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The Public Contracts Regulations 2006 (revoked)

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Changes over time for: Section 47N

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Version Superseded: 26/02/2015

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Status:

Point in time view as at 01/10/2011. This version of this provision has been superseded. Help about Status

Changes to legislation:

There are currently no known outstanding effects for the The Public Contracts Regulations 2006 (revoked), Section 47N. Help about Changes to Legislation

[F1Penalties in addition to, or instead of, ineffectivenessE+W+N.I.

This section has no associated Explanatory Memorandum

47N.(1) Where the Court makes a declaration of ineffectiveness, it must also order that the contracting authority pay a civil financial penalty of the amount specified in the order.

(2) Paragraph (3) applies where—

(a)in proceedings for a declaration of ineffectiveness, the Court is satisfied that any of the grounds for ineffectiveness applies but does not make a declaration of ineffectiveness because regulation 47L requires it not to do so; or

(b)in any proceedings, the Court is satisfied that the contract has been entered into in breach of any requirement imposed by regulation 32A, 47G or 47H(1)(b), and does not make a declaration of ineffectiveness (whether because none was sought or because the Court is not satisfied that any of the grounds for ineffectiveness applies).

(3) In those circumstances, the Court must order at least one, and may order both, of the following penalties—

(a)that the duration of the contract be shortened to the extent specified in the order;

(b)that the contracting authority pay a civil financial penalty of the amount specified in the order.

(4) When the Court is considering what order to make under paragraph (1) or (3), the overriding consideration is that the penalties must be effective, proportionate and dissuasive.

(5) In determining the appropriate order, the Court must take account of all the relevant factors, including—

(a)the seriousness of the relevant breach of the duty owed in accordance with regulation 47A or 47B;

(b)the behaviour of the contracting authority;

(c)where the order is to be made under paragraph (3), the extent to which the contract remains in force.

(6) Where more than one economic operator starts proceedings in relation to the same contract, paragraph (4) applies to the totality of penalties imposed in respect of the contract.

Civil financial penalties

[F2(7) Subject to paragraph (7A), where a contracting authority is ordered by the High Court of England and Wales to pay a civil financial penalty under this regulation—

(a)the Court's order must state that the penalty is payable to the Minister for the Cabinet Office;

(b)the Court must send a copy of the order to the Minister;

(c)the contracting authority must pay the penalty to the Minister; and

(d)the Minister must, on receipt of the penalty, pay it into the Consolidated Fund.

(7A) Where the Minister for the Cabinet Office, or the Cabinet Office, is ordered to pay a civil financial penalty under this Part—

(a)paragraph (7) does not apply; and

(b)the Minister for the Cabinet Office must pay the penalty into the Consolidated Fund.]

(8) [F3Subject to paragraph (8A), where] a contracting authority is ordered by the High Court of Northern Ireland to pay a civil financial penalty under this regulation—

(a)the Court’s order must state that the penalty is payable to the Department of Finance and Personnel;

(b)the Court must send a copy of the order to the Department;

(c)the contracting authority must pay the penalty to the Department; and

(d)the Department must, when it receives the penalty, pay it into the Consolidated Fund of Northern Ireland.

[F4(8A) Where the Department of Finance and Personnel is ordered to pay a civil financial penalty under this Part—

(a)Paragraph (8) does not apply; and

(b)the Department must pay the penalty into the Consolidated Fund of Northern Ireland.]

(9) Where a contracting authority is a non-Crown body—

(a)any payment due under paragraph (7) may be enforced by the [F5Minister for the Cabinet Office] as a judgment debt due to [F6the Minister ]; and

(b)any payment due under paragraph (8) may be enforced by the Department of Finance and Personnel as a judgment debt due to it.

Contract shortening

(10) When making an order under paragraph (3)(a), or at any time after doing so, the Court may make any order that it thinks appropriate for addressing the consequences of the shortening of the duration of the contract.

(11) Such an order may, for example, address issues of restitution and compensation as between those parties to the contract who are parties to the proceedings so as to achieve an outcome which the Court considers to be just in all the circumstances.

(12) Paragraph (13) applies where the parties to the contract have, at any time before the order under paragraph 3(a) is made, agreed by contract any provisions for the purpose of regulating their mutual rights and obligations in the event of such an order being made.

(13) In those circumstances, the Court must not exercise its power to make an order under paragraph (10) in any way which is inconsistent with those provisions, unless and to the extent that the Court considers that those provisions are incompatible with the primary order that is being made, or has been made, under paragraph (3)(a).

(14) In paragraph (3)(a), “duration of the contract” refers only to its prospective duration as from the time when the Court makes the order.]

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