A deputy High Court judge has refused the Home Office’s request to lift a legal freeze on its new contract for aircraft that watch small boats crossing the English Channel. The incumbent supplier, PAL Aerospace, says the winning bid should have been thrown out. Its current contract is due to end on 30 November; the trial starts on 7 December.
The Home Office cannot sign its new contract for aerial surveillance of Channel small-boat crossings until a court has decided whether the competition was run lawfully. In PAL Aerospace Limited v Secretary of State for the Home Department [2026] EWHC 2786 (TCC), Jonathan Acton Davis KC, sitting as a deputy judge of the High Court’s Technology and Construction Court, refused the department’s application to lift the automatic suspension that stops a contract being signed while an award is under challenge. He also ordered an expedited trial, now listed to begin on 7 December 2026.
The contract is for what the judgment calls the “Strategic Intelligence Surveillance and Reconnaissance Special Missions Aircraft Management Service”. According to the judgment, the system “provides surveillance by air of the crossing of small boats carrying migrants (usually asylum seekers) from mainland Europe to the UK”, and the information is used by the Border Security Command, HM Coastguard and other partners (judgment, para. 6). The Home Office chose DEA Aviation Limited as the winning bidder. PAL Aerospace, the Canadian company that currently flies the service, sued on 17 July 2026.
The judge announced his decision at the end of the hearing on 15 October and gave written reasons later. The judgment records that it was made available to the parties on 23 October and is dated 29 October 2026. It is heavily redacted under a confidentiality order, so the prices, the number of bidders and much of the evidence are blacked out.
What mainstream coverage misses
The dispute has had almost no coverage outside the specialist legal press. Law360 reported the lawsuit on 11 August 2026 and described it as a challenge to a £100 million tender; RSN has not been able to confirm that figure from a published contract notice, and the judgment redacts every price. RSN’s searches found no national news report of the October ruling.
Three points stand out from the judgment itself.
- The timing is tight. The judgment says PAL’s existing contract “is due to expire on 30 November 2026” (para. 8). The trial begins a week later. The rest of that sentence in the judgment is redacted, and the public version does not say how Channel air surveillance will be covered in the gap.
- The Home Office was slow to ask. PAL issued its claim on 17 July. The judge noted that the Home Office’s application to lift the suspension “was not issued until 17 September 2026” (para. 8), two months later.
- The department’s evidence did not persuade the court. The judge found “insufficient evidence” that the Home Office would suffer harm that money could not repair (para. 44), and was not convinced that a procurement dispute had any causal link to the dangers of small-boat crossings (para. 42).
Background: from one plane to a long-term contract
PAL Aerospace, based in St. John’s, Newfoundland, has flown surveillance over the Channel for the Home Office since 2023. The aviation trade outlet ch-aviation reported that a single PAL-operated DHC-8-Q300 maritime patrol aircraft, registration C-GFMX, had operated in the UK “since July 2023” from Lydd airport in Kent, and that the Home Office planned to double the fleet to two aircraft at a cost of £34 million, with the second plane expected in spring 2025.
Government contract records show an award of similar size. A Contracts Finder award notice published on 25 November 2024 shows the Home Office awarding PAL Aerospace a “Strategic Fixed-Wing Intelligence, Surveillance & Reconnaissance (ISR) Service” worth £33,926,306. The notice lists the procedure as a “negotiated procedure without prior publication”, meaning it was not openly advertised, and gives a contract period of 29 October 2024 to 31 January 2026. The judgment’s expiry date of 30 November 2026 suggests that arrangement was later extended; RSN has not found a published notice of the extension.
The long-term competition now in dispute has been in the works since at least 2023. An early market engagement notice of 27 April 2023 invited solutions “based on RPAS and/or Piloted Aircraft Systems”, that is, remotely piloted drones, crewed aircraft, or both. It set a minimum sortie length of 16 hours and up to “approximately 4000-5000 hours per annum” of flying, for a contract of 36 months. A June 2025 pipeline notice on the government’s Find a Tender service described the aim as a service “to replace current interim capability and ensure continued comprehensive coverage of irregular marine activity, and collection of evidential footage to support prosecutions.”
The stakes are not abstract. Home Office figures show 33,374 small boat arrivals in the year ending June 2026, 23% fewer than the 43,309 recorded in the year ending June 2025. Small boats accounted for 88% of all detected arrivals by illegal routes in that period.
RSN has covered this ground for a decade, from the 2015 European migration crisis to the “Jungle” camp at Calais in 2016, when lorries and ferries rather than dinghies were the main route. More recently we reported on the end of the UK-France returns pilot and on what Britain’s falling asylum backlog conceals.
Deep dive: what the court decided and why
The rule being applied
Under Regulation 95 of the Public Contracts Regulations 2015, a legal challenge to a contract award automatically bars the public body from signing the contract until the court lifts the bar or the case ends. Those regulations were replaced by the Procurement Act 2023 from 24 February 2025, but they still govern competitions that began under the old rules, which is why the judgment applies them here.
To decide whether to lift the bar, a court asks four questions, set out at paragraph 15 of the judgment: is there a serious issue to be tried; would money damages adequately compensate the challenger if the contract went ahead and the challenger later won; would damages adequately compensate the public body if the freeze stayed and the public body later won; and, if in doubt, which course carries the least risk of injustice (the “balance of convenience”). It was common ground that there was a serious issue to be tried (para. 18).
PAL’s complaint
The judgment explains that PAL lost on price. The Home Office’s tender documents drew a distinction between “manned” and “unmanned” solutions (para. 12). PAL’s case, as summarised by the judge, is that the price gap arose “because DEA was permitted to submit an allegedly non-compliant bid which should have been excluded by the Home Office on the basis of its requirements” (para. 13). PAL says the claim turns on “a short point concerning the interpretation of the tender documents”. In the alternative, it argues that the requirements were not transparent enough for bidders to know whether DEA’s type of solution was allowed (para. 29).
These are allegations. No court has yet ruled that DEA’s bid was non-compliant or that the Home Office broke procurement law. The public judgment does not say what aircraft DEA proposed, and the relevant passages are redacted.
Why money was not enough for PAL
Most of PAL’s argument on this point is blacked out. What survives shows that it relied on a witness statement from a Mr Turner about the effect on PAL of losing the contract. The judge wrote: “I agree with Mr Williams KC that there is no real answer to it. That is sufficient for me to determine this issue in favour of PAL” (para. 39). He concluded there was “a real risk that damages would not be an adequate remedy” for the company (para. 40). He also noted that the Home Office did not argue that any breach was too minor to justify damages (para. 31).
Why the Home Office’s case fell short
The Home Office relied on a line of cases holding that when a public body cannot deliver a service the way it has chosen, that loss usually cannot be repaired with money (para. 41). Its counsel pointed to the Cranston Inquiry, which examined the deaths of more than 30 people in the Channel on 23 to 24 November 2021, to emphasise the danger to life of small-boat crossings.
The judge accepted the gravity of the subject but not the connection: “Whilst recognising the importance of such matters, it is difficult to see any causative link between a procurement challenge and such crossings which might lead to an award of damages” (para. 42). He described the department’s witness evidence, from a Mr Kitching, as “expressed in general terms”, quoting its claim that the freeze prevented the Home Office “from realising operational, financial and public value benefits which cannot be recreated or adequately compensated after the event” (para. 43). His conclusion: “Broadly, there is insufficient evidence for me to conclude that damages would not be an adequate remedy for the Home Office, particularly where a speedy trial in December can take place” (para. 44).
The department also argued that a fast trial would strain its staff. The judge was not moved: “As I said at the hearing, the pressures on the Home Office are well-known. The Court is sympathetic. However, much of the work on this case will be done by outside lawyers” (para. 46).
The winning bidder
DEA Aviation took part as an interested party and supported the Home Office. Its evidence described difficulties recruiting staff and an impact on its business if the contract slipped into 2027. The judge found that both points “are met if a trial takes place in December” (para. 47).
The balance of convenience
The judge rejected the Home Office’s claim that PAL’s timetable for a quick trial was unworkable, and held that keeping the freeze was the safer course: “That course avoids the risk that the public purse will have to pay twice, once to the appointed service provider, and once in damages” (para. 51). The Home Office’s counsel had accepted that an expedited trial should follow if the suspension stayed (para. 53).
RSN analysis: The “pay twice” point is the one taxpayers should notice. If the Home Office had been allowed to sign with DEA and PAL later proved the bid should have been excluded, the public would have funded both the new contract and a damages award to the company wrongly passed over. A short delay to let a court settle a narrow question of tender wording is, on the judge’s reasoning, the cheaper risk.
The case for the Home Office
There is a fair argument on the other side, and the judgment records parts of it.
- Damages are the normal remedy. The Home Office’s counsel, Azeem Suterwalla KC, reminded the court that where damages would compensate a losing bidder, “the normal outcome should be that the suspension is lifted”, and that the burden of proof lies on the dissatisfied bidder (para. 32). On this view, a well-resourced incumbent can freeze a lower-priced rival simply by suing.
- Price matters. The judgment says PAL lost on price, with DEA’s bid coming in lower (the exact proportion is redacted). If DEA’s bid proves compliant, every week of delay keeps the government paying the higher-cost incumbent, assuming PAL’s service is extended.
- Border security is a public interest. The Home Office had chosen how it wanted the service delivered, and courts have accepted that being unable to deliver it that way can be a loss money cannot fix (para. 41). The judge’s finding was about the thinness of the evidence, not the importance of the service.
- Nothing has been decided on the merits. Refusing to lift a suspension is not a finding that the Home Office did anything wrong. The December trial may vindicate the award.
RSN searched for public statements on the ruling from the Home Office, PAL Aerospace and DEA Aviation and found none. We will add any response we receive.
What is established, disputed and not established
Established
- The High Court refused the Home Office’s application to lift the automatic suspension and ordered an expedited trial, which is listed to begin on 7 December 2026 (paras. 50 and 55).
- The Home Office selected DEA Aviation as the winning bidder; PAL Aerospace is the incumbent and issued its claim on 17 July 2026 (paras. 7 and 8).
- The judgment states PAL’s existing contract is due to expire on 30 November 2026 (para. 8).
- A 2024 contract notice records a £33,926,306 award to PAL, made without open advertisement, for 29 October 2024 to 31 January 2026.
Disputed
- Whether DEA’s bid complied with the tender requirements, and whether the Home Office should have excluded it.
- Whether the tender documents were clear enough about which kinds of solution were allowed.
Not established
- The value of the new contract. Law360 reported £100 million; the public judgment redacts all prices and RSN found no published award notice.
- What aircraft, crewed or uncrewed, DEA proposed.
- How surveillance will be provided between 30 November and the end of the trial. That detail is redacted.
- Whether, and on what terms, PAL’s 2024 contract was extended beyond its listed end date of 31 January 2026.
What accountability would look like
- Confirm continuity. The Home Office should tell Parliament, in a written statement, how aerial surveillance of the Channel will be maintained from 1 December 2026, and at what cost.
- Publish the paper trail. Any extension of PAL’s 2024 contract, and the award notice for the new contract, should be published on the government’s procurement portals with their values.
- Explain the delay. The department should explain why it waited two months after PAL’s claim to apply to lift the suspension, given that the existing contract was due to run out.
- Scrutiny after trial. Whatever the outcome in December, the Home Affairs Committee or the National Audit Office could examine whether the tender specification was clear, given that a central dispute is whether bidders could tell what the Home Office was asking for.
- Publish the trial judgment promptly, with redactions kept to genuine commercial or operational secrets, so the public can see how a border-security contract was awarded.
Sources: PAL Aerospace Ltd v Secretary of State for the Home Department [2026] EWHC 2786 (TCC), The National Archives; Contracts Finder award notice, 25 November 2024; Contracts Finder early engagement notice, 27 April 2023; Find a Tender pipeline notice 2025/S 000-033543; ch-aviation; Law360, 11 August 2026; Public Contracts Regulations 2015, reg. 95; Cranston Inquiry report, executive summary; Home Office, Immigration system statistics, year ending June 2026.
Image: A Swedish Coast Guard Bombardier Dash 8 Q-300 maritime patrol aircraft at Stockholm Skavsta Airport, June 2010. It is the same aircraft type PAL Aerospace flies for the Home Office, but not an aircraft used over the Channel. Photo by Marek Ślusarczyk (Tupungato), CC BY 4.0, via Wikimedia Commons.
How this article was made: Right Side News researched and drafted this article with the help of AI tools. Sources are linked so readers can check them. Spot an error? Tell us in the comments and we will correct it.
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