The Williams-Schapps Plan for Rail: Back to the Future?

Introduction

The Right Honourable Grant Schapps MP, the Secretary of State for Transport poses alongside Mallard at the National Railway Museum in York. Photo copyright the Department for Transport and reproduced under OGL permission.

On 20 May the Secretary for Transport, Grant Schapps, chose to launch the Government’s blueprint for the future structure of the rail system with a photo of himself posing alongside the Mallard (the world speed record holder for steam traction) at York Railway Museum. Nostalgia is certainly a prevalent theme in the rail sector at the moment and the names of some of the great railway companies from the past, such as the Great Western Railway (GWR) and the London and North Eastern Railway (LNER) have been resurrected by train operating companies. Mallard was, of course, a LNER locomotive and the LNER was one of the ‘Big Four’ railway companies of the inter-war years, which, as we shall see below, resulted from an earlier massive restructuring exercise. Whether it ultimately succeeds or fails, the Williams-Schapps plan (WS Plan) is set to become the latest watershed moment in the long rail history of the country which, as GM Trevelyan put it, gifted the railways to the world.

Background: a whistle-stop tour of railway restructuring

The ‘Big Four’ 

The ‘Big Four’ railway companies of the interwar years – the London and North Eastern Railway (LNER); the London Midland and Scottish Railway (LMS); the Great Western Railway (GWR); and the Southern Railway (SR).

As noted above, The ‘Big Four’ resulted from the first major national restructuring and rationalization of the industry in the early 1920s, almost exactly a century since Parliamentary authorization had been obtained to build the Stockton and Darlington Railway; which many regard as the first railway in the modern sense of the term. The construction and operation of the railways thereafter was driven by private enterprise operating in a largely uncoordinated manner resulting in more than 100 companies and a very fragmented system before the amalgamation into the Big Four under the Railways Act 1921.

Post-war nationalization

The creation of the Big Four was arguably a partial step towards nationalization in that, although the companies were private entities, they were created by statute pursuant to a strategic government plan. Full nationalization followed just 25 years later in the immediate wake of the Second World War under the Transport Act 1947. During the war, the railways had effectively been managed as a nationalized industry in any case and had been run into the ground due to the demands of wartime operating.

A class 45 at Exeter St David’s in a typical BR era scene: Photo Phil Richards from London (Creative Commons Attribution-Share Alike 2.0).

The railways were operated as a fully nationalized state-owned industry for the next four and a half decades under the auspices of the much-derided British Railways which was rebranded as British Rail (BR) in 1965. It is fashionable to ridicule BR as the archetypal state-owned leviathan synonymous with inefficiency, poor customer service, industrial strife, crumbling infrastructure, ancient dirty trains and stations, and terrible catering! Although, some commentators would argue that, at least in its latter years, much of this criticism is undeserved and the result of lazy caricaturing (for a more balanced analysis of British Rail, which focuses on the successes as well as the failures, see Terry Gourvish’s book, British Rail 1974–1997: From Integration to Privatisation (OUP, 2002).

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Sectorization

A class 37 in Railfreight sector (petroleum division) livery in the early 1990s: Photo Murgatroyd49, CC BY-SA 4.0

The 1980s saw a radical programme of privatization under Margaret Thatcher’s administration. However, not even this most vehemently pro private sector administration was quite sure how to tackle BR due to its size, complexity, and vast number of moving parts (literally and metaphorically). Sectorization in the late 1980s constituted tentative steps towards securing this aim by dividing the industry into more manageable components. To this end a number of large passenger and freight sectors were created which (save for Network South East and Scotrail) corresponded with business sectors as opposed to geographic location.

 

From privatization to the Williams Review

John Major’s Tory administration of the early 1990s finally grasped the nettle and fully set about privatizing the industry under the Railways Act 1993. However, the sectorization approach was abandoned in favour of a model which has been a constant source of controversy and dissatisfaction in many quarters. The tracks and infrastructure were placed in the hands of a newly created state-owned company, Railtrack, which was placed at arm’s length from central government. Private train operating companies (TOCs) were then invited to bid for the right to run services on those tracks using rolling stock which had been acquired by leasing companies. The essence of that system has remained unchanged until the latest phase of developments although Railtrack was replaced with Network Rail at an early stage of the franchising era.

Sea Container’s GNER was one of the early franchisees but it lost the franchise early in the second term.

As I have already said in previous posts which have tackled this issue, the franchising system has been marred by failed franchises necessitating state intervention, increasingly complex fair structures, overcrowding, government tinkering with the system leading to diminished commercial freedom for TOCs, and the chaotic introduction of new timetables. Indeed, it was the latest of these timetabling fiascos in May 2018 which proved to be one of the main triggers for instigating the Williams Review.

The Williams Review was intended to feed into a White Paper to be published in the autumn of 2019 with reforms taking place from 2020. This schedule was upset by the onset of the Covid19 pandemic, however, as I noted in my previous post on this issue, the emergency necessitated unprecedented Government intervention in order to support the industry through lockdowns and travel restrictions. This brought forward the end of the franchising system under an ‘interim system’ whereby the Government absorbed much of the financial cost in return for gaining new controls in terms of the operation of services. For more detail on the interim measures and the Williams Review please see earlier post: 2020 Roundup.

Key Aspects of the Williams-Schapps Plan

There are a great many proposals set out in the paper and I do not propose to cover them all here and now. For present purposes I shall merely offer an overview and some initial thoughts on some of the key proposals. However, as the legislative process gets underway certain issues shall doubtless come to the fore and I may well be returning to aspects of the plan in due course in more focused posts.

Great British Railways

The headline proposal seized upon by most of the media is the creation of a new state-owned company, Great British Railways, which will bear a slightly modified version of the famous British Rail ‘arrow logo.’ Despite the demise of British Rail almost thirty years ago with privatization, the logo has never entirely gone away and has survived as the recognized symbol for stations on the national rail network. However, the new company shall reclaim it as the official corporate badge for the company charged with providing the nation’s rail network.

The well known original BR logo which survived privatization as the universally recognized symbol for the national rail network and is not set to be reclaimed as the official corporate logo for Great British Railways.

The company shall own and operate the tracks and infrastructure and shall replace Network Rail in that respect. However, it will not simply be a replacement for Network Rail in that the idea is to create a corporate identity which reunites track and trains as part of a cohesive system. From the passenger’s perspective they will enter a Great British Railways station and board a train bearing the same logo and possibly a standard livery which is the same throughout the land. So far this sounds very much like renationalization and the resurrection of British Rail. However, there is a key difference in that, despite the outward appearance of uniformity, the services operated under the GBR badge shall still be provided by private operators in many cases. However, as we shall see, the terms under which they provide those services shall differ significantly from the now defunct franchising system.

Passenger Service Contracts

It will come as little surprise to those who have followed the Williams Review to learn that the franchising system will be replaced by a concession model under agreements which shall be termed Passenger Service Contracts (PSRs). The key difference between franchising and concession-based systems is that, under the latter, the ‘revenue risk’ is borne by the public entity (in this case GBR) which grants the concessions. In other words, the company operating the concession is not solely dependent upon revenues for its profits. It will receive a fee for operating the services on behalf of GBR come what may. Should any revenue-based profits be generated on top of the fee the terms of the PSR will stipulate how the spoils should be divided between the parties. Although the Plan states that, ‘in most contracts, fare revenue will go to Great British Railways, with operators delivering to the specification and managing their costs in doing so.’ (see section 21, p 54).  Of course, in the longer term there will still be a major incentive for a TOC to operate profitably in that, whilst it may enjoy financial security for the duration of its current PSC, a failure to generate profits would not be conducive to the renewal of the contract (although the general tenor of the WS plan is to the effect that it may take some time to recover from the pandemic and one should not expect a return to profitability anytime soon). Moreover, the contracts will set demanding performance targets for reliability, punctuality, reducing overcrowding at peaks times, cleanliness of rolling stock, dealing with vandalism and overall customer satisfaction.

The other major difference from franchising is that the TOCs will have far less commercial freedom and will have to operate within the confines of a system designed and built by GBR. GBR will be responsible for timetabling, branding, setting fares and most other operational aspects of the business. This is all part and parcel of the desire to deliver a service which has a strong and uniform corporate identity. The model provided by Transport for London was cited many times in the proceedings associated with the Williams Review and features heavily in the WS Plan which emerged from that Review. At this point it should be noted that the legislative machinery for facilitating concession type arrangement has always been part of the privatized system and is facilitated by section 24 of the Railways Act 1993 which enables exemptions from normal franchising arrangements. However, it was regarded as an exception to the normal franchising system and was certainly never intended to be the norm. Clearly, the WS Plan constitutes a complete reversal of that approach with the end of the standard franchising model altogether.

London Overground is operated by Arriva on behalf of Transport for London under the model proposed by the WS Plan: photo Kevin B under Creative Commons Attribution-Share Alike 3.0.

It should also be noted that the plan emphasizes the need for flexibility and to avoid a ‘one size fits all’ approach. It is likely that PSCs will have some core features and common terms but there will also be substantial bespoke components designed to reflect regional variations and the different types of customer demand on particular routes. Clearly, there are major differences between commuter routes, long distance services and local rural services. Moreover, there may be some services, ‘predominantly the long-distance ones’ where operators may be afforded more commercial freedom and take on more of the revenue risk (see section 25, p 58). In other words, PSCs are likely to sit on a spectrum with most likely to operate as concessions but with some being more akin to the old franchising model.

The new system cannot be brought in overnight, due to the need for new legislation, thus, as an interim bridging measure, National Rail Contracts will start replacing the emergency agreements which were brought in as a result of the Covid-19 crisis.

Thoughts on the Legal Dimension: Reducing the Scope for Internal Conflict in the Industry

The main focus of the proposals is to create a national rail organization with a strong corporate identity (with some regional variations) where passengers know what they are getting whichever part of the network they are travelling upon; whilst at the same time keeping the benefits of competition and private enterprise. This aspiration is perhaps most concisely summed up by the following passage on page 31 of the WS Plan:-

Great British Railways will be responsible, and held accountable, for meeting the punctuality, quality, efficiency, safety and other goals set out in this white paper and by Ministers. The whole system, planning and operating functions needed to deliver a joined-up network will be directed by Great British Railways, working in partnership with devolved transport authorities where appropriate. There will be no excuse-making and blame-shifting. The cottage industry of costly commercial disputes over delay attribution will end.

As the latter part of this extract makes clear, one of the main criticisms levelled against the privatized system established in 1993 has been the fact that there has been fragmentation of the industry and too many different entities not always working together in a cohesive manner. The nadir of privatization was arguably epitomized by the Potters Bar rail crash of 2003 where arguments raged for a time over who was responsible for the defective points that caused the derailment. At one point it looked as though no one would accept liability with the maintenance contractor, Jarvis, suggesting the possibility of sabotage (a tactic to stop res ipsa loquitur from operating?). Network Rail (as successor to Railtrack) swiftly made the decision to take all routine track maintenance back ‘in-house.’ Jarvis and Network Rail admitted liability in 2004 and set aside £3 million to meet claims. In 2010 the Office of Rail Regulation instigated criminal proceedings against Network Rail and Jarvis and the former was convicted of Health and Safety offences having entered a guilty plea; the action was not pursued against Jarvis in the light of the fact that it had already gone into administration (see ORR report). (See Railways Archive for other reports and documentation pertaining to the incident).

The Potters Bar crash marked a watershed moment in terms of health and safety and brought about much needed clarifications in terms of roles and liabilities. Indeed, some research indicated that, overall, safety improved under privatization; for a flavour of the debate as to the impact of privatization on safety see BBC report, ‘Rail “safer” after privatization.‘ However, the franchising system left plenty of scope for internal conflict, especially in the field of track access agreements. The fact that the TOCs are effectively ‘customers’ of Network Rail in terms of using the fixed infrastructure instantly establishes a source of conflict and arguments as to who bears the loss when things go wrong, and delays occur. When the railways were privatized in 1993 so-called ‘Schedule 8’ payments were introduced which required Network Rail to compensate TOCs for delays caused by infrastructure issues – be it leaves nn the line, vandalism, points failure, or even something as dramatic as the 2014 storms and the collapse of the sea wall at Dawlish. Schedule 8 payments imposed a form of strict liability on Network Rail in that they were payable irrespective of any fault on the part of Network Rail. The Office of Rail Regulation (as it then was) explained the rationale for the payments as follows: to ‘align the interests of the infrastructure manager with those of train operators’ by ensuring that the former has a financial incentive to minimize disruption.’ This was intended to offset the effects of the ‘vertical separation’ between the infrastructure and the trains.

The contractual agreements between Network rail and the TOCs is governed by a vast and complex document called the Network Code which covers all aspects of the relationship and sets out detailed Access Dispute Resolution Rules (ADDR). This has given rise to a largely unseen hinterland of alternative dispute resolution which forms a large part of the work of any lawyer engaged in rail law. This is what the WS Plan means when it refers to a ‘cottage industry of costly commercial disputes over delay attribution…’ The franchising system clearly created much scope for conflict although, in fairness, the industry has tried very hard over the years to adopt a more collaborative and less confrontational approach to dispute resolution and set up the Delay Attribution Board to this end, which promotes good practice in terms of avoiding and resolving disputes. Nevertheless, the WS plan seems to suggest that the franchising system was largely designed for the benefit of lawyers!

Today’s railways are a maze of agreements between hundreds of different parties, drawn up and policed by battalions of lawyers and consultants, including an entire staff dedicated to arguing about who is at fault for each delayed train. (at p 8).

As I have said many times over the years it is easy to make lawyers the villains of the peace but the plane fact is that there would have been no rail system in the first place were it not for the likes of Francis Mewburn and Samuel Carter, both pioneering railway solicitors of the nineteenth century. Moreover, the rail system is vast, complex and highly regulated which means that it needs lawyers to make it work. Nevertheless, there is certainly a need to reduce the scope for conflict insofar as we can within the model which the WS plan proposes.

I shall be closely following future developments as the requisite legislation takes shape and at some point begins its passage through Parliament.

2020 round-up

A deserted Marylebone Station during the first lockdown. Photo Kwh1050

The events of 2020 and all the additional work which this has generated in terms of setting up online courses and so forth has caused me to neglect this blog somewhat and a number of cases and issues have begun to accumulate which I want to address. As you may have gathered by now I like to tackle these issues in detail and really get down to the nuts and bolts of decisions. In model railway circles anyone with an obsession with the absolute accuracy of a model locomotive  is referred to as a ‘rivet counter.’ I have to admit that I am somewhat of a rivet counter when it comes to the legal issues associated with the railways which means that it can take a long time for me to produce a post. So, rather than spending several months producing separate posts on the aforementioned issues I have decided to kick start 2021 with a much less detailed roundup of some of the rail law issues which arose in 2020, some of which may carry over into 2021 in any case. I then propose to return to some, if not all, of these issues in due course with more detailed analysis.

Franchising – and the end thereof as we know it?

The Williams Review

One of the many stories which has been shoved out of the media spotlight by the Covid-19 pandemic is the Williams Review on the future of rail.  The Williams Review was launched on 20 September 2018 with the remit of thoroughly reviewing all aspects of the industry with a particular focus on its commercial structure and the franchising system. When the Railways were re-privatized under the Railways Act 1993, following decades of post-war public ownership, franchising was chosen as the business model for commercializing the system. The track and infrastructure was placed in the hands of a new corporate organization known as ‘Railtrack‘ (the antecedent of Network Rail Infrastructure Ltd) and the rolling stock was acquired by leasing companies. Under the franchising model, which was chosen after much agonizing, commercial organizations then had to win the right to use those assets to provide services under a competitive tendering process.

The short lived GNER franchise.

The franchising system has been much maligned over its quarter of a century of operation with a number of high profile failures requiring the state to use its powers to step in and take over franchises. To take the East Coast mainline alone, the failure of Sea Container’s Great North Eastern franchise in 2007 was soon followed by the much publicized failure of the National Express franchise in 2009. After a period being run by a state owned company as ‘an operator of last resort’ the franchise was acquired by Virgin Train East Coast (a partnership formed by Virgin and Stagecoach) before that finished prematurely in 2015. For an excellent overview of the franchising problems on the East Coast mainline see Jerry Alderson’s Article for Railfuture, ‘Franchise Failure.’ There are many reasons for these failures which may be explored in more detail in subsequent posts; suffice it to say, ‘overpromising’ may have been a factor in some of these failures. Moreover, successive governments have constantly nibbled away at the commercial freedom of operators and straightjacketed them with increasingly onerous minimum service requirements and so forth.

Matters were brought to a head by the ‘service meltdown across the North and South East‘ which followed the chaotic introduction of the new timetable in May 2018. The then Secretary of State for Transport, Chris Grayling, set up the review in the immediate wake of this debacle. The original plan was for the review to feed into a White Paper to be published in autumn 2019 with reforms taking place during the course of 2020. It soon became clear that Williams favoured a move away from franchising to a concession model which moves the revenue risk from the operator to the government. In fact, in 2018 I published a blog post on an article by Prosser and Butler which strongly advocated such an approach and their work fed into the review. Moreover, the idea seemed to meet with a positive response in Whitehall.

Then, of course, the review was overtaken by events as the COVID-19 pandemic hit. However, rather than causing the government to ‘park’ the issue, the pandemic has hastened reform of the system. Clearly, the already struggling franchising system could not cope with the collapse in passenger numbers brought about by lock-downs and home working requirements. However, the rail system had to be maintained as a vital public service and was thus essentially placed on a wartime footing with the government taking control and absorbing the financial losses. This was initially achieved through the introduction of  ‘Emergency Measure Agreements‘ (EMAs) in March 2020 as the first national lock-down took effect. These were replaced with Emergency Recovery Measures Agreements (ERMAs) in September 2020. However, in a masterful piece of spinning this was promoted as the abolition of the old franchising system and a ‘transitional stage to the new system’ as opposed to a short term emergency measure to alleviate the financial pressures caused by the pandemic. Much was made of the fact that, in return for absorbing the financial impact of the pandemic, operators will have to meet ‘tougher performance targets and lower management fees’ in addition to a range of other reforms. This certainly bears some of the characteristics of the concession model which appears to be the ultimate objective and indeed Keith Williams was reported as endorsing the approach.

Rail Franchising Litigation

The Williams Review coincided with the Rail Franchising Litigation which in many respects exemplifies some of the onerous franchising requirements faced by train operating companies. In this case various train operating companies (TOCs) wished to bid for certain franchises. However, they considered the terms of the proposed franchise agreements to be unduly onerous in that they made the franchisee bear the risk of pensions liabilities. When they submitted their bids on the basis of revised terms which shielded them from these liabilities, their bids were automatically rejected and the franchisor (the Secretary of State for Transport) disqualified them from taking any further part in the process. The Secretary of State pointed to various terms in the invitation to tender (ITT) which stated that the Secretary of State had an unfettered discretion to reject bids which were non-compliant with the terms of the competition. One of the grounds for holding that a bid was non-compliant was where it proposed changes to the franchise signature documents.

The disappointed TOCs challenged this decision on the grounds that it breached article 5(3) of Regulation (EC) 1370/2007 which stipulates that the competitive tendering process must be open to all, fair, transparent and non-discriminatory. The High Court rejected the claim on the basis that the terms of the process were clear from the outset and there was no principle of UK or EU law that limited the size of the risk that  could be passed to a private bidder in a public procurement exercise. It remains to be seen what impact, if any, this decision may have on the outcome of the rail review and it is a theme to which I shall return in due course.

Rights of Way

A while back I published a post entitled Rural crossings and rights of way on the case of The Ramblers Association v Secretary of State for the Environment, Food and Rural Affairs [2017] EWHC 716 (Admin). The post focused on the extent to which Network Rail can resist the dedication of a new right of way across its land on safety grounds. The case locked into the issue of  level crossing safety and the scope of section 31(8) of the Highways Act 1980 which provides that a statutory undertaker can block the creation of a right of way if it would conflict with its duties as a statutory undertaker. Following some fiendishly complicated argument the court found in favour of Network Rail on the basis that there never had been a right of way at the location in question and to dedicate a new one would certainly conflict with Network Rail’s duties as a statutory undertaker, especially in the light of the level crossing closure programme.

There has been another case on a similar theme in which Ramblers Association was distinguished, namely, Network Rail v Welsh Ministers  [2020] EWHC 1993 (Admin), concerning a decision by an inspector to confirm the existence of a footpath across two railway lines near Llandudno junction. A significant aspect of the Ramblers Association case was that, despite there having been considerable evidence of usage, there never had been a public right of way and evidence was adduced to show that there was no right of way when the railway was built. In Welsh Ministers, however, following careful scrutiny of archival evidence, the court accepted the inspector’s view that a right of way pre-existed the building of the railway. This meant that the statutory provisions on statutory authority would not come in to play in that they only relate to the creation of new rights of way which have not hitherto existed.

HS2

One area which I did manage to comment on in 2020 concerned the naturalist and broadcaster Chris Packham’s attempt to seek judicial review of the decision to proceed with the HS2 project in the light of the Oakervee Review on the grounds that there had been inadequate consideration of environmental and climate change issues. The application was rejected by the Court of Appeal, largely on the ground that the report could not be considered in isolation from the planning process as a whole and all the detailed work that had been done on these issues: see Chris Packham loses appeal.

However, there have been a couple of other cases on other aspects of the project which I have yet to comment on.

The Granger-Taylor litigation

The approaches to Euston have created some of the most major design challenges in phase 1 of the project due to the density of buildings, utilities and existing railways. Ms Granger-Taylor lives in a grade 2 listed Georgian villa situated 17 metres from a retaining wall reinforcing a cutting (the Camden cutting) on the existing main line from London to Birmingham. The original London to Birmingham Railway was built by Robert Stephenson and opened in 1837 and is destined to share a terminus (albeit a dramatically expanded one) with its 21st century descendant. HS2 will have to pass through tunnels very close to the retaining wall. This has been a major cause for concern amongst residents in that the stability of the retaining wall was already in doubt. HS2’s original design promised to replace a section of the wall altogether and solve the stability issues. This was dropped in favour of another design which residents feared would not solve the stability issues and could even cause it to collapse entirely with disastrous consequences for properties in the vicinity.

Ms Granger-Taylor sought judicial review of the decision to authorize the new design on the grounds that the threat to her property constituted a breach of her human rights under Article 8 of the ECHR which safeguards the sanctity of the family home: R (on the application of Granger-Taylor) v HS2 Ltd [2020] EWHC 1442 (Admin). The claim was rejected largely on the grounds that it was inconceivable that the defendants would be so reckless as to proceed with a design which could bring about such disastrous consequences. This raises interesting issues regarding the use of Article 8 as a means of challenging engineering design choices and the limited ability of the courts to challenge engineering decisions. I hope to return to these issues in more detail in due course.

Anti HS2 protestors and direct action

John Winder / “Stop HS2” poster / CC BY-SA 2.0

Since the 1990s and the halcyon days of Swampy we have become accustomed to attempts to disrupt new road and airport projects with tree top encampments and so forth designed to make it more difficult to clear the land ahead of construction. HS2 has been no exception and we can expect protests to continue throughout the construction phase  despite the fact that an Act of Parliament has been obtained in respect of phase 1, the notice to proceed has been granted and the earth movers have moved in. In case anyone is still in any doubt as to whether the project is really happening they need look only to the emergence of the southern Chiltern Tunnel portals and the assembly of the tunnel boring machines.

Aside from tree top encampments one of the tactics pioneered in the 1990s concerned the construction of tunnels so as to make it difficult to dislodge protestors. This approach has been deployed  at Euston station and has attracted some media attention and at the time of writing attempts were underway to clear the protestors.

The activities of protestors have been the source of some litigation and in particular, the use of wide ranging injunctions aimed at ‘persons unknown’ meaning any as yet unidentified person who may be contemplating trespassing upon a construction site and taking direct action. The validity of such an approach has been endorsed by the courts on a number of occasions and most recently in Secretary of State for Transport v Cuciurean [2020] EWHC 2614 (Ch) concerning trespasses at an HS2 construction site near Kenilworth in Warwickshire. We shall be living with HS2 construction for many years to come and there is likely to be further litigation stemming from protests and attempts to disrupt construction so it is likely that I shall return to this theme in more detail soon.

Chris Packham loses appeal

The newly completed ‘head wall’ of the Chiltern’s tunnel Southern portal awaits arrival of the TBMs. Photo (c) HS2

As noted in previous posts the naturalist and broadcaster Chris Packham has sought to challenge, by way of judicial review, the Government’s decision to proceed with the HS2 project in the light of the Oakervee Review (OR). In Packham v Secretary of State for Transport [2020] EWHC 829 (Admin), the High Court refused him leave to apply for judicial review on the grounds that there was no arguable case. Mr Packham then appealed against that decision to the Court of Appeal which has now also rejected the claim: R (on the Application of Packham) v Secretary of State for Transport [2020] EWCA Civ 1004; [2020] 7 WLUK 494.

Despite the fact that, technically speaking, there has been no judicial review in that the application to bring judicial review was rejected, there has in fact been a form of de facto judicial review in that the Courts ended up considering the points in great detail in order to ascertain whether they were in fact arguable; such is the nature of ‘time-saving’ interloctuary procedures!

The High Court proceedings are dealt with extensively in my post entitled: Packham v Secretary of State for Transport. As is usually the case with any appeal, some of the issues fell away before the hearing. The Court was left to determine the procedural issues of whether the claim was in time and the intensity of the review which should be undertaken before turning to the substantive arguments. These were claims 2 and 3b on whether the OR and decision paid sufficient attention to the environment and climate change respectively.

Promptness

A preliminary consideration was whether the claim had been brought ‘promptly’ for the purposes of rule 54.5(1) of the Civil Procedure Rules. The Divisional Court ruled that, as the matter pertained to an infrastructure project, the six week time limit imposed by section 118 of the Planning Act 2008 ought to be used as the benchmark for determining promptness. The Court of Appeal rejected the argument that the decision in question ought to be treated as analogous to planning decisions governed by the 2008 Act: ‘Neither the Oakervee Review nor the Government’s decision of 11 February 2020 were made within any statutory framework, whether for the planning of major infrastructure or otherwise.’ (at para [45]). This is a logical conclusion in that a central component of the defendant’s argument was that this was not a planning decision; the planning part of the process had already been concluded culminating in an Act of Parliament.

However, this small victory would have been of limited consolation to the claimant in that the Court rejected all the other arguments in fairly emphatic terms.

Intensity of Review

The Court of Appeal endorsed the finding of the Divisional Court to the effect that this was essentially a political decision falling outside the formal planning process. As such it would only be subject to a ‘light touch’ Wednesbury approach whereby the report and the decision could only be impugned on the grounds of irrationality. Moreover, it was the type of matter where the decision maker would be afforded a ‘broad margin of discretion.’ The Court then briefly itemized the key reasons for this finding (at para [52]):-

  1. The decision was taken at the very highest level of Government;
  2. The Cabinet was fully aware that phase 1 of the scheme had already been authorized by the 2017 Act;
  3. There had been no physical changes between the Royal Assent and the Cabinet’s decision capable of undermining the environmental assessment undertaken pursuant to that Act;
  4. It was a case where the Cabinet had to balance a multitude of competing political, economic, social and environmental considerations.
  5. As a result of point 4 there could be no ‘right’ decision.
  6. The Oakervee Review report had obvious limitations.

All of which underscored ‘the essentially political quality of the decision.’ (para [53]).

The fact that the Court of Appeal emphasized the political nature of the decision and the ‘broad margin of discretion’ meant that the claimant faced an uphill task in establishing that the decision was fundamentally flawed in terms of how the environmental arguments had been addressed. Where a decision is political and the decision maker has a broad margin of discretion it is very difficult to show that the decision was so flawed that it was irrational.

Failure to consider environmental effects

The first substantive argument (ground 2 of the original claim) was that the decision to proceed was flawed in that it failed to properly consider the environmental effects of the scheme. There were two aspects to the claim. The first aspect was that the OR purported to set out a full and comprehensive analysis of the environmental effects when it clearly did not do so. The second aspect was that the cabinet (as decision maker) must be taken to have based its decision solely on the review believing it to contain a full and comprehensive review of the environmental effects. There could be no assumption that it was fully aware of the wider context of the project and the detailed environmental assessments which had been undertaken pursuant to the 2017 Act under which the first phase of the project had been authorized. Given that the OR did not in fact contain a full and comprehensive review of the environmental effects of the project and given that there could be no assumption that ministers must have been aware of the assessments which had already been done,  any decision to proceed based upon the findings of the OR must have been flawed.

The weight attached to the Oakervee Review

Taking the second aspect first, the Court of Appeal regarded the argument that ministers had to be regarded as being entirely reliant on the OR and unaware of the background of the project as entirely artificial. By the time that the OR was set up in August 2019 the ‘factual context’ of the project ‘was a matter of record.’ Thus, ‘the idea that the Cabinet, when forming the decision, lacked that basic knowledge of the project is, in our view, wholly unrealistic.’ (at para [64]). In his submissions (which can be viewed on the Court of Appeal YouTube channel) Mr Wolfe, for the claimant, repeatedly and forcefully made the point that the Government had consistently failed to adduce any documentary evidence that, when making the decision, the Cabinet had before it papers other than the OR. Thus, there could be no assumption that it had followed guidance in the Cabinet Office Manual which states that ‘[papers] and presentations for Cabinet … should include any information that is needed for ministers to make an informed decision’ (paragraph 4.30).

In any event the Court of Appeal appeared to regard this argument as somewhat of an irrelevance. Whether or not the Cabinet, on the day of the decision, had a specific briefing document before it on the background of the scheme and a detailed account of all the environmental assessments which had already been undertaken, ‘it is simply not credible’, the Court contended,

‘that in the circumstances in which the review was commissioned and the decision made, the Secretary of State, or any other minister, was ignorant of the legislative and procedural history of HS2, including the fact that the statutory approval process involved a lawful and comprehensive assessment of environmental impacts.’ (at para [64]).

The claimant also adduced a number of public law cases which imposed strict limits on the ability to make assumptions that certain procedural steps had been taken or to impute knowledge possessed by one person involved in the decision to another. The Court of Appeal held that all such authorities  were clearly distinguishable in that they all concerned adherence to strict procedural requirements in legislation governing the decision. In the case at hand the procedural requirements and duties pertaining to the central planning decision had already been fulfilled and the requisite powers granted:-

The decision now being taken was not a decision on the planning merits, it was a decision on whether or not to proceed with a project whose planning merits had already been considered in a statutory process, and its first phase approved in an Act of Parliament (at para [65]).

The Court of Appeal also firmly rejected any suggestion that the Secretary of State and the Cabinet as a whole had laboured under any misapprehension about the purpose, scope and limitations of the OR. They knew full well that the OR fell outwith the formal planning procedures:-

the review was not part of the legislative process for the approval of the project. It did not engage either domestic or EU legislation on environmental impact assessment. The Government was under no obligation to set it up. To do so was not necessary to discharge any duty arising under any Act of Parliament or at common law, or to comply with any policy promulgated by this or any previous administration. There was no statutory or policy basis for the terms of reference. Though a number of organisations and individuals took the opportunity to make representations to the panel, there was no duty here to undertake public consultation. (at para [66]).

Moreover, it was clear that the Government never had any intention of basing its decision solely on the OR. In a statement to the House of Commons on 3 September 2019 the Secretary of State for Transport, Mr Grant Schapps, stated that ‘its recommendations would inform our decisions on the next steps’ (the Court of Appeal’s emphasis); thus it was clear that the OR would not ‘dictate’ the Government’s decision (see para [67].

The scope and purpose of the Oakervee Review

The Court was equally dismissive of the other limb of the argument on ground 2, namely, that the OR itself misrepresented its scope and purpose and claimed a degree of comprehensiveness and detail which it could not possibly have achieved given the limitations of time and resources.

The first point that the Court made was that the OR had to be viewed in the light of the time constraints placed upon it and what could realistically be achieved in the time frame. A phrase used a few times in the submissions in the Court of Appeal hearing (which did not make it into the judgment) was that it was a ‘quick and dirty’ review (see submissions on YouTube, above). Another point made by Mr Mould for the defendant (which was also not covered in the judgment itself) was that the report was largely motivated by a need to justify the mounting costs of the project rather than a desire to revisit all the environmental arguments.

The panel comprising the OR had not been asked ‘to undertake a comprehensive assessment’. Apart from the impossibility of achieving this within the time-frame it was entirely unnecessary in that an assessment had already been concluded pursuant to the 2017 Act and a similar process was already in train as regards phases 2a and 2b. The terms of reference of the review made it clear that, ‘the review was not, and was never suggested to be, a self-contained evaluation of HS2 as a project. It was much more circumscribed than that.’ (para [70]). The Court then listed the following points as being of crucial importance (at paras [72-74]):

  • The terms of reference of the OR could not be criticized as ‘being inadequate, inconsistent or unclear.’
  • There was no suggestion that the panel misconstrued the terms of reference and the report was faithful to them: ‘There is nothing to indicate that, in doing so, it failed to consider with care any relevant content in the representations submitted to it.’
  • Leaving aside the issue of developments in the field of carbon emissions (dealt with below) there were no significant changes in circumstances which could have called into question the soundness of the assessments already completed in respect of phase 1.

Furthermore, at no point did the report attempt to, or purport to, conduct its own comprehensive review of the impact of the project on ancient woodlands etc. All it did was to mention some of the mitigation measures which had been adopted and to draw the conclusion that such measures must always be kept under review. Thus, the Court rejected the claimant’s submission that the report was presented as a full and comprehensive assessment of the environmental effects (para [75]).

All of the above led the Court of Appeal to draw two major conclusions (summarized at para [82]):-

  1. There could be no suggestion that the Government had misled itself as to the nature and purpose of the report and treated it as a full, thorough and comprehensive assessment of the environmental effects: ‘it would have been obvious to ministers that the environmental impacts of HS2, and the proposed mitigation, had been, and would be, formally assessed in accordance with the law. The review report did not have to spell that out.’
  2. There was no legal requirement for the OR to contain a ‘thoroughgoing, or any, assessment of environmental effects’ when deciding ‘whether and how’ HS2 should proceed given that those procedures had already been concluded in respect of phase 1 and were still in train as regards the other phases.

Climate change

The other substantive ground (ground 3b of the original claim) focused upon whether the OR and subsequent decision paid sufficient heed to the exigencies of the Paris Agreement as adopted by amendment of the Climate Change Act 2008. This requires the achievement of net zero emissions of greenhouse gases by 2050. Although the line would be carbon neutral in the long term, emissions caused by construction (e.g. from construction machinery and the manufacture of steel and concrete etc) could impede the attainment of the 2050 target. Thus, ‘it [the OR] did not explain, nor did the Government take into account, how the impacts of HS2 on climate change would sit with the requirements of the Paris Agreement, and the domestic legal framework designed to carry it into effect.’ (at para [91]) It was argued that it was not enough to acknowledge the issue, there had to be some thorough legal analysis of the implications.

The Court of Appeal commenced by firmly rejecting this argument before expanding upon its reasons for doing so:-

In our view it is impossible to infer from the report any failure by the panel to have regard to the Government’s relevant statutory and policy commitments on climate change. And the Government did not demonstrably commit any such error in making its decision. On this point too, we agree with the Divisional Court. There is nothing to show that the Government either ignored or misunderstood the legal implications of proceeding with HS2 for its obligations relating to climate change, including those arising from the Paris Agreement and under the provisions of the Climate Change Act . (para [92])

The Court then made two points in support of this assertion (at paras [93-94]). Firstly, it reiterated a point made many times in one form or another throughout the judgment. The OR fell entirely outside any of the legislation or planning mechanisms pertaining to HS2. There was no legislative requirement to undertake such a review in the first place or to consider climate change issues outside the formal planning process. One could summarize this argument by simply saying that the OR and associated decision were not planning decisions at all. It was part of a political process for deciding whether to use powers which had already been gained under formal planning procedures.

The second point was that, given that the review fell entirely outside these planning mechanisms, the Government had an entirely free hand in terms of setting the terms of reference of the review. It was up to the Government to set out what issues it wanted advice on when deciding whether to continue with the project. The Government was therefore entitled to set terms of reference relating to climate change which were limited in scope; that did not render the terms of reference defective:-

[I]t is worth recalling here that in the terms of reference the only mention of any consideration relating to climate change is in connection with “environmental benefits” – namely, “in particular for carbon reduction in line with net zero commitments”. This is not a shortcoming in the terms of reference, but merely a fact. The Government was under no obligation, statutory or otherwise, to extend them by requiring a wider or deeper consideration of the consequences for climate change of constructing and operating HS2, or by embracing, for example, the “legal implications” of increases in carbon emissions caused by the construction of the project. (para [94]).

As regards the content of the OR on this issue the Court held that the review engaged fully with the climate change issues and the implications of the Paris Agreement and the 2050 commitment. It drew attention to the fact that construction was likely to push up carbon emissions in the run-up to 2050 but noted that this had to be weighed against the long term potential of the scheme to reduce emissions. Moreover, it noted the need to constantly look for further improvements that could be made in the short to medium term. Thus, ‘…the panel did not neglect the period before 2050. On the contrary, it took care to consider what would be happening in the course of that period. It concentrated on emissions likely to be generated in the construction of HS2, which would be going on during those years.’ (para [96]). All in all, the OR more than fulfilled the objectives which had been set for it in the terms of reference.

Finally, the Court dispensed with the argument that the Plan B Earth case on the Heathrow third runway was authority for the proposition that the Government was duty bound to consider climate change issues in a far more intensive manner than the OR. As may be recalled from my previous posts, in the Heathrow third runway litigation the claimants successfully argued that the Airports National Policy Statement (ANPS) was defective in that it failed to address the implications of the Paris Agreement. The Court of Appeal held that there had been a clear breach of sections 5(8) and 10(3) of the Planning Act 2008 in that there had been a conscious decision not to consider the Paris Agreement. However, in the case at hand the Court of Appeal rejected the applicability of the Plan B Earth case for three reasons (at para [103]):-

  1. As the Court had already said ad nauseam throughout the rest of the judgment, the OR and associated decision fell entirely outside the planning process and any legislative requirements: ‘The Government was at liberty to select the issues on which it wished to be advised by the Oakervee review, against the background of HS2’s evolution as a project, including the statutory approval process. The Heathrow case fell squarely within the requirements of the Planning Act 2008 and the need to adhere to specific requirements on climate change.
  2.  The advice given in the report ‘dealt amply’ with the issues and was ‘legally impeccable.’
  3. When the Government gave its decision in 2020 it would have been ‘fully aware of the United Kingdom’s commitments under the Paris Agreement.’

Thus, as with the general environmental arguments,  the claimant’s specific arguments on climate change were firmly, if not emphatically, rejected.

Conclusion

The decision will  no doubt earn its place in the textbooks in that it has raised some novel and interesting issues.

The novelty of the case resides in the fact that, never before has a Government gone to all the trouble of obtaining an Act of Parliament to authorize a project only to risk re-opening the matter by publishing a subsequent report which it did not have to commission and making a decision thereon which it did not have to make! Nevertheless, despite the novelty of the issue, the Court of Appeal applied a fairly straightforward public law analysis regarding the distinction between essentially political and procedural decisions. Here, we had a political process belated added onto a formal planning process. Had there been no OR it would never have occurred to anyone to challenge a project which had been authorized by Act of Parliament. Mr Packham thought that the OR and associated decision presented him with an opportunity to mount an indirect challenge against the legitimacy of the entire project on environmental grounds.

In the event the Court of Appeal found that the OR asked a distinct question, namely, ‘whether and how’ to proceed with a project which had already been authorized. This was not the same thing as deciding whether to authorize or grant permission in respect of a project in the first place. The former is a political decision and the latter is a planning decision. As such there was a great deal of flexibility in terms of setting the terms of reference of the review and the weight attached to its findings. Indeed, at one point the Court of Appeal stated that the Government had had an entirely free hand in setting the terms of reference and need not have included environmental issues at all!

As I have repeatedly said in my previous posts on this litigation, the case also raises issue of Parliamentary sovereignty.  Mr Packham’s purpose in bringing the claim was clearly to put a spanner in the works of the entire project by using the OR as a vehicle for questioning the basis upon which the 2017 Act was passed. The Court of Appeal did not tackle this matter head on but there is the briefest of oblique references to the issue at para [52]:-

Secondly, at the date of the decision the Cabinet can be taken to have been aware, at least, of the existence of the 2017 Act and the fact that in the course of the passage of the Phase One Bill through Parliament a detailed assessment of environmental impacts had already been carried out. That assessment had not precluded the coming into force of the statute. It remained lawful and valid at the time of the Oakervee review, and at the time of the decision. So did the statutory approval process itself. And that will remain so regardless of the outcome of these proceedings. (emphasis added).

This represents a strong indication on the part of the Court of Appeal to the effect that it would have  had no power to stand in the way of an Act of Parliament, even if the OR and associated decision had been found lacking. It seems that the most Mr Packham could have hoped for was a declaration that the process had been defective; although this would most certainly have caused political embarrassment. However, one must also bear in mind the decision of the Court of Appeal in R (on the Application of Edwards) v the Environment Agency [2006] EWCA Civ 877, [2007] JPL 82, [2007] Env LR 126, [2007] Env LR 9, where the Court questioned the utility of making such a declaration where to do so would have no effect on the statutory power or authorization in question: see, in particular [para 130]. Interestingly, counsel for Mr Packham, Mr David Wolfe QC, also represented the claimant in Edwards; one can only speculate as to whether he was trying to get the Court to reappraise its stance in the case at hand!

 

Packham v Secretary of State for Transport

A Eurostar train on the Channel Tunnel Rail link in Kent (or HS1) – soon to be joined by HS2.
Photo by Kenneth Yarham.

Apologies for being very slow off the mark on this but there have been many distractions over the past few months as you can imagine.

On 15 April 2020 Hs2 Ltd issued the notice to proceed which enables the contractors to commence construction in earnest. No time was wasted during the Covid 19 lock-down and the first recognizable piece of civil engineering has begun to emerge with the outlines of the southern portals of the Chilterns Tunnel. These mark the entry points for the huge tunnel boring machines (TBMs) which will dig the tunnels.

Just a few days beforehand the High Court ruled against Chris Packham in his judicial review which sought to challenge the decision to proceed with the project in the light of the Oakervee Review (OR): Packham v Secretary of State for Transport [2020] EWHC 829 (Admin). In addition he had sought an interim injunction to prevent HS2 from continuing with clearance work affecting 6 ancient woodlands. My last entry on this issue which was posted just before the Covid 19 crisis really took hold on these shores contained much speculation about what the key arguments might be. I can now report on the precise nature of those arguments and how the court, comprising Coulson LJ and Holgate J, responded. However, the challenge very nearly failed to get any sort of airing at all in that there was an argument about whether it was out of time.

Was the challenge out of time?

Rule 54.5 of the Civil Procedure Rules provides that claims must be filed ‘promptly’ and no later that 3 months after the grounds for filing the claim arose. As regards nationally significant infrastructure projects s 118 Planning Act 2008 stipulates that actions must be commenced with 6 weeks of the relevant planning decision. Although the OR was not a planning decision as such, given that the matter pertains to a nationally significant infrastructure project, the Court was of the view that 6 weeks was a useful bench mark against to which to measure the issue of promptness in such circumstances. In this case the publication of the OR report and the decision to proceed with the project both occurred on 11 February 2020. The pre-action protocol letter was sent on 28 February and judicial review proceedings were not commenced until 27 March, some 6 weeks and 3 days since the OR publication and ministerial decision.

The Court rejected the argument that the delay was due to critical information which had only come to light some time after the 11 February. The substantive arguments all focused upon the OR report itself and no information which may or may not have come to light subsequently could be regarded as critical to the case (see para [44]).

An additional reason which suggested that the claimants had not been sufficiently prompt was that, due to the timing of the proceedings, the contractors were rapidly running towards the end of the window of opportunity during which the clearance work could be done  whilst minimizing the impact on birds and bats (see para [42]).

Nevertheless, given that the issue had only come to light at the hearing and had not been fully argued the Court gave the benefit of the doubt to the claimant and allowed him to air his arguments (see para [45]). It is these arguments to which we shall now turn.

The scope of any possible challenge

In my previous post on this issue I emphasized the fact that the Oakervee Review (OR) had to be viewed in the context of the overall decision making process and could not be regarded as having ‘hit the reset button’ on that process thus requiring the promoters to begin from scratch. Indeed, this would effectively require one to overlook the existence of an Act of Parliament authorizing phase 1 of the scheme: the High Speed Rail (London – West Midlands) Act 2017. It is possible to see echoes of this view in parts of the judgment (not that I can ever know whether anyone involved read my blogs!).

The immense scale of the environmental assessment which had had to be undertaken and the arduous nature of the Parliamentary proceedings which the promoters were required to negotiate in order to obtain the necessary Act of Parliament could not simply be ignored. It was unrealistic to assume that the OR was intended to set all that to one side and start afresh with a blank sheet of paper:-

The OR involved 10 Panellists, not the innumerable people involved in the 5 years of the Bill stages leading to the 2017 Act. It had to produce a result in weeks, not years. Its stated purpose was to inform the decision as to whether HS2 should continue, not to consider the project from scratch. Essentially, the OR had to look and see what had changed since 2017 and to consider whether those changes meant that the project should be halted. (para [48])

The problem with the OR was that it fell entirely outside the formal planning process and the promoters had never been under any obligation to undertake such a review. It was part of a purely political decision as to whether the Government should persevere with the project (which had already been authorized by Act of Parliament) or completely reevaluate it:

There was no statutory basis for the decision to launch the OR in August 2019. The decision to commission the OR was not a prerequisite for lawful exercise of powers under 2017 Act for Phase 1 (or indeed for continuing to promote the Bill for Phase 2). There was no statutory or policy basis for the terms of reference. (para [49])

This raised two questions; to what extent is such a decision susceptible to judicial review and, in making such a decision, must the minister confine himself to information produced solely for the purpose of informing that decision closing his mind to all other matters pertaining to the planning and delivery of the project?

As regards the first point the Court held that, in undertaking the review, the Minister was exercising a ‘common law power’  to make  a ‘macro political decision’ on a nationally significant infrastructure project for which he was accountable to Parliament (see para [54]). Given that there was no legislative requirement to undertake such a review and given the essentially political nature of the decision, ‘a judicial review of that decision would involve only a low intensity of review’ (para [55]). Thus, on this point the court concluded that:-

… when dealing with matters depending essentially upon political judgment, matters of national economic policy and the like, the court will only intervene on grounds of bad faith, improper motive and manifest absurdity (para [55]).

In other words, the decision could only be impugned is on conventional, ‘light touch’ Wednesbury grounds.

The Court gave short shrift to the second issue, namely, the argument that the decision to proceed had to be judged solely by reference to the quality of the information and analysis in the OR taken in isolation from all other aspects of the decision making process:

In a situation where a Minister is considering a review of a complex project which did not involve a call for evidence, it seems to us to be a nonsense to suggest that the Minister could only be assumed to know about the review, and not the Parliamentary process by which environmental issues have been and will be addressed and Phase 1 has been approved. The Review cannot be divorced from that process in the way suggested by Mr Wolfe QC; on the contrary, as paragraph 2.3 of the Report itself made clear, the OR did not start from a blank sheet of paper, because of all the proceedings which had resulted in the 2017 Act. (para [56])

The Court then proceeded to consider the substantive points raised by the claimant with a view to determining whether any of them could provide grounds for impugning the decision according to a ‘light touch’ Wednesbury analysis.

Specific criticisms of the Oakervee Review

The process of the OR

One argument was that the OR had departed from its terms of reference with the result that the minister could not be confident that the final report fulfilled the objectives which had been set. This mainly centered  on the testimony of Lord Berkeley, the former co-chair of the OR who left the role and published his own report having developed sharp disagreements with Oakervee and the other panelists. Most of the criticisms focused on the fact that the latter stages of preparing the report had been dominated by Oakervee and other panelists had been less involved and there were comparatively few meetings involving all panelists. The Court rejected the argument that such matters constituted significant departures from the terms of reference of the review. They were largely expedient measures dictated by the time constraints and limited resources of the review which was never intended to entirely reopen the decision making process from scratch:

In particular, in our view, he never made any allowance at all for the fact that the OR had very limited resources, was not able to call for evidence, and was required to work extremely quickly in order that any delays to the OR and thus the HS2 project were kept to a minimum. Indeed, most of Lord Berkeley’s criticisms of the process (from his comments on the terms of reference to the contents of his witness statement) arose from the inevitable speed and other limitations against which the OR had to be conducted. It appears that Lord Berkeley never came to terms with the severe constraints on the OR. (para [63])

Thus, it seems that the Court was of the view that Lord Berkeley had unrealistic expectations in terms of the scope of the review, its purpose, and what it could hope to accomplish in the limited time-frame.

Local environmental concerns

The claimant argued that the OR was entirely inadequate in terms of its consideration of local environmental concerns such as specific wildlife habitats and wild animal populations. The Court firmly rejected these arguments on the basis that they raised no new information and were, ‘simply a re-run of the points made 4, 5, 6 years ago during the debates about HS2.’ Thus, it was ‘entirely illegitimate to seek to reopen these matters in the guise of a challenge to the OR and the decision of 11 February.’ (see para [73]. Once again, this aspect of the judgment makes it clear that the Court was not prepared to consider the OR in isolation or regard as having re-opened the entire decision making process from scratch. Such concerns has been extensively examined in the environmental assessment and the 2017 Act had been passed in the light of all this information.

Climate Change

The Court also rejected the argument that the OR failed to adequately consider the climate change implications of the project. One aspect of the challenge focused on emissions from construction and operation of the line. It was held that the OR  ‘fairly summarised the overall assessment regarding the construction and operation of HS2.’ The relevant part of the report (para [5.27]) provided a range of figures which accommodated construction emissions at both the lower and higher ends of the spectrum. The report drew the reasonable conclusion that, whilst it might be difficult to secure significant further reductions in the construction of phase 1 (which is already getting underway) HS2 should focus on how it can reduce construction emissions in respect of the next phases. Thus:

Read fairly and properly, the OR Report did take into account the passage quoted by the Claimant from the paper by the Interested Party, in particular the expectation that construction carbon emissions would be greater than 8m tonnes. The contrary is not arguable. Nor is it arguable that the Report was misleading or that there was any need for the Report to go into further detail. The Defendants have not failed to take into account a relevant factor to which they were legally obliged to have regard. Ground 3a is unarguable. (para [97])

As anticipated in my earlier post, the claimant also made a great deal of the recent Heathrow third runway litigation. However, as I noted, the case generated rather more excitement than it deserved in that there had been a complete failure to consider the Paris Agreement. This constituted a clear breach of a very specific duty in section 5(8) of the Planning Act 2008 to ‘take account of’ government policy on climate change in the preparation of national policy statements (and ‘take account of’ sets the bar quite low in any case). Unlike the Heathrow third runway case, which was about the extent to which the decision maker ought to have factored in something which had yet to be formally adopted, the OR had been undertaken after the Paris Agreement had been enshrined in domestic law (see previous post). Hence, the report was drafted in a way which fully acknowledged the nature of the commitments made under the Paris Agreement.

Moreover, once again, one has to note that the OR has to be viewed in the wider context of the decision making process and the extensive studies carried out into climate change implication as part of the environmental assessment. As noted above, the Court held that it was a ‘nonsense’ to divorce the OR from the other aspects of the decision making process; again, this is explored more fully on my previous post on this issue.

Legitimate expectation

The next argument put by the claimant was that, by its terms of reference, the OR had created a legitimate expectation that there would be a full and detail reappraisal of the environmental arguments including climate change. The Court noted that this appeared to repackage the arguments already put to the effect that the OR had failed to carry out a sufficiently detailed and thorough review of the environmental arguments. The Courts responded in similar vein, namely, that the OR had never been designed to rerun all the arguments from scratch and, given the time-frame and resources accorded to it, it would be entirely unrealistic to expect the OR to address such matters in the level of detail desired by the claimant. Once again, the point was made that the OR could not be viewed in isolation from the overall process and the very detail assessments which had been made in respect of phase 1 and were still ongoing in relation to phases 2a and 2b:

For the reasons we have given above, the Claimant’s argument proceeds on a misunderstanding of the nature of the OR and its terms of reference. Furthermore, the challenge completely overlooks the environmental assessment already carried out in the Parliamentary proceedings on Phase 1 and which remain to be carried out for Phases 2a and b. There was no undertaking to carry out a “full assessment”, or any detailed assessment, of the environmental impacts in the review which was to be carried out over a 2-month period in the Autumn of 2019. Much detailed work remains to be carried out. (para [105]).

Interim injunction

The present proceedings stemmed from an application for an interim injunction to halt certain works pending a full judicial review of the issues and to seek permission to bring judicial review proceedings. The claimant had originally sought to obtain an injunction first thereby ‘pausing’ the works until the issues had been litigated. However, it became clear that the injunction could not be considered in isolation from the application to bring JR; both raised similar arguments relating to the prospects for success of the claim which inevitably leads to an analysis of the merits of the arguments.

The Court applied the usual tests set out in cases such as R (Medical Justice) v Secretary of State for the Home Department [2010] EWHC 1425 (Admin). One of the key tests is whether the claimant has shown ‘a real prospect of success’ on a least one of the claims. Given that the Court had dismissed every one of the claims as unarguable the outcome of this determination was never in doubt and the application was rejected. However, the Court ruled that, even if the claimants had demonstrated that one or more of the grounds was arguable, on the usual ‘balance of convenience’ test, it is likely that it would have declined to grant the injunction. Aside from the huge financial costs of the resultant delays (exacerbated by the afore-mentioned missing of a vital window for doing clearance work before nesting season) there was the not insignificant matter that such an injunction would conflict with powers conferred by Parliament.

[I]t is necessary to bear in mind that that harm has already been assessed through the Parliamentary process and it has been judged that the project should nevertheless proceed in the national interest. These considerations underscore why it has been so important for the court to grapple with the fundamental question of whether the grounds of challenge are legally arguable at this stage. (para [125])

Comment

The fact that the High Court was prepared to subject the ministerial decision and the Oakervee Review to even the lightest form of judicial review (‘light touch Wednesbury’) is surprising. The elephant in the room in this case which the Court did not confront was that the challenge was clearly an attempt to derail (pun intended) the entire project via the back door. Mr Packham was seeking a remedy which would have prevented the promoters and their contractors from exercising powers conferred by an Act of Parliament. In effect, this constitutes a challenge to the legality of that Act of Parliament, something which no court has the power to do.

Of course, it has to be conceded that a finding against the minister in this case would not necessarily have brought the Court into direct conflict with the legislature in this way. The Court might then have simply made a declaration that that specific part of the process was flawed. This might have served the interests of the claimant by embarrassing the Government and bringing increased political pressure to bear on it; but it would not have called a halt to the project. However, Mr Packham clearly wanted more than that in that he sought an interim injunction preventing the clearance of certain woodlands.

As noted above, the Court did not immediately dismiss the possibility of gaining an injunction in such circumstances out of hand. The Court stated that, had it been necessary to consider whether to grant injunctive relief, on the ‘balance of convenience test’ it is likely that it would have declined the application and allowed the works to continue. The Court then acknowledged the fact that such a remedy might conflict with the Act authorizing the works:

In any event, the clearance works were long ago authorised by Parliament and there is a strong public interest in ensuring that, in a democracy, activities sanctioned by Parliament are not stopped by individuals merely because they do not personally agree with them. (para [133])

This is not as emphatic as one might have expected. The fact that the Court even contemplated the possibility that the balance of convenience test could be applied suggests it was of the opinion that it is theoretically possible to obstruct the operation of an Act of Parliament by way of injunctive relief – this cannot be right. There was no suggestion that anyone involved in the scheme had exceeded their statutory powers thereby bringing ultra vires into play, the claim was designed to frustrate the operation of the Act itself. Moreover, even if one looks beyond the justiciability issue and considers the substance of the report itself, it is clear that the OR has to be viewed in the overall context of the decision making process. Irrespective of whether one looks at it subjectively or objectively, the OR cannot be construed as superseding the entire decision making process. It is a nonsense to assert that the process did not, at the very least, satisfy the ‘take account of’ environmental factors test. Indeed, as I argued in my previous post, the process has gone way beyond that minimal approach.

The case is now scheduled to be heard by the Court of Appeal on 8 July and I shall try and be quicker off the mark in terms of reporting on those proceedings.

Fresh HS2 Legal Challenge

Dave Bushell

I had hoped to leave HS2 alone for a while and catch up on other issues such as the world of franchising. However, further to my last entry on HS2 Mr Packham through his solicitors Leigh, Day & Co has launched the first stage of his judicial review of the decision of the Government to press ahead with the project in the light of the Oakervee Review. As a result I feel that I have little alternative other than to offer my initial observations.

The arguments

We now have a much clearer view of the arguments and it seems that the Oakervee Review is indeed at the heart of the challenge. It is contended that the Oakervee Review was flawed in that it failed to pay sufficient attention to the climate change implications of the project. For example, it is argued that issues such as emissions from construction machinery were largely overlooked as was the possibility of increased air travel arising from better regional airport connectivity (although, as regards the latter point one cannot help but point out that the Heathrow link was ditched!) Moreover, the challenge has been given added emphasis by the successful challenge in the Court of Appeal against the third runway at Heathrow again on climate change grounds.

It’s all about procedure

The main point to note is that this is all about the planning process and compliance with procedural requirements pertaining to the fulfilment of environmental requirements. As such it is slightly odd that the main focus appears to be on a policy document such as the Oakervee review. Leaving aside the argument set out in my previous post to the effect that it is doubtful whether such a document could be construed as resetting the entire decision making process, it is worth noting the Supreme Court decision in R (on the application of Buckinghamshire County Council and others) v Secretary of State for Transport [2014] UKSC 3, [2014] 1 WLR 324 (more on which later). Here it was held that a policy document which proclaimed the Government’s desire to build HS2 (Department for Transport, High Speed Rail: Investing in Britain’s Future – Decisions and Next Steps Cm 8247 (2012)) was not the planning decision which triggered the need for compliance with procedures pertaining to environmental protection (the need for a strategic environmental assessment in this case). Under the hybrid Bill procedure Parliament is the decision maker and it is the preparation of the Bill which triggers environmental assessment: see, for example, Lord Carnwath at [38]. Policy documents, advisory opinions, review panels, statements of intent and so forth in no way bind the hands of the decision maker.  Thus, the main focus needs to be on the adequacy of those planning procedures which do in fact govern the decision making process.

Heathrow 3rd Runway Case

Before turning to the HS2 case itself it is necessary to say something about the Court of Appeal decision on the third runway at Heathrow which has been credited as giving added impetus to the HS2 challenge: R (on the application of Friends of the Earth) v Secretary of State for Transport and others [2020] EWCA Civ 213. The decision is not quite as ground-breaking as has been made out and focuses on narrow procedural requirements. Heathrow expansion is being dealt with under the Planning Act 2008 rather than hybrid Bill procedure. The Act relates to large scale infrastructure projects and a crucial stage is the designation of a ‘national policy statement’ (NPS) by the Secretary of State which sets government policy and provides a firm framework for the next stages of the process: see Airports National Policy StatementSection 5(8) of the Act specifically requires the NPS to ‘take account of’ government policy on climate change. The NPS appeared to have taken account of the Climate Change Act 2008 (CCA 08) but, at the material time, the CCA 08 had not been amended to reflect the commitment which the Government had agreed to under the Paris agreement to hold ‘the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.’ In fact, there had been an express decision not to incorporate the exigencies of the Paris agreement in the NPS because it had yet to be incorporated into domestic law. This is where NPS fell short in that the Court of Appeal held that the  expression ‘government policy’ clearly goes beyond legislative measures and includes other commitments and decisions. The Court (perhaps sensing that people were likely to get carried away by the significance of the decision) bent over backwards to emphasise the point that it was doing nothing novel in requiring the decision maker to adhere to clearly set out procedural requirements in the planning legislation. As the Court said at [230] “…requiring the Crown to comply with what has been enacted by Parliament (in this case the obligations in section 5(8) of the Planning Act) is an entirely conventional exercise in public law.” Moreover, the Court was at pains to point out that, if the decision maker had in fact taken the Paris Agreement into account, the scope for judicial scrutiny of the manner in which he had done so would have been limited: “We repeat that the duty in section 5(8) does not even require the executive to conform to its own policy commitments, simply to take them into account and explain how it has done so.” (at [231]). Overall, it seems that there was a very specific procedural defect which is unlikely to reoccur thanks to this judgment and the fact that the CCA 08 has now been amended in any case so as to reflect the Paris Agreement. To this end the Climate Change Act 2008 (2050 Target Amendment) Order 2019 SI 2019/1056 substituted the existing target (to reduce the carbon account to 80% below the 1990 baseline) with a commitment to achieve a 100% reduction: see Explanatory Memorandum.

HS2 and Environmental Assessment

All in all the Heathrow case was a highly traditional judicial review decision with the Court seeing its role as one of ensuring that the decision maker adheres to the letter of the rules that have been set in terms of reaching the decision but largely steering clear of the substance of the decision. Thus, in turning to the HS2 project our focus must also be on compliance with the relevant procedures rather than the substance of the decision. As noted above, the HS2 project is subject to the hybrid Bill procedure. It is divided into 3 phases (notwithstanding the attempt to merge phase 1 with phase 2a) and the current state of legislation reflects these 3 phases. Thus, it is logical to look at each one in turn.

Phase 1

Legislation has already been enacted in respect of phase 1  of the scheme from London to  Birmingham and the West Midlands: the High Speed Rail (London – West Midlands) Act 2017. Standing orders for private and hybrid bills had to be adjusted to take account of the need for environmental assessment. At the material time the relevant legislation was set out in Directive 2011/92/EU on Environmental Impact Assessment and House of Commons Standing Order (SO) 27A.  An environmental statement was prepared in pursuance of these requirements and was submitted to Parliament with the Bill and its associated documents in November 2013. It must be conceded that climate change did not feature heavily in the 2011 Environmental Impact Assessment Regulations SI 2011/1824 which were applicable at the time. In fact, there was just one fleeting reference to ‘climatic factors’ in the list of factors which an environmental statement should cover. Furthermore, under environmental assessment the duty is to ‘consider’ environmental factors which is arguably even weaker than ‘take account of.’ Nevertheless, the environmental statement which was attached to the phase 1 Bill fully engaged with the issue and contained a detailed assessment of climate change factors: see HS2 Phase 1 environmental statement volume 5: climate change. Moreover, the documents show that the study was conducted in the light of the Climate Change Act 2008 and the pre-Paris commitment to reduce carbon emissions to at least 80% below the 1990 baseline. Finally, in the aforementioned judicial review proceedings of 2014, the Supreme Court held that the hybrid Bill procedure was fully compatible with the requirements of environmental assessment: R (on the application of Friends of the Earth) v Secretary of State for Transport and others [2020] EWCA Civ 213.

Mr Packham’s solicitors have pointed out that matters have moved on since this environmental statement was prepared in that the UK government signed up to the Paris agreement and has indeed now amended the CCA08 accordingly. However, this suggests that the CCA08 amendment has some form of retroactive effect which is capable of reopening planning decisions which have already been made in accordance with the law that applied at the time. In the absence of very clear and express words to that effect this is very doubtful to say the least. It is also interesting to note that in the Heathrow third runway case the Court of Appeal said at one point that there was no incompatibility between the pre and post Paris targets in that the 80% reduction target was expressed as a minimum (see [225]); in which case the targets might not be so different. In any event, under the UK constitution it is simply not possible for a court to strike down an Act of Parliament.

Phase 2a

That brings us to phase 2a of the scheme which extends the line beyond the West Midlands to Crewe. As noted in my previous post on the issue the relevant legislation was introduced in the House of Commons in July 2017: the High Speed Rail (West Midlands – Crewe) Bill 2017-19 to 2019-21. The Bill progressed as far as the appointment of s select committee in the House of Lords to hear petitions before the dissolution of Parliament ahead of the December 2019 General Election. Both House of Parliament have now passed revival motions which means that the Bill does not have to be re-introduced and can be taken forward from where matters were left off. The environmental statement associated with this Bill was prepared in accordance with the more recent Environmental Impact Assessment Regulations 2017 SI 2017/571 which makes far more extensive references to climate change than its predecessor. As one would expect, the phase 2a environmental statement contains a detailed analysis of climate change issues and, notwithstanding the fact that the statement was prepared ahead of the amendment of the CCA 08, the Paris Agreement and the Government’s commitments there-under are expressly referred to: see, for example High Speed Rail (West Midlands – Crewe) Environmental Statement: Volume 3: Route Wide Effects where it is referred to throughout section 4 on climate change.

Phase 2b

As regards phase 2b concerning the completion of the line to Manchester and the other arm of the ‘Y’ shape to Leeds the project is under review and has been bundled up with the Northern Power House Rail Project so as to integrate HS2 with improving connectivity between Northern Cities. Hence planning is at a much earlier stage and the original proposals may be subject to extensive change. However, this means that there can be no doubt whatsoever that environmental assessment, which is currently at a ‘working draft’ stage (and clearly subject to major revisions if there are changes to route and project specifications etc) will be conducted according to the latest climate change policies. Indeed, as one would expect, the current working draft is already replete with references to the Paris Agreement: See High Speed Rail (Crewe to Manchester and West Midlands to Leeds) Working Draft Environmental Statement – section 4 on climate change.

Conclusion

Phrases such as ‘take account of’ and ‘consider’ environmental effects such as climate change arguably set the bar relatively low in terms of what the decision maker must do although they certainly go beyond paying mere ‘lip service’ to them. Provided that there has been some form of proper assessment which has been filtered into the decision making process the Court of Appeal has made it clear in the Heathrow case that the Court will be extremely chary about intervening in the actual substance of the decision:

As we have said, we are required – and only required – to determine whether the Divisional Court was wrong to conclude that the ANPS was produced lawfully. Our task therefore – and our decision – does not touch the substance of the policy embodied in the ANPS. In particular, it does not venture into the merits of expanding Heathrow by adding a third runway, or of any alternative project, or of doing nothing at all to increase the United Kingdom’s aviation capacity. Those matters are the Government’s responsibility and the Government’s alone. (at [282].

There can be no doubt that the environmental statements prepared in respect of HS2 go far beyond minimal requirements. With a subject as complex and controversial as climate change it will always be possible to find experts who may disagree with the technical data or conclusions drawn in an environmental study; but this is not sufficient to impugn the decision.

In conclusion, there is simply no mileage at all in the argument that the HS2 project has not taken sufficient account of climate change issues and has ignored the requirements of the Paris agreement. To take the Oakervee review document in isolation and ignore the extensive assessments which have been carried out (or are still underway) in respect of all three phases of the project is nonsensical in the extreme.