- 'Faraday scheme' contract declared ineffective: development agreements, ineffectiveness and VEAT notice analysis (Faraday Development Ltd v West Berkshire Council)
- What are the practical implications of this case?
- Contracting authorities will need to consider whether arrangements could be construed as a whole
- VEAT notices must disclose the full extent of the proposed arrangements
- Issues in relation to limitation
- What was the background?
- What did the court decide?
- An authority cannot commit to acting unlawfully in the future
- Arrangements must be construed as a whole
- A high degree of transparency must be observed in VEAT notices
- Case details
Local Government analysis: Contracting authorities have been waiting for some time for the Court of Appeal’s judgment in the case of Faraday. This case concerned West Berkshire Council’s (the council) entry into a development agreement with St Modwen Developments Limited (SMDL) on 4 September 2015 for the disposal of land on the London Road Industrial Estate, in Newbury. The case succeeded on the second ground of appeal that it was unlawful for the council to enter into the development agreement, because by doing so it committed itself to entering into a public works contract without following the procedure for public procurement. One of the most striking outcomes of the judgment is that the court made a declaration of ineffectiveness in respect of the works contract. This judgment raises significant implications for contracting authorities looking to structure development agreements which fall outside the EU public procurement regime. Written by Catherine Maddox, solicitor and Matthew Mo, partner, at Bevan Brittan LLP.
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