Post award modifications: Analysis of the “Modifications Claim” in TNLC v The Gambling Commission [2026] EWHC 891 (TCC)

Nicola Sumner and Beatrice Wood consider a recent judgment on claims in relation to the conduct of the procurement process (the “Process Claim”).

This article considers the recent judgment in The New Lottery Company Limited v The Gambling Commission and Allwyn Entertainment Limited and others [2026] EWHC 891 (TCC), which included claims in relation to the conduct of the procurement process (the “Process Claim”) and a challenge to post award modifications made to the Fourth UK National Lottery Licence (the “Modifications Claim”).

The procurement was conducted under the Concession Contracts Regulations 2016 (CCR 2016), and the Court’s analysis focuses on Regulation 43 CCR 2016.

Although the case arose in the context of the CCR 2016, the judgment provides guidance on the assessment of post award contract modifications which is of wider relevance to contracting authorities operating under the Public Contracts Regulations 2015 (PCR 2015) and the Utilities Contracts Regulations 2016 (UCR 2016) (and potentially under older contracts procured pursuant to the previous procurement regimes). In particular, the Court clarified the correct approach to assessment of substantiality, economic balance, burden of proof and the limited role of the unforeseeable circumstances safe harbour.

This article focuses on the Court’s treatment of the Modifications Claim only. Look out for our article to follow on the Process Claim.

Background

The proceedings arose out of the procurement for the Fourth UK National Lottery Licence (“Competition”), which was run by the Gambling Commission under the CCR 2016. The Licence was awarded to Allwyn in 2022.

Following award, a number of changes were made to the Licence and associated enabling arrangements during the implementation phase. Those changes were introduced in response to delays caused by litigation brought by rival bidders during 2022 and 2023, rather than as a result of any fault on the part of Allwyn.

The New Lottery Company Limited (TNLC) challenged both the conduct of the Competition and the legality of the post award changes. Allwyn and others were involved as “Interested Parties”.

The Modifications Claim – Key Points of Interest

Although the Court ultimately held that the Modifications Claim was time barred, it went on to consider the substance of TNLC’s claim in detail. Its assessment of Regulation 43 CCR 2016 provides valuable guidance for authorities managing post award changes.

The result is a clearer roadmap for contracting authorities considering complex post award modifications whether under CCR 2016, PCR 2015 or UCR 2016 modification rules.

Treatment of the Caselaw: Clarifying the Regulation 43 Framework

The Court began by carefully situating Regulation 43 within existing EU derived as well as domestic procurement caselaw, drawing in particular on Pressetext[1], Edenred[2], Bechtel[3] and James Waste[4], and resolving points of uncertainty that had emerged from first instance decisions.

The Court grounded its views in the purpose of the regime, which it stated is not to prevent all post award change, but to prevent distortions of competition or the conferral of an unfair advantage on the incumbent concessionaire. Modification rules exist “to prevent contracting authorities from undermining the integrity of public procurement procedures”[5].

The Court treated Regulation 43 as operating through distinct safe harbours, each of which must be analysed separately. The following two modification routes were assessed in detail:

• Regulation 43(1)(e): non substantial modifications, assessed by reference to Regulation 43(9).
• Regulation 43(1)(c): unforeseeable circumstances.

In relation to the Modifications, the following key points are key:

(a) “Substantiality” is the primary question when assessing modifications

Consistent with Pressetext, the Court confirmed that the primary inquiry should be whether a modification is “substantial” within Regulation 43(9). A modification that is not substantial within Regulation 43(9) can proceed under Regulation 43(1)(e) without needing to satisfy any other safe harbour.

Helpfully, the Court confirmed that the concept of a “substantial” modification under CCR 2016 is not materially different from a “material” variation under prior EU case law (including Pressetext and Edenred), therefore, earlier authorities on material variation remain directly relevant.

Impact on the Modification Claim

The Court deemed the Modifications to be not substantial, meaning that Regulation 43(1)(e) could be lawfully relied upon.

In doing so, there was some useful discussion on the applicability of Regulation 43(9)(b) (i.e. the regulation within the CCR 2016 which sets out when a modification should be deemed “substantial”).

In broad terms, a modification will be substantial if it renders the contract materially different in character, alters its scope, shifts the economic balance in favour of the contractor, or introduces conditions which (had they formed part of the original procurement) would have affected who could bid or which bid would have been accepted.

The Court assessed two of these aspects in particular:

• Regulation 43(9)(b), which is concerned specifically with that last category: whether the modification would have distorted competition by changing the outcome of the original award process.
• Regulation 43(9)(c), which is concerned with whether the modification changed the economic balance of the concession contract in favour of the concessionaire, assessed by comparing the contract as originally concluded with the modified contract as a whole.

(b) Regulation 43(9)(b)(ii): resolving the burden of proof debate

Regulation 43(9)(b)(ii) was a particular focus of the Court. This was because the claimants argued that the Modifications introduced conditions which, had they been part of the initial concessions contract award procedure, would have allowed for the acceptance of a tender other than that originally accepted.

The Court resolved a live debate on the correct standard of proof under Regulation 43(9)(b)(ii). Aligning itself with Pressetext and Edenred, and expressly rejecting the contrary obiter reasoning in James Waste, the Court held:

• the burden lies on the challenger; and
• the challenger must establish on the balance of probabilities that the modification “would have” allowed the acceptance of a different tender (i.e. not “might have”).

The Court stated that the “real prospect” test from obiter[6] in James Waste is inconsistent with the language of the Regulation and would improperly dilute the protection against hypothetical or speculative claims.

Impact on the Modification Claim

Once the Court determined that the correct legal test was the balance of probabilities, the claimant’s case collapsed. The claimant had expressly relied on a “real prospect” formulation and was unable to show:

• how any bidder’s tender would have changed;
• how that change would have displaced Allwyn’s winning bid; or
• why Camelot, in particular, would have overtaken Allwyn’s aggregate score.

Generalised assertions that “financial models would have changed” were treated as purely speculative, falling well short of the Pressetext/Edenred standard. Even assuming a lower threshold were correct, the absence of concrete evidence meant the claim would still fail.

(c) Regulation 43(9)(c): economic balance requires a holistic assessment

Following Edenred and James Waste, the Court reiterated that a change in “economic balance” required more than identifying a benefit to the contractor in isolation. The correct approach is to:

• compare the contract before and after modification;
• consider the contract as a whole;
• assess whether the allocation of risk and reward has shifted in favour of the concessionaire; and
• consider relevant factual context, including why the change was made.

Crucially, the Court held that factual context is admissible and relevant, endorsing the practical, nonformulaic approach taken by Fraser J in Bechtel in this regard.

Further, the economic balance comparison should be conducted from the objective perspective of a reasonably well informed and normally diligent tenderer (RWIND). Through this lens, in cases where a contract already contains provisions anticipating a particular outcome, a later modification producing the same result may not necessarily alter the economic balance, regardless of the contractual mechanism used to achieve it.

Impact on the Modification Claim

The Court assessed (through the RWIND lens) each category of modification made, and then the package as a whole:

• Two year extension: The Court held that this modification was discretionary, conditional, and directed at mitigating delay related losses. It did not alter surplus sharing mechanisms, risk allocation or contribution structures. Increased revenue potential did not equate to a shift in economic balance.
• Implementation delay/initial functionality: The Court found no net advantage, as the change closely aligned with mechanisms already contemplated by the original contract and accompanied by increased controls and delayed cost recovery.
• Recoverable Implementation Costs (RICs) recovery: Legitimate implementation costs were always intended to be recoverable under the original bargain. The modification simply preserved that position while pushing recovery to later milestones, meaning Allwyn waited longer to be reimbursed and bore additional financing costs. The Court agreed that this modification preserved, rather than improved, the original risk / reward balance.
• Cost caps and timing changes: The Court characterised these changes as sensible, proportionate mechanisms to address the consequences of external disruption. They were designed to manage uncertainty and mitigate the consequences of delay, not to improve the concessionaire’s underlying risk / reward position or generosity of the contractual bargain.

The Court rejected the claimant’s attempt to isolate favourable features while ignoring countervailing disadvantages. Echoing Edenred, the Court held that numerical benefit does not necessarily equal economic imbalance: the assessment must be holistic.

Against that backdrop, the Court then turned to the separate question of whether the modifications could nevertheless be justified under the distinct safe harbour for unforeseeable circumstances.

(d) Regulation 43(1)(c): unforeseeable circumstances should be interpreted narrowly

Drawing on Edenred and EU principled interpretation, the Court confirmed that the safe harbours in Regulation 43 must be interpreted narrowly, and that Regulation 43(1)(c) (unforeseeable circumstances) is a derogation, not a default that public authorities can rely on.

A key issue was the level of detail required for circumstances to be “unforeseeable”. The Interested Parties (in defence of the Gambling Commission) argued that unforeseeability must extend to the precise causes, scale and combination of events giving rise to the modification, relying on Salt International[7].

The Court rejected that approach. Salt International turned on a materially different statutory test and highly fact specific circumstances, and did not assist in construing Regulation 43(1)(c).

Instead, the Court emphasised the wording of the Regulation itself: the question is simply whether the need for modification arose from circumstances a diligent contracting authority could not have foreseen. That assessment is fact specific but, importantly, foreseeability should be assessed by reference to applicable circumstances in their substance, not their precise form. In other words, an authority cannot rely on a lack of foreseeability simply because events unfolded in an unusual or particularly aggressive way.

The question was whether the risk of that kind of disruption could reasonably have been anticipated, not whether the authority could predict precisely how (or by whom) it would materialise.

Impact on the Modification Claim

Although unnecessary given the finding on substantiality, the Court went on to hold that the Gambling Commission could not rely on Regulation 43(1)(c) because the core drivers of delay (hard fought litigation, suspension risk and difficult transition negotiations) were foreseeable in substance at the time of award.

However, this finding did not affect the outcome: because the modifications were deemed non substantial under Regulation 43(1)(e) and Regulation 43(9), the claim failed regardless.

Our key takeaways for contracting authorities

The judgment offers several clear and practical lessons for authorities managing post award modifications:

• Sensible contract management is not penalised: If a modification does not distort competition or alter the original risk / reward bargain, Regulation 43(1)(e) may be available without needing to engage with other modification limbs at all.
• Courts will not entertain counterfactual speculation: Contracting authorities are not required to defend modifications against abstract assertions that bids might have looked different. Regulation 43(9)(b) requires evidence of what would have changed.
• Economic balance is assessed holistically: The Court endorsed a pragmatic, whole contract assessment, rejecting attempts to isolate apparent benefits while ignoring countervailing disadvantages or increased controls.
• Context works in the authority’s favour: Where changes respond to genuine external disruption (litigation, suspension risk or transition delay) the reasons for the modification form part of the legal analysis.
• Built in flexibility is helpful: Clearly drafted mechanisms for delay, partial implementation and cost recovery significantly strengthen a modification defence, particularly where they were advertised to all bidders in the original procurement. documents.
• “Unforeseeability” is not a safety net. Regulation 43(1)(c) is a narrow derogation. What matters is whether the risk itself was foreseeable in substance, not whether the authority could predict exactly how, when or by whom it would play out.

Overall, this judgment provides welcome reassurance for public authorities when modifying public contracts, particularly where authorities preserve the original bargain, act transparently, and can evidence their reasoning. Although decided under the CCR 2016, the Court’s reasoning provides clear guidance of wider relevance to post award modifications under the PCR 2015 and UCR 2016, reflecting the shared EU law foundations of the modification regimes.

Beatrice Wood is an Associate and Nicola Sumner is a Partner at Sharpe Pritchard LLP.

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[1] Case C-454/06, Pressetext Nachrichtenagentur v Austria

[2] Edenred v HM Treasury [2015] EWHC 90 (QB)

[3] Betchel Limited v HS2 Limited [2021] EWHC 458 (TCC)

[4] James Waste Management LLP v Essex County Council [2023] EWHC 1157 (TCC),

[5] Paragraph 897 of the The New Lottery Company Limited judgment.

[6] In James Waste [2023] EWHC 1157 (TCC), Waksman J accepted that requiring proof that a claimant would have won a hypothetical re run competition might be unrealistically demanding, given that bids would inevitably have differed and the modified terms had never been bid against. He therefore reasoned (obiter) that, for the PCR 2015 equivalent, it was sufficient to show a “real prospect” (rather than proof on the balance of probabilities) that a different tenderer would have been successful, in order to guard against real (not purely hypothetical) distortion of competition

[7] Salt International Ltd v Scottish Ministers 2016 SLT 82 (“Salt International”), a case in which it was alleged that there had been a breach of the Public Contracts (Scotland) Regulations 2006 (“the 2006 Regulation”) (a predecessor provision of Regulation 32 of the PCR 2015).