Law report / Substantial changes to rail services unlawful

Regina v Director of Passenger Rail Franchising, ex parte Save our Railways and others; Court of Appeal (Sir Thomas Bingham, Master of the Rolls, Lord Justice Waite and Lord Justice Otton); 15 December 1995

In specifying minimum service levels for railway passenger services for the initial letting of franchises, the director of passenger rail franchising was not permitted by the instructions issued by the Secretary of State for Transport to depart significantly from the services provided by British Rail immediately prior to franchising.

The Court of Appeal granted leave to appeal, refused to quash the franchising director's decisions specifying minimum passenger service levels for rail services operated by Great Western Trains Co Ltd, South West Trains Ltd and LTS Rail Ltd, and quashed the director's decisions in relation to those operated by Inter City East Coast Ltd, Gatwick Express Ltd, Midland Main Line Ltd and Network South Central Ltd.

The Railways Act 1993 established a statutory scheme for transferring the operation of rail passenger services into private ownership. The franchising director was required to carry out functions under the Act in accordance with guidance and instructions from the Secretary of State for Transport. His instructions issued on 22 March 1994 provided by paragraph 18 that for the initial letting of franchises, the director's specification of minimum service levels for railway passenger services was "to be based on that being provided by BR immediately prior to franchising". Guidance in paragraph 23 provided that after the initial franchises, the services should, over time, be tailored more closely to demand.

In the first case, on 16 May 1995, the minimum service level specified for services operated by Great Western Trains Ltd was set at 86 per cent of the current BR level of service, by South West Trains Ltd, 89 per cent or 86 per cent, and by LTS Rail Ltd, 80 per cent or 69 per cent.

In the second case on 14 September 1995 the minimum service level for services operated by Inter City East Coast Ltd was set at 71 per cent, by Gatwick Express Ltd, 45 per cent, Midland Main Line Ltd, 75 per cent, and by Network South Central Ltd, 88 per cent or 77 per cent.

In the first case the applicants applied for leave to apply for judicial review on 16 August 1995 and in the second on 20 October 1995.

Owen Davies (Leigh Day & Co) for the applicants; Jeremy Sullivan QC (Treasury Solicitor) for the franchising director.

Sir Thomas Bingham MR, giving the court's judgment, said that the crux of the dispute concerned paragraph 18 and in particular the words "based on that being provided by BR immediately prior to franchising". The Secretary of State's instructions and guidance defined and circumscribed the director's statutory duty.

"Based on" was not a term of art and it was not an exact term. It permitted some latitude. It was obvious that every train timetabled by BR need not continue to run. There might be changes, and within limits it was for the franchising director to rule on the extent of the changes. His was the primary judgment. But there was a limit to the changes which might be made without ceasing to comply with the instruction in paragraph 18 and the guidance in paragraph 23.

The changes must be marginal, not significant or substantial. Give or take relatively minor changes, the minimum service level specified was to correspond reasonably closely with the pre-franchising BR specification.

Turning to the facts, the court had to work on the lower of the director's alternative specifications. The figures set for Great Western Trains Ltd and South West Trains Ltd did not compel the conclusion that the director was in breach of his statutory duty. In relation to LTS Rail Ltd, Inter City East Coast Ltd, Gatwick Express Ltd and Midland Main Ltd, he had not correctly understood or complied with the Secretary of State's instruction.

The delay in the first case in making the application was "undue". The application for certiorari and mandamus would be refused on that ground but the court would consider making a declaration in the case of LTS Rail. The delay in the second case could not be regarded as "undue" and relief would be granted.

Ying Hui Tan, Barrister