its preferred provider of the goods/services or the terms on which they will be provided.
4. Accordingly, although there is no statutory presumption, and in each case the decision as to where the balance lies must be decided on the facts, the lifting of the suspension will generally require the presence of either a very persuasive countervailing public interest or some overriding matter of private interest.
5. In deciding where the balance lies, the Court must also be mindful of its power to provide for undertakings or conditions in any order that it makes.

Key factors in this case 

Applying these principles to the facts of this case, the Court found that the public interest did not favour lifting the suspension. Car parking services would continue under the existing contract while the suspension remained in place, and the benefits said to flow from the new contract were "very modest". The Court noted that the claimant had also offered to match the main benefits (a revenue sharing arrangement and providing access to its online portal) pending resolution of the dispute (and indeed some of these benefits were included in the existing contract, although had not been activated). Notably, the Court was not persuaded that the risk of an extension of the existing contract being challenged had any real weight in this balancing exercise. 

As to the interests of suppliers, the Court accepted that it would, in principle, be just to confine the claimant to a remedy in damages (although they had not been claimed in this instance) – rejecting arguments based on difficulty of quantification and reputational harm. Helpfully, the Court also noted that it saw “no sense in favouring, for the purposes of section 102(2), a claimant that does not include the damages claim at the outset. What matters is the Court’s assessment of the claimant’s genuine interests, not the fortuity or tactics of a pleading”. However, because the adequacy of damages was no longer determinative, this finding did not tip the balance. Given the public interest in lawful procurement, the absence of any genuine threat to the continuing provision of public services, and the limited benefits of lifting the suspension, the Court refused the application. 

The Court also noted that the merits of the case did not have “any material effect” on the balancing exercise, notwithstanding its observations that “not all of the claimant's points have immediate attraction” and despite the contracting authority raising some serious limitation arguments. 

Implications for future cases 

The judgment may yet be appealed. But if it stands, it fundamentally alters the dynamics of applications to lift the automatic suspension under the 2023 Act. It is, however, important to remember that where a challenge relates to a procurement governed by the old regime, the American Cyanamid test will still apply and will, therefore, remain relevant for some time yet. 

It is also important to remember that whilst the 2023 Act rebalanced the test in section 102 (2), it also made the timescale for obtaining an automatic suspension more challenging. Under the 2023 Act, an automatic suspension is only triggered if the claim is lodged and the contracting authority notified prior to the expiry of the standstill period. Under the old regime, an automatic suspension would apply if a claim was lodged prior to the entry into the contract, even if the standstill period had already expired. 

Notwithstanding these issues, the conclusion that lifting the suspension will "generally require… either a very persuasive countervailing public interest or some overriding matter of private interest" is notable. Whilst the Court was careful to emphasise that there is no statutory presumption, this approach clearly raises the threshold for contracting authorities, particularly where the existing provision of services is not genuinely at risk and the claimed benefits of the new contract are incremental rather than transformative.

The judgment also emphasises the prominence the 2023 Act gives to the principle that public contracts should be awarded in accordance with the law, effectively creating a starting point in favour of maintaining the suspension in most cases. This is a significant departure from the previous position, where this aspect of the public interest was often overshadowed by findings on the adequacy of damages. Contracting authorities will therefore need to develop more case-specific and nuanced arguments as to why the suspension should be lifted in any individual case.

Finally, the decision carries important practical implications. For contracting authorities, the lesson is clear: robust procurement processes and meticulous record-keeping are more important than ever, because the risk that a successful challenge will result in the suspension being maintained (and the procurement effectively frozen) has materially increased. For challengers, the judgment provides encouragement that the new regime offers meaningful interim protection, which will increase the potential for procurement challenges to deliver tangible and beneficial outcomes to aggrieved bidders.