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Masthead Education - Procurement and Contracts

Court of Appeal to hear key case on development agreements and procurement

The Court of Appeal will today [13 June] hear an appeal against a High Court ruling that dismissed a legal challenge by an unsuccessful bidder over the way a council procured a development partner.

The case of R (otao Faraday Development Limited) v West Berkshire Council and Anr centres on the regeneration of land at the London Road Industrial Estate in Newbury for housing and office and retail space. The council owns the site.

Faraday Development launched a judicial review of the process by which St Modwen gained development partner status.

The claimant argued that West Berkshire Council failed to obtain the best consideration reasonably available for the disposal of its interests in land and had unlawfully failed to comply with the public procurement regime.

However, in a ruling in August 2016 Mr Justice Holgate found the council’s choice of St Modwen was rational, and that there was no substance in Faraday’s criticism.

The judge held that the agreement between West Berkshire and St Modwen did not fall within the public procurement regime and the council acted lawfully in structuring the procurement process as it did.

Faraday’s appeal was due to be heard today [13 June] by Lord Justice Lewison, Lord Justice Lindblom and Lord Justice Flaux.

Commenting on the appeal, Stephanie Rickard, a partner at VWV, said: “The decision at first instance in 2016, was a significant case, particularly for regeneration agreements, as it concerned the principles that apply when seeking to structure development agreements outside the scope of the public procurement rules.

"Many regarded the decision as pushing the boundaries of when a development agreement is not a public works contract so the outcome will be an important test case.”

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