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Masthead Local Govt - Procurement and Contracts

What next for damages?

Money iStock 000008683901XSmall 146x219A recent EFTA court ruling on whether the gravity of a breach of the EEA rules on public contracts is relevant for the award of damages is at odds with a Supreme Court judgment. Helen Prandy explains why this could be important post-Brexit.

A frequent query we see through our portal and at our seminars is what is going to happen to public procurement law post Brexit.  The answer we invariably give is “No-one really knows” and with the seemingly intractable issues of the ‘divorce bill’, citizens’ rights and the Irish border still seemingly no nearer to resolution and it looking likely that Britain will miss the latest ultimatum to advance to trade talks with the EU 27 any time soon public procurement law is the last thing (probably) on the minds of Mrs May, Mr Davies and their plethora of officials.

One of the things the Brexiters have been very keen on is the idea of ‘taking back control’. In legal matters this means ousting the jurisdiction of the European Court of Justice and reinstating the sovereignty of the Supreme Court. 

Post Brexit no-one currently knows what the trade options are but one which is possible, and touted at the time of the Referendum, is a position similar to that of Norway which is within a free trade area (the EEA) but not part of the EU. Those countries submit to the jurisdiction of the EFTA court which is equivalent to the ECJ.

Not so long ago the Supreme Court found that to establish a claim in damages for breach of the procurement rules a “sufficiently serious breach” was required (see our blog post here). However the EFTA court has just found that there is no requirement to show the gravity of a breach in order to recover damages for breach of the EEA rules on public procurement.

So if, at some time in the future, the UK adopts the trade rules of the EEA, or something similar, in order to facilitate trade with the EU 27 will it be this decision of the EFTA court which allows a claim for damages or the contrary decision of the Supreme Court?

Like many Brexit related issues this one may take years to work out but it highlights that wherever we go with public procurement in the future the devil may, as always, be in the detail.

You can read the judgment here: Fosen-Linjen AS and AtB AS (Case E-16/16)(EFTA Court 2016/16).

Helen Prandy is a principal associate at Mills & Reeve. She can be contacted on 01223 222344 or This email address is being protected from spambots. You need JavaScript enabled to view it.. This article first appeared on the firm's Procurement Portal.

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