Public sector contract disputes

This subtopic is aimed at public sector lawyers dealing with contract matters and considers some of the key issues that parties may encounter in relation to contract interpretation and disputes, including:

  1. contract interpretation

  2. representations and misrepresentation

  3. remedies for breach

  4. damages in tort

  5. limitation of liability

  6. dispute resolution clauses

The guidance in this subtopic is intended to provide an overview of the main commercial issues relevant to contractual disputes, remedies and liability. Further detailed guidance on breach of contract and dispute resolution methods is available from Lexis+® UK Commercial and Dispute Resolution.

Contract interpretation

Disputes about contracts are inevitable. No matter the care and effort made in drafting a contract, the imperfect and imprecise nature of language means there will always be room for differences of opinion on interpretation. Also, despite the position of the parties at the start of any relationship, there may be a change in their views over time, therefore the parties must consider the extent to which they will address the real possibility of disputes arising out of or in connection with their contracts.

Many contractual disputes

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Business and Trade Committee finds serious structural failings persist in Post Office Horizon redress

The Business and Trade Committee (BTC) has published its sixteenth Report of Session 2024–26, reviewing progress on compensation schemes and setting out further recommendations to the government. The BTC notes that over 11,300 claimants have received payments and that approximately £1.44bn has been distributed; however, a significant number remain without full and final redress, and it recommends that all outstanding payments be completed in 2026 with appropriate resourcing. In relation to the Horizon Shortfall Scheme (HSS), the BTC highlights continuing delays in fully assessed claims and recommends that remaining complex cases be transferred to the Department for Business and Trade (DBT), with funded legal advice made available earlier in the process. For the Horizon Convictions Redress Scheme (HCRS), it recommends that the full £600,000 fixed-sum entitlement be paid upfront to eligible claimants rather than in stages. The BTC further recommends that the Ministry of Justice (MoJ) establish a formal independent appeals mechanism for decisions under the Post Office (Horizon System) Offences Act 2024 and undertake a renewed review of historical records to reduce the risk of eligible individuals being overlooked. The report also calls on the government to seek an interim payment from Fujitsu towards redress costs and to publish details of public sector contracts awarded to the company and recommends legislation to quash convictions linked to the pre-Horizon ‘Capture’ system and an investigation into the potential scale of related cases. Chair of the BTC, Rt Hon Liam Byrne MP, states that serious structural failings persist and that thousands remain without full redress. He adds that Fujitsu has yet to contribute to the £2bn redress bill and that emerging evidence relating to the Capture system may represent ‘the tip of another iceberg’.

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