Katherine Apps KC and David Sawtell have co-authored the paper ‘PFI Handback – Identifying Potential Disputes'

For over 20 years, PFI was used in the UK to procure, finance and operate numerous public infrastructure projects.  Many of the original contracts are nearing their 25-30 year expiry date, raising important practical and legal consequences for what comes next.  This is increasingly the subject of public discussion and debate following the UK Infrastructure and Projects Authority commissioned White Frasier Report published in July 2023.

It has been anticipated that PFI handback could cause operational disruption, lack of service continuity, and increased costs. Many commentators have also predicted that PFI expiry will lead to numerous disputes.

What has not been analysed in any significant detail, however, is the form that these disputes are likely to take, arising out of both private and public law. In this paper, Katherine Apps KC and David Sawtell look at the potential sources of disputes that could arise from the process of PFI handback.

The paper considers the following issues.

• History of PFI in the UK;
• The contractual structure for PFI handback;
• Disputes over the implications of long-term estate management;
• The impact of decarbonisation and Net Zero policies;
• The limitations imposed by procurement law and subsidy control;
• Potential issues arising from staffing of the facilities management contracts;
• Judicial Review risks;
• Decision making – whose choice is it at handback?

The paper concludes that PFI contract expiry and handback pose significant challenges for public authorities, Project Cos and their professional advisors. Those involved with PFI contracts will need to prepare for these challenges and the consequent dispute resolution which may become necessary, in good time before the handback date.