The revision of the 2014 public procurement Directives is underway, and it seems it is going to substantively change the way we procure, but also what and from whom we can procure. But it was surprising to see that it was decided to exclude the Remedies Directive from this round of revisions.

Fortunately, this does not preclude us from examining the primary challenges of the Remedies Directive and the remedies procedures across the Member States, and proposing directions for future revisions.

An appeal fees are at the top of my list.

The original goal of appeal fees was to ensure the ‘seriousness’ of the appellant and to reduce the number of frivolous appeals. So, the appellant would pay a fixed sum or a percentage of the procurement value. If the appeal was successful – it would be returned. And if not – the appellant would lose the appeal fee.

Over the years, the original purpose and intention behind appeal fees have undergone significant changes (at least in some Member States) and have evolved into a mechanism for restricting the use of public procurement remedies.

Croatia has recently substantially increased the appeal fees, which has caused a significant drop in the number of submitted appeals. Some Member States have appeal fees (Croatia, Slovenia, Romania, Czechia, Hungary), some do not (France, Spain). In some Member States, appeal fee amounts are mostly fixed (Finland), and in some, they are determined as a percentage of the estimated procurement value (Croatia, Czechia, Romania). In some Member States, appeal fees are relatively cheap (Finland – 4,800 EUR or 7,300 EUR, Denmark – 10,000 or 20,000 DKK), and in others, they are (prohibitively) expensive (Croatia – up to 66,000 EUR, Czechia – up to 10,000,000 CZK, which is approximately 400,000 EUR).

These varying approaches are caused by national public procurement law specificities, but also by varied views and opinions on what should appeal fees represent, and should they even exist.

The issue of appeal fees is significant because public procurement remedies in every Member State are primarily supplier-based. This means that economic operators play a crucial role in ensuring the legality of public procurement procedures. If these operators are deterred from using remedies due to high appeal fees, then national remedies may become ineffective and may not comply with Article 1 of the Remedies Directive.

My recommendation is that we thoroughly examine appeal fees during the revision of the Remedies Directive and determine a uniform approach. We should either eliminate appeal fees or establish a standardized scale based on the estimated procurement value, similar to the Finnish and Danish models. This would restore the original function of appeal fees, which is to ensure the seriousness of the appellant. If we continue to permit the use of appeal fees as a deterrent to seeking legal remedies, we risk enabling the erosion of the rule of law and increasing the potential for corruption in public procurement. Unfortunately, the situation in Croatia exemplifies the negative impact of prohibitively expensive appeal fees;

Open access paper on Croatian appeal fees

 

 

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