For the first time, the Court of Appeal has issued a declaration of ineffectiveness under the English procurement regime in Faraday Development Ltd v West Berkshire Council  EWCA Civ 2532, allowing an appeal against the first instance decision. The challenge concerned a development agreement for a parcel of land owned by the respondent Council which had been entered into outside the framework of the Public Contracts Regulations (“PCR 2006”). As the agreement, when taken as a whole, committed the Council to the procurement of works from the developer, it fell within the scope of the procurement regime and as such a declaration of ineffectiveness was warranted.
- This the first time that a declaration of ineffectiveness has been made in England under the procurement regime.
- The Court took a holistic approach when considering the overall effect of the agreement in question. It held that even where the developer could walk away from the agreement, the fact that no further steps would be needed to procure the works, should certain conditions be fulfilled, meant that the agreement ought to have been subject to the procurement regime.
- The case provides an insight into the drafting of Voluntary ex ante Transparency Notices (‘VEATs’), explaining the level of detail required for a VEAT to be valid and thus potentially preclude a declaration of ineffectiveness. The respondent Council’s notice was here found to be ineffective, failing the Fastweb test.