Brexit legal challenges Angelica Hymers Court bundles – imperative not administrative Katie Scott Automatic suspension and damages - what counts if you are a non-profit organisation? Jennifer Grigg SUDS – how to avoid that sinking feeling Ben Standing A true delegation of public functions Anja Beriro

1. Birmingham Exeter London Manchester Nottingham
www.brownejacobson.com
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2. Birmingham Exeter London Manchester Nottingham
www.brownejacobson.com
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Index
Page
Brexit legal challenges
Angelica Hymers
2 - 3
Court bundles – imperative not administrative
Katie Scott
4 - 7
Automatic suspension and damages - what counts if you are a non-profit
organisation?
Jennifer Grigg
8 - 10
SUDS – how to avoid that sinking feeling
Ben Standing
11 - 13
A true delegation of public functions
Anja Beriro
14 - 17
The articles in this newsletter are for general information only. They do not represent legal advice. You
should always take legal advice before pursuing any course of action discussed in this newsletter. If you
would like to discuss any of this issues raised in this newsletter please call us +44 (0)115 976 6000.

3. 2
Last month’s referendum on the UK’s membership of the EU resulted in a decision to leave. Since then,
politicians have confirmed their intentions to press ahead with negotiations on leaving the EU, although at
this stage there is no clarity on what the new relationship would look like (for our commentary on the
options, see here). However, a claim has been issued, and a number of other arguments have been raised
which aim to challenge the Brexit process. We consider the claim issued on behalf of Deir Dos Santos, a
London hairdresser, which had its preliminary hearing on 19 July.
The claim argue that:
1. The referendum result is only advisory and there is no legal obligation on parliament to give effect to
the referendum decision.
2. Only parliament and not the prime minister can authorise the Article 50 process which will start the
UK’s withdrawal from the EU. The prime minister does not have the powers to trigger the Article 50
process without the consent of parliament by way of an act of parliament (The Article 50 process
requires that the UK triggers Article 50 by giving formal notice of its intention to withdraw from the
EU, at which point negotiations will begin and must conclude within two years unless an extension
can be agreed by all EU member states. During the process, the UK would remain a member of the EU
but after the two year period expires, unless an extension is agreed the UK leaves the EU).
This case, and the similar claim proposed by Mishcon de Reya on behalf of a number of concerned citizens,
argues that the decision to trigger Article 50 rests solely with parliament as the elected representatives of
the people. If the Article 50 process is triggered without parliamentary scrutiny, consultation with the
devolved administrations and ultimately the consent of parliament then it would be unlawful.
The case hinges on the court’s view of the powers of the prime minister and how far the royal prerogative
can be used without the consent of parliament to undermine a UK act of parliament. This is because EU law
applies in the UK by virtue of the European Communities Act 1972, and so to trigger Article 50 and start the
process of the UK withdrawing from the EU would undermine the European Communities Act 1972. Usually,
an act of parliament can only be amended or repealed by another act of parliament. We understand that the
government is advised that there is no requirement for the prime minister to have parliamentary approval to
start the process.
The exercise of the royal prerogative by prime ministers has long been an issue of contention in the UK,
primarily because there is a lack of clarity around the roles and powers of the prime minister which are based
on convention and usage but are not defined, and so the claim raises wider constitutional issues. If the court
were to determine that the royal prerogative could not be used in this manner, then ultimately parliament
would need to vote on whether the UK should leave the EU, although it is likely that given the wide ranging

4. 3
consequences for the UK, the decision would be likely to be appealed which means that it could be years
before a conclusion is actually reached. Politically, this could put the UK in a very difficult position, because
the government has confirmed its intention to press ahead with Brexit and the EU and a number of its
member states have expressed the view that the Article 50 process should begin as soon as possible. The
government’s current position is that it will not invoke the Article 50 process this year, but that may of
course change, in which case the claimants must be duly informed and allowed time to respond accordingly.
At the preliminary, during which the court named Gina Miller as the lead claimant, it was stated that the
government has no intention of invoking the Article 50 process this year (which may of course change) and
the court confirmed the full hearing will be heard in front of the Lord Chief Justice in October (exact date to
be confirmed).
So for now then it’s a case of ‘wait and see’ what happens next. We will keep you updated!
Angelica Hymers | +44 (0)115 976 6092 | angelica.hymers@brownejacobson.com

5. 4
In the lead up to any court appearance focus tends to be on the final preparations of the legal arguments;
with the preparation of the court’s bundle perhaps being seen as a more ‘administrative’ task.
However, a recent decision in the Technology and Construction Court clearly highlights the important role
bundles play in the court’s consideration and determination of hearings and provides a useful reminder to
litigants that as much care and diligence needs to be paid to their preparation as the preparation of the
‘legals’.
PM Project Services Ltd v Dairy Crest Ltd [2016] EWHC 1235 (TCC)
The relevant decision was made by Mr Justice Edwards-Stuart on considering the claimant’s application for
summary judgment in the case of PM Project Services Limited v Diary Crest Limited.
The claimant’s application was for judgment on three separate claims, two of which were supported by
witness evidence provided by the claimant’s Mr Dean. This witness statement was supported by over 750
pages of exhibited documents. Unfortunately the page references in Mr Dean’s witness statement were
different to from the page numbers in the bundle prepared for the application hearing. For example, in his
statement Mr Dean referred to a TS01 report dated 8 December 2015 which was said to appear at pages 174 –
186 of his exhibit MD6, but in the bundle the exhibits to Mr Dean’s statement did not appear until page 400.
According to Mr Justice Edwards-Stuart’s judgment, on careful consideration of the bundle there was an
index for exhibit MD6 behind each of the cover sheets, and on working his way through the index the TS01
report is shown as being at page 24. However, it in fact appeared at page 428 (not even page 424 as one may
expect) as a spreadsheet running to 4 numbered pages had been inserted immediately behind the index.
On its application notice the claimant had indicated that the application should be listed with an estimated
hearing length of three hours and suggested that the judge would require three hours for pre-reading.
However in the opening paragraphs of his judgment Mr Justice Edwards-Stuart declared that he had to
abandon his pre-reading as any constructive reading was derailed by the manner in which the exhibits to Mr
Dean’s witness statement had been paginated. At paragraph three of his judgment Mr Justice Edwards-Stuart
states:
“…After about two hours of reading the papers I concluded that the handicap presented by the pagination
would prevent the necessary amount of reading taking place before the hearing…”
Consequently, at the outset of the application hearing Mr Justice Edwards-Stuart declared that he was not
prepared to hear the second and third limbs of the claimant’s application (those supported by Mr Dean’s
witness evidence) but that he would hear the first.

6. 5
The hearing of the first claim alone took one hour and 45 minutes; showing that had Mr Justice Edwards-
Stuart embarked on hearing all three claims there was no way the hearing would have been disposed of its
allotted three hours.
After hearing the first limb of the claimant’s application, Mr Justice Edwards-Stuart refused summary
judgment on that claim and directed that the court’s bundle be returned to the solicitors acting for the
claimant so they could be corrected. He also ordered that any cost of this exercise, together with any costs
thrown away by the need to adjourn the hearing of the second and third claims, should be borne by the
claimant.
Whilst it is not unusual for parties to receive costs sanctions for the late provision of bundles, the order Mr
Justice Edwards-Stuart made in this matter demonstrates the importance place by the court on the form and
contents of bundles.
So where did PM Project Services Limited go wrong?
Requirements for the provision of Hearing Bundles
The overarching purpose of a bundle is to assist the court in its understanding and therefore disposal of an
interim application or trial. They are therefore intended to save time and costs (for both the court and the
parties) by ensuring that all relevant documents are readily accessible. Accordingly, bundles should be well
organised files of documents relevant to the interim application, trial or appeal.
Part 39 of the Civil Procedure Rules (and its associated practice direction PD39A) sets out the provisions
relevant to the preparation of trail bundles; although these rules should be followed in the preparation of all
hearing bundles.
The Practice Direction 39A states at paragraph 3 that:
“The [trial] bundles should be paginated (continuously) throughout, and indexed with a description of each
document and the page number. Where the total number of pages is more than 100, numbered dividers
should be placed at intervals between groups of documents.”
In addition to the general rules set out in Part 39 and its PD39A, specialist courts also have guides which
provide further provisions in respect of the form and contents of bundles for interim hearings, case
management conferences and trials within that specific court.

7. 6
As PM Project Services Limited had issued its claim in the Technology and Construction Court (TCC), a sub-
division of the Queen’s Bench Division, their solicitors should have ensured that the hearing bundles were
compliant with the provisions of the Queen’s Bench Guide and TCC Guide.
Paragraph 7.10.8 of the Queen’s Bench Guide emphasis the important role bundles play in the effective
disposal of interim applications and trials:
“The efficient preparation of bundles is very important. Where bundles have been properly prepared, the
claim will be easier to understand and present, and time and costs are likely to be saved. Where documents
are copied unnecessarily or bundled incompetently, the costs may be disallowed.”
While paragraph 6.5.1 of the TCC Guide sets out what needs to be included in application bundles, stating:-
“The bundle for the hearing of anything other than the most simple and straightforward application should
consist of:
 the permanent case management bundle (see Section 5.8 above);
 the witness statements provided in support of the application, together with any exhibits;
 the witness statements provided in opposition to the application together with exhibits;
 any witness statements in reply, together with exhibits.”
Paragraph 6.5.7 then expressly sets out the court’s requirements in respect of pagination, stating:-
“Pagination. It is generally necessary for there to be a paginated bundle for the hearing. Where the parties
have produced skeleton arguments, these should be cross-referred to the bundle page numbers. Where
possible bundle should be paginated right through, but this may be dispensed with where a document within
a discrete section of the bundle has its own internal pagination.”
Practical tips
With the provisions of the CPR and relevant court guides in mind, below are some practical tips for the
preparation of application and trial bundles:
 Ensure the documents appear in a logical, well ordered fashion. Generally speaking this would
include grouping documents together in accordance to type (for example witness statements, court
orders etc) and ordering them chronologically.
 Ensure that all documents are paginated consecutively and that, where there is more than one file or
volume, the numbering continues throughout.

8. 7
 When paginating the bundle use black ink, printing the number at the bottom, right of the page and
make sure that the bundle pagination is clearly distinguishable from any other pagination on the
documents being careful not to obliterate any material part of the document.
 If pages are added after pagination, then number them as “A, B, C…” and so on to avoid effecting the
continual pagination. Likewise, if pages are removed after pagination, replace them with a single
page stating that the page has been removed.
 Keep each file to a maximum of 250 pages.
 Use dividers to separate individual, lengthy documents, or categories of documents to make them
easier to find.
These tips might seem obvious, but when you are immersed in preparations for a hearing, familiar with the
documentation and arguments being run as well as trying to ensure the bundles contain ‘everything’ you and
your opponent consider to be relevant, it is easy to over complicate the format of your bundle. It is therefore
always sensible to keep in mind that the purpose of the bundle is to assist the court in its understanding of
the case and so the more simple and ‘user friendly’ the better.
Katie Scott | +44 (0)161 300 8033 | katie.scott@brownejacobson.com

9. 8
What counts if you are a non-profit organisation?
In Kent Community Health NHS Foundation Trust v NHS Swale CCG and NHS Dartford, Gravesham and Swanley
CCG [2016] EWHC 1393 (TCC) the court was asked to consider an application to lift an automatic suspension
involving two not-for-profit NHS bodies, which turned on the adequacy of damages.
This case follows the recent cases of Solent NHS Trust1
and Bristol Missing Link2
and continues the
conversation about the adequacy of damages for bodies that are ‘not for profit’, which is likely to be an
increasing area for argument as we see more and more public/private collaborations and third sector bodies
bidding for public contracts.
Key facts
Kent Community Health NHS Foundation Trust (Kent) was the incumbent supplier of adult community services
to NHS Swale CCG (Swale) in north Kent under a contract that expired on 1 April 2016. Prior to the expiry of
the contract Swale put the services out to competitive tender and both Kent and Virgin Care submitted final
tenders. Swale awarded the contract to Virgin Care on the basis that it had achieved the highest overall score
following the evaluation. The new contract is reported to be worth £128.4 million over seven years.
Kent challenged Swale’s intention to award the contract to Virgin Care on the basis that Virgin Care would
not be the best provider of the services. Kent received a higher quality score than Virgin Care in the
evaluation; but its costs were such that it did not receive the best overall score.
The judge notes that Kent provided an indicative example of how the marking had gone wrong during the
evaluation stage which he felt was valid and had not been addressed by Swale in the pre-court
communications.
Kent’s challenge of the contract award triggered the automatic suspension under Regulation 95 of the Public
Contract Regulations 2015, which Swale subsequently applied to lift.
Application of the American Cyanamid3
test
The American Cyanamid test asks three questions which must be considered by the judge when deciding
whether or not to grant an interim injunction such as retaining the automatic suspension. These are:
1. Is there a serious issue to be tried?
2. Would financial damages constitute an adequate remedy for the successful party?
1
Solent NHS Trust v Hampshire County Council [2015] EWHC 457 (TCC)
2
Bristol Missing Link Ltd v Bristol City Council [2015] EWHC 876 (TCC)
3
American Cyanamid v Ethicon Limited [1975] AC 396

10. 9
3. If damages are not adequate, does the balance of convenience favour one party?
The parties agreed that there was a serious issue to be tried and did not present arguments on this, which is
the first hurdle in the American Cyanamid case.
Kent argued that as it is a not-for-profit organisation whose overall objective as an organisation is to provide
integrated health care services across the area of Kent for public good, which it could not achieve without
this contract, therefore damages would not be an adequate remedy in this instance. It argued that the
injunction should therefore be made to maintain the suspension so that if it was successful at full trial it will
be able to enter in to a contract with Swale and achieve their objective of providing joined up services. Kent
estimated that it is set to lose 10% of its revenue if it were not awarded this contract which would impact on
the economies of scale and may impact the provision of services in other areas.
Conversely, Swale argued that its losses if a service was not fully in place for winter 2016/17 (their ‘busy’
period) could not be quantified as easily and even an expedited trial would mean a service was not likely to
be in place.
Due to the level of financial information provided as part of the tender, the judge preferred the analysis in
Solent NHS Trust to that of Bristol Missing Link. It was held that, although the resulting impact for Kent may
not be easily quantifiable, it could determine the loss directly associated with not being appointed to the
contract.
The court held that Kent’s overarching objective did not give it a monopoly on providing services, and should
not give it a priority or advantage when bidding for NHS procurements. On that basis, Kent should be treated
no differently to any other commercial bidder when considering the adequacy of damage.
The court distinguished this case from the Bristol Missing Link case by acknowledging that there were
situations when damages might not be adequate, such as actions to protect privacy or other non-financial
rights.
Conclusion
This case is significant for its rejection of the argument that damages are not adequate for bodies such as
NHS claimants with a public service objective. Subsequent claimants will need to show that financial loss
cannot be quantified, such as protection of privacy or reputational damage, rather than arguing that financial
damages do not meet the claimant’s objectives.
Interestingly the court would not comment on which might be the best provider at this stage and made no
reference Swale’s duty under Regulation 3(3) of ‘The National Health Service (Procurement, Patient Choice
and Competition) (No 2) Regulations 2013’ which requires it to take services from a provider who is ‘most

11. 10
capable’ of providing the service. It will be interesting to see how this is followed and the potential impact of
the decision on future tenders, especially in light of the apparently high score awarded to Kent for the
quality elements of the tender evaluation process over price.
Jennifer Grigg | +44 (0)1392 458773 | jennifer.grigg@brownejacobson.com

12. 11
The current government is committed to substantially increasing housing supply within the UK. As a result
local planning authorities (LPAs) have come under increasing pressure to authorise development. When
combined with reducing budgets, significant resistance to new housing schemes from existing residents and
pressure from developers to approve applications without delay it can be difficult to effectively consider
complicated areas such as Sustainable Urban Drainage Systems (SUDS).
However SUDS are an increasingly important consideration, especially when the extreme flooding events in
recent years are taken into account. The creation of further impermeable surfaces such as roads, pavements
and roofs in a new development increases the amount of surface water flowing into drains and sewers. This
adds to the risk and severity of flooding.
SUDS are one way of reducing the risk of flooding caused by a new development. They are something which
LPA's are required to consider. However they are not something which all planning officers have much
experience of. Failure to consider SUDS accurately could lead to increased risk of challenge and localised
flooding issues.
SUDS
SUDS are ways of collecting surface water run-off and releasing it slowly, rather than discharging it all
straight into the public sewer system. They are designed to mimic the way that surface run-off would have
occurred if the land had not been developed. These include:
 ponds
 ditches
 green roofs
 soakaways
 permeable paving or road surfaces.
LPA requirements to consider SUDS
In November 2014, a ministerial announcement stated that the government wished to make better use of the
planning system to secure SUDS. It stated that the government's expectation is that SUDS will be provided in
new developments wherever this is appropriate. It also stated that LPAs should consult the relevant lead
flood authority on the management of surface water, satisfy themselves that the proposed minimum
standards of operation are appropriate and ensure through the use of planning obligations that there are
clear arrangements in place for the ongoing maintenance of SUDS over the lifetime of the development.
In addition SUDS should be designed to ensure that the maintenance and operation requirements are
economically proportionate.

13. 12
In order to give effect to the above, the Planning Policy Guidance (PPG) was amended. The LPA is required to
give priority to the use of SUDS in areas that are at risk of flooding (see the National Planning Policy
Framework (NPPF) paragraph 103 and the PPG paragraph 51).
The PPG at paragraph 79 requires SUDS to be provided in any major development unless it is demonstrated to
be inappropriate to do so. Regulation 2 of the Town and Country Planning (Development Management
Procedure) (England) Order 2015 (SI 2015/595) defines this as development of 10 houses or more or the floor
space created by the development is 1,000 square metres or more.
What does this mean for LPAs?
Key for LPAs is gathering the necessary information and analysing it. LPAs must also ask themselves the right
questions. SUDS come in many forms and ensuring that they are appropriate can be a time consuming and
difficult process. If the developer engages with the LPA pre-application, then efforts should be made to
ensure that the developer has commissioned the necessary reports to allow the LPA to understand the flood
risk and the use of SUDS. This will ensure that the LPA has the maximum amount of time to fully consider the
issue.
Once an application has been submitted, the LPA will need to consider any reports provided on SUDS and
flood risk. This will include the flood risk assessment and the surface water management strategy.
LPAs may need to request further information and clarification from developers. This should be done as soon
as possible into the application process.
In addition the LPA may consult various bodies including the Lead Local Flood Authority, the Environment
Agency, the Highways Authority, the Internal Drainage Board and the local drainage company.
The LPA will need to ensure that it adequately considers the use of SUDS if it is to avoid challenge. In
particular it will need to consider (and demonstrate that it has considered):
 whether using SUDS is reasonably practicable and appropriate
 the required capacity of SUDS. LPAs will need to consider the lifespan of the SUDS and the predicted
effect of climate change
 the ongoing maintenance of SUDS (for example they may be adopted, or the responsibility of a
residents management company).
The LPA will also need to consider construction standards. The Environment Agency has published technical
guidance which LPA's can use as a guide to what constitutes that which is reasonably practicable and/or
appropriate for SUDS.

14. 13
The Welsh Government has also published national standards and guidance of the design, construction,
operation and maintenance of SUDS serving new developments in Wales.
SUDS are to a large extent an engineering consideration. Accordingly LPAs may wish to consider employing or
retaining the services of a specialist drainage engineer.
Practical issues
SUDS are a complicated area which LPAs are required to consider. Whilst some planning officers will be
unfamiliar with precisely what is required, we recommend addressing the issues early on. Efforts should be
taken to engage with the issues raised early in the planning process, preferably pre-application. This will help
to ensure that the necessary evidence is available to the LPA to make a fully informed decision.
In order to reduce costs, the LPA should not be afraid of requiring additional information and evidence from
developers. LPAs should also require that reports are produced by a reputable source to provide greater
confidence that the information provided can be relied upon. Thought should also be given to co-instructing
experts at the expense of the developer.
Asking the right questions to statutory consultees early on in the process, and utilising freely available
guidance from bodies such as the Environment Agency can also save the LPA time and expense.
Experience from other sites should also be utilised. Having an effective way of sharing knowledge and
expertise internally can reduce costs and increase efficiency.
For more complicated sites it may be more efficient to independently engage flooding and drainage experts
to ensure that the LPA is able to reach a reasoned decision.
It is important to remember that whilst there is a lot of assistance available, SUDS can be a complex area
which take time to resolve to resolve. Ensuring that a structured approach is taken will ultimately reduce
costs for the LPA and is likely to sustainably reduce the risk of flooding.
Ben Standing | +44 (0)115 976 6200 | Ben.Standing@brownejacobson.com

15. 14
A recent Advocate General’s (AG) opinion looks at the redistribution of public functions and whether that
exempts certain arrangements from the public procurement regime. The case involves the City and Region of
Hannover (two separate public authorities), a ‘special purpose association’ and Remondis, a large waste
management company (Remondis GmbH & Co KG Region Nord v Region Hannover (Case C 51/15), 30 June
2016). The Higher Regional Court of Celle, Germany requested a preliminary ruling from the ECJ over the way
in which member states’ power of reorganisation interacts with EU rules on public procurement. The court
was asked whether such an operation is a public contract. If so, is it then exempt of the EU public
procurement law due to exception of the ‘in house’ rule shown in Teckal? This case was brought under the
2004 Directive so the Teckal exemption had not yet been codified.
The dispute arose through Remondis questioning the lawfulness of the City and Region of Hannover
transferring their responsibilities to the special purpose association to manage and dispose of waste without
having awarded it a competitively tendered contract.
Before the formation of the special-purpose association, the Region of Hannover and Hannover City were
entrusted with waste management and disposal under the regional laws of Lower Saxony. This legislation
allowed for special purpose associations to be established to provide such services. The special purpose
association in question was established in December 2002. The special purpose association is regarded as a
public-law corporation under the articles of association and takes the places of the Region and City of
Hannover as the public-law entity responsible for waste management and disposal in those geographical
areas.
The articles of association require the Region and City of Hannover to transfer their assets that originally
preformed waste management and disposal along with 94.9% of shares in the Region of Hannover Limited
company for waste management (known as ARH) to the special-purpose association. The articles of
association also require for the expenditure of the special-purpose association to be covered by its revenue,
and if this is not possible, for the two local authorities to pay contributions. Documents shown before the
court proved that the special-purpose association and ARH jointly generated a turnover of EUR 189 020 912,
and 6% of which (EUR 11 232 172) came from commercial transactions with third-parties.
Remondis made an application for review to the Public Procurement Board due to the size of the turnover
derived from activities involving third parties distinct from its two members. In this application, Remondis
claimed that the conditions which allow for a call of tenders not to be made on the basis of an ‘in house’
award in line with the judgment in Teckal were not met. As a result of this, they claimed that the role of
waste management and disposal be returned to the Region and City of Hannover. The application was
dismissed by the Public Procurement Board, so Remondis brought the matter to the referring court and tried

16. 15
for an annulment of the dismissal. Before this court they claimed that the creation of the special-purpose
association and transfer of tasks to it constitutes a public contract, whilst the Region and City of Hannover
and the special-purpose association dispute this by claiming that in fact the creation of the association and
transfer of tasks does not fall within the range of public procurement laws because its creation and transfer
were founded on a statutory decision, not an agreement or administrative contract.
The referring court pointed out four aspects which embody the operation in question: firstly that the moving
of tasks involves services within the meaning of Directive 2004; secondly that transfer is effected for
consideration; thirdly that the special-purpose association engages in more activities then assigned to do; and
lastly that the transfer of tasks does not belong to ‘the two types of contracts’ that come under EU public
procurement law.
The AG confirmed that a public contract was defined as a contract for monetary purposes between an
economic operator and a contracting authority with the object being the doing of a job, supply of products or
provision of services. Even if an operation is not regarded as a public contract in German law, it can be in
classed as one in EU law. The wording of the definition of a public contract is key, with the reference to a
contract of monetary/pecuniary interests showing specifically that there is legal binding obligation on the
public authority to pay a particular price to the contractor who must deliver a specific service. It is clear that
the case-law says that the internal organisation of the state does not fall under EU law, and each member
state is free to delegate/exercise power as it sees fit. The case law is also consistent with the fact that the
EU must respect key state functions, and it can be assumed that includes a state’s internal self-organisation.
In a similar case to this one involving Germany (known as the Hamburg Waste case), the ECJ stated that EU
law cannot undermine the division of competences between regional authorities due to the EU having to
respect the national identity of member states (including regional and local self-government). When a public
authority makes a transfer of particular public powers to another public entity this constitutes an act of
internal reorganisation of a member state, so falls outside of EU laws about public procurement. So a transfer
of power by a public entity does not classify as a public contract as understood in the definition shown
previously. Therefore it cannot come under EU laws on public procurement.
Since each member state is given the freedom to choose how they structure their internal organisation of
functions and therefore the transfer of power, this falls outside of the scope of the rules for EU law. The two
different forms of transferring power are vertical and horizontal, with the first being when power is given
from an authority to a smaller organisation (Teckal) and the second form being when several regional
authorities come together to create a common structure on how to operate the powers (the Hamburg Waste
exemption).
However, this transfer of responsibility from one public body to another is slightly different. There are
several requirements/characteristics that the court has laid out that an authority should meet/show if it is
undergoing a transfer of power. Firstly it should be a comprehensive relinquishing of the particular powers,

17. 16
which allows the entity receiving the powers the full responsibility to perform the task. Secondly the
authority must not be allowed to interfere with the power receiving entity. Thirdly the entity must have full
financial independence from the authority giving the powers. Therefore a full decision will have to be made
on whether or not the transfer of powers in this case was genuine by meeting the requirements laid out
above by the court. If it was a full transfer of powers then it will not come under the rules of public
procurement.
On the facts at hand the AG was comfortable that the order of reference that the creation of the special-
purpose association was a genuine transfer of power from the Region and City of Hanover, due to the fact
that it fully relinquished its powers and responsibilities in waste disposal. Firstly we know this because the
special-purpose association acts ‘under its own responsibility’ so is now independent from the Region and
City of Hanover. Secondly, because the special-purpose association received the assets that the public
authorities used to perform the task previously. It is shown that in a transfer of powers the new entity should
be provided with all the resources needed to complete it, so clearly one has taken place. Next the fact that
there is a statutory financial guarantee of solvency in place if the special-purpose association is unable to
cover its costs does not suggest it lacks financial autonomy, because it is only in place as a protection method
that shows respect of the exercise of public service being provided.
Remondis called into question the overall freedom of the special-purpose association by showing that at the
general meetings of the association there are members of the Region and City of Hannover present. This
would suggest interference, yet it is shown in the articles of the association that the powers of the general
meeting are not about the actual performance of waste management and disposal, and instead are focused
on the political side of things; although the court must decide whether it has full autonomy on everything
else without the permission of the Region or City of Hannover.
This opinion is very relevant due to the ability of local authorities (and other public bodies) in England and
Wales to delegate their functions to other public bodies. A key example of this is under section 101 of the
Local Government Act 1972 and section 9EA of the Local Government Act 2000. Both of these sections
provide for functions of a local authority to be delegated to another local authority, either at council or
executive level. This legislation does not, by itself, exempt the arrangements from the public procurement
regime so it is necessary to look at the additional requirements set out in case law such as this AG’s opinion
and the European Commission’ staff working paper looking at the effect of the EU rules on relations between
contracting authorities (the Working Paper)4
.The Working Paper recognises the ability of public bodies to
achieve public to public cooperation without bringing into play the PCR through a genuine delegation of
functions.
4
http://ec.europa.eu/DocsRoom/documents/14713/attachments/1/translations

18. 17
Therefore, when considering a delegation that will exempt the arrangement from the public procurement
regime, a local authority or other public body must be willing to give up control of how that function will be
performed. This is not always palatable, to elected members in particular, and there is a risk of anything less
than this being challenged. We have worked with local authority clients to look at getting the correct balance
between allowing the day to day delivery of the functions to be carried out by another local authority while
ensuring that certain minimum standards and requirements are achieved.
Anja Beriro | +44 (0)115 976 6589 | Anja.Beriro@brownejacobson.com