Stagecoach ‘disappointed’ by High Court ruling on rail bid ban

posted by Charlie Hart
18 June 2020

Stagecoach has said it is “disappointed” by the High Court’s decision to rule against the company after it was banned from bidding on three rail franchises. 

The firm failed in its attempt to sue the UK government after the Department for Transport (DfT) excluded Stagecoach from bidding on the East Midlands, South Eastern and West Coast Partnership services amid a row over pension liabilities.

Stagecoach claimed the government had acted unlawfully in the way it conducted the procurement process. According to the Financial Times, in written submissions to the trial, Stagecoach said the government “sought to impose uncertain and potentially enormous pensions risks on bidders”. 

The DfT argued Stagecoach had submitted “non-compliant bids” which “breached established rules” around pension provision.

In a judgment, Justice Stuart-Smith dismissed Stagecoach’s claims, ruling that bidders “would have realised that material non-compliance on pensions gave rise to a serious risk of principled disqualification”.

Stagecoach said it accepted the High Court’s decision, but added: “We believe there were important issues which needed to be determined by the court to help secure the future of the country's rail system and our view remains that we were right not to accept the risks in these contracts.”

A DfT spokesperson welcomed the decision, adding the “franchise process was fair, our conduct was transparent, and the disqualification at the heart of this case was proportionate”.

Stagecoach had been joined in the legal action by Virgin Group and French state-owned rail company SNCF.

A separate case had also been filed in court by Stagecoach’s competitor Arriva earlier this year. However, Arriva reached a settlement with the DfT over its disqualification to bid on the East Midlands franchise and withdrew its claim.

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