Charities could benefit from EU contracts legislation

Remedies Directive consultation paves the way for legal change

Charities that feel they have lost out on public service contracts because the bidding process was unfair could be given the right to appeal for the contracts to be cancelled.

The EU introduced the Remedies Directive in 2007 to improve procedures relating to the awarding of public contracts. Under draft legislation drawn up by the UK Office of Government Commerce to implement the EU rules, courts will be able to cancel contracts that breach procurement rules and order a new tender process. The proposals were put out to consultation on 30 April.

Under the current rules, charities and other bidders can apply for damages if a procurement process turns out to be flawed but the contract remains in place.

"There is a general right to damages if you suffer loss as a result of a failed procurement process," said Julian Blake, a partner with law firm Bates Wells & Braithwaite. "But this Remedies Directive is recognising that the general right is often not really want you want. What you really want is for the whole process to be dealt with again, so you can get the opportunity to get the contract."

The Remedies Directive consultation runs until 24 July and legislation on the directive is expected to be laid before Parliament later this year.

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