Court ruling

Judge rejects Stagecoach and Virgin franchise claim

Sir Brian Souter

Sir Brian Souter: lost case

The high court has ruled against Stagecoach’s claim that the UK government was wrong to prevent the company bidding for three rail franchises because of a dispute over pensions.

The rail operator sued the Department for Transport (DfT) for disqualifying it from bidding for the East Midlands, West Coast and South Eastern franchises for refusing to accept the risk of pensions liabilities proposed by the Government.

Virgin joined the lawsuit after its joint bid with Stagecoach to renew their contract to run the West Coast Main Line, which runs from London to Glasgow, was blocked at the 11th hour last year.

The companies refused to commit to taking on the long-term pensions liabilities of rail workers, claiming it was the first time firms had ever been asked to do so.

The Stagecoach claims were thrown out today in a judgement delivered remotely by Mr Justice Stuart-Smith.

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TSSA General Secretary, Manuel Cortes said: “This is to be welcomed. Thankfully the privateers’ gravy train has finally hit the buffers. The Government now needs to finish the job by bringing our railways lock, stock and barrel into public ownership.”

A Virgin Group spokesman said about the failed West Coast legal case: ‘As a partner of SNCF and Stagecoach in the bid for the West Coast franchise, this ruling is not the outcome we hoped for, but we accept the decision.’

‘We would like to thank the incredible Virgin Trains employees for their outstanding customer service and commitment that enabled Virgin Trains to lead the industry for more than 20 years.’

Stagecoach said the company was ‘disappointed’ in the ruling.

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