The passenger-led campaign group Bring Back British Rail announced this morning that they have started a Judicial Review on the East Coast and have already dispatched a pre-action letter to the Secretary of State for Transport.
In the letter, they highlighted Chris Grayling’s words to Parliament on 5th February this year when he said that Stagecoach had “breached a key financial covenant” and “Stagecoach [had] got its numbers wrong”. Despite the breach of this “key financial covenant” the Transport Secretary has already decided that Stagecoach may be permitted to run the East Coast franchise again, and has even included them on a shortlist of bidders for the East Midlands franchise.
Bring Back British Rail believe that the franchising farce can’t be allowed to continue. In their letter to Chris Grayling today, their lawyers Leigh Day have asked him to confirm:
- that he will revoke the Franchise Passports granted to Stagecoach and/or Virgin and/or suspend them pending a full investigation of what went wrong.
- whether the costs of terminating the franchise have in fact been met or could be expected to be met by the fulfilment of Stagecoach’s obligations.
To date, the Secretary of State has failed to answer the second question in full, despite the fact it is crucial for everyone to understand how much Stagecoach and Virgin will have cost us taxpayers.
Bring Back British Rail now aim to raise a minimum of £15,000 in the next 30 days. We’ll be supporting them as much as we can and hope our followers will do the same – you can read more about the case and donate here.
A Recent History of Judicial Reviews in Rail
A Judicial Review of the Department for Transport is essentially the holy grail of transport campaigning. Over the last decade, we have seen the DfT go to great lengths to avoid the scrutiny that such a legal case could provide. If BBBR’s new case is successful, we can expect the smokescreens to finally lift on the practices of the entire department.
2012 – Virgin’s Judicial Review over the west coast franchise
In August 2012, Virgin began judicial review proceedings to challenge the award of the west coast franchise to FirstGroup. Just a month into the pre-action proceedings, the DfT withdrew from their decision, announcing the discovery of ‘significant technical flaws in the franchising process’ and suspending several key civil servants in the process.
The sudden cancellation of the franchise award cost taxpayers at least £50 million and the Public Accounts Committee warned that the cost might be “very much larger”. You can refresh your memory of the PAC Committee’s view of the affair here.
It was this fiasco that led to the Brown Review on rail franchising, which claimed that rail franchising was not in fact broken and made a set of recommendations for its improvement. A short while later, the Govia Thameslink Railway management contract was put together, based on a very radical interpretation of Brown’s recommendations (and leaving 100% revenue risk with the taxpayer).
2017 – ABC’s Judicial Review over the GTR management contract
In the midst of the Southern Rail crisis of 2016, we launched Judicial Review proceedings into the GTR management contract, crowdfunding an initial £25,000. Over six months later, our application to JR was turned down on paper by a single judge. Convinced of the merits of our case, we crowdfunded again to take the DfT to an ‘oral hearing’ on whether the JR case could go forward.
In June 2017, we met the DfT in court and discussed our main ground for JR in the High Court for 2.5 hours. The ground discussed was the delay to the force majeure decision on GTR’s continual franchise breaches since the very beginning of their contract. As was widely reported at the time, the DfT argued strongly that the force majeure decision was already “imminent” and about to go public. In a move that nobody expected, the Judge made a conditional judgment, requiring the DfT to announce their decision within two weeks. You can read our full report of the court case here.
On the final day of the two week deadline, the DfT announced that it was asking GTR to pay £13.4 million in the form of an ‘improvement package’ to go straight back into the company (including hiring an extra 50 OBS staff). In claiming they had fulfilled the Judge’s condition, they then came to us for over £17,000 in costs, which we paid shortly afterwards (narrowly escaping bankruptcy).
In January 2018, the NAO report on the TSGN franchise was finally released, giving the full background to how the force majeure decision had been made. Pages 39 to 41 of the report clearly state that a rushed and ‘verbal’ agreement was made in the days after our court case, in which it was agreed that GTR could buy out two years of their liability – even extending into the future (until Sep 2018). This meant that they could completely avoid ever having to prove the often cited effect of “unofficial industrial action” or “sickness strikes” that they had claimed throughout the course of the Southern Rail Crisis. To date, these claims have never been proven, despite providing the thrust of the DfT’s anti-union messaging.
The man behind this hasty force majeure deal was the MD of Passenger Services at the DfT, Peter Wilkinson. A further investigation into his alleged conflicts of interest had been conducted in early 2017 and had been expected to conclude in the NAO report with an enquiry into the circumstances of both GTR and c2c franchise awards. Though we had previously published the first half of this NAO investigation, there was no mention of it whatsoever in their final publication.
Our inquiry into what happened in court last year is far from over. Please follow ABC on Facebook and Twitter to keep up to date with more revelations coming out this month and throughout 2018!
And please, if you can, support our friends at Bring Back British Rail. Cases like these are always David vs Goliath and they will need all the support we can give throughout this time.
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