Herbert Smith wins legal challenge for Virgin on rail franchise dispute
Herbert Smith Freehills has won a legal challenge on behalf of Virgin Rail Group, after the Government scrapped its decision to award control of the West Coast Main Line franchise to rival operator FirstGroup. Virgin Rail - a collaboration between Virgin Trains and Stagecoach, a longstanding Herbert Smith client - issued court proceedings in August when it lost the bid to continue operating the service, after the Government awarded rival FirstGroup the £5.5bn contract from December 2012 to 2026.
October 03, 2012 at 05:56 AM
2 minute read
Herbert Smith Freehills has won a legal challenge on behalf of Virgin Rail Group, after the Government scrapped its decision to award control of the West Coast Main Line franchise to rival operator FirstGroup.
Virgin Rail – a collaboration between Virgin Trains and Stagecoach, a longstanding Herbert Smith client – issued court proceedings in August when it lost the bid to continue operating the service, after the Government awarded rival FirstGroup the £5.5bn contract from December 2012 to 2026.
The Department for Transport (DfT) has now backtracked on its plans, with Transport Secretary Patrick Mcloughlin today (3 October) issuing a statement admitting "deeply regrettable and completely unacceptable mistakes made by [his] department in the way it managed the process".
London dispute resolution partner Nusrat Zar led the Herbert Smith team working on the matter. The firm had instructed Blackstone Chambers' Michael Beloff QC and 11 King's Bench Walk's Nigel Giffin QC as counsel.
Eversheds has acted for the DfT, with litigation partners Mark Rhys-Jones and Nicola Williams comprising the firm's team alongside Michael Bowsher QC of Monckton Chambers.
Two independent reviews into the process will be conducted, and the competition will be re-run as soon as the mistakes are verified. The Government has said that it will reimburse the four companies the £40m it cost to bid for the franchise for the West Coast route, which serves around 30 million passengers a year.
In a statement, Virgin founder Richard Branson commented: "We also appreciate the DfT publicly acknowledging these errors, and are hopeful they will now accept that Virgin Trains should carry on running the West Coast Main Line and ensure that passengers continue receiving our team's award-winning service."
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