Exclusive: Transport’s legal costs revealed as sector faces more scrutiny

The annual cost of defending transport schemes against legal challenges has seen a dramatic rise, with one infrastructure organisation seeing costs more than treble in five years, figures obtained by Highways reveal.

Using information gained through Freedom of Information requests, Highways asked HS2 Ltd, Highways England, Transport Scotland and Network Rail how much they had spent in each of the last five years defending legal challenges to decisions and policies brought by external parties.

The request related to each organisation’s operation, maintenance, development and construction of infrastructure.

It excluded matters such as 'accidents', personal injury claims or staffing issues, such as employment tribunals. It also excluded routine legal costs such as those associated with land purchase.

Transport Scotland’s statistics present the clearest picture of legal defence costs for an owner and operator of established transport infrastructure. They show a substantial increase every year. Costs in 2020 were more than three times higher than in 2016 - a 233% increase.

The costs include defending actions arising from operating and maintaining Scotland’s trunk road network, such as flooding, which damaged personal property, Transport Scotland said.

‘They also reflect expenditure incurred in the preparation and defence against actions raised by contractors, for example adjudications and commercial actions in the Court of Session, in the course of delivering construction contracts, and expenditure incurred in the preparation and defence of claims raised by external parties in the Lands Tribunal for Scotland arising from the compulsory acquisition of land for trunk road projects.’

It adds: ‘Disputes are not unusual in contracts and it is important that Transport Scotland receives specialist advice on issues raised by contractors. Given the potential value, complexity and length of disputes/actions, it is necessary to acquire the services of legal professionals at an early stage and throughout the process to deal with matters efficiently and effectively.’

Highways England was unable to collect the statistics requested within the limit on staff hours for processing an individual FoI request.

However, it provided statistics for defending judicial review (JR) proceedings only, the total being £320,648.53 from 2016 to 2020. It recovered some of that spend because it always seeks to recover its costs after successfully defending a challenge.

Network Rail was unable to provide any figures because its costs database provides ‘no way to tell if costs incurred for a legal matter are a result of defending a legal action’. However, an earlier FoI request shone a spotlight on the costs Network Rail can incur in defending something as small as a closure of a foot crossing.

A public inquiry found that a public right of way existed where a crossing at Deganwy, near Llandudno, was closed in 2011. Network Rail appealed to the High Court and Supreme Court, losing in both. Its legal and court costs total £282,043, including Welsh Government costs it is liable for.

HS2 Ltd’s expenditure of almost £6m over five years reflects the controversial nature of constructing a railway along England’s spine. While attempts to halt Phase 1 in the courts are over, further challenges can be expected to future phases and possibly local construction works.

HS2’s procurement practices have also been challenged, most recently with the High Court dismissing a challenge from Bechtel.

Last July, the UK Government commissioned an independent review of trends in JR and possible reforms. According to former Treasury Solicitor Sir Jonathan Jones, the FoI Act, which came into force in 2005, has subjected the civil service’s work to ‘much closer scrutiny’, leading to more challenges.

Judicial review facing reforms 

High-profile attempts to halt HS2 and Heathrow Airport’s third runway in the law courts are only part of the picture. Applications for judicial review have increased so substantially that the UK Government is now proposing curbs. Costs are also incurred during disputes between clients and contractors.

Transport project promoters may feel that objectors have other forums to raise concerns, ranging from local Traffic Regulation Orders and planning applications to public consultations, public inquiries and Parliamentary scrutiny of legislation. Objectors, however, say the procedures are insufficient to prevent advice or obligations from being ignored in policy decisions.

The use of JR to query government decisions, practices and policies increased from 4,200 claims to over 15,600 between 2000 and 2013. Most were immigration-related.

The Government’s response to the review of the system noted that the Department for Transport (DfT) had dealt with 70 to 80 threatened JR claims since early 2016/17.

Of these, 35 to 45 were either withdrawn or never made. Of the claims that were made, two were decided in favour of the claimant, one was settled and 12 successfully defended. The DfT estimated it had spent about £3m defending JRs in relation to Heathrow expansion alone.

Introducing a consultation on JR reforms in March 2021, justice secretary Robert Buckland wrote: ‘We are implementing our manifesto commitment to “ensure that Judicial Review is available to protect the rights of the individual against an overbearing state, while ensuring that it is not abused to conduct politics by another means or to create needless delays.

‘The [review] panel’s analysis identified a growing tendency for the courts in judicial review cases to edge away from a strictly supervisory jurisdiction, becoming more willing to review the merits of the decisions themselves, instead of the way in which those decisions were made. The reasoning of decision-makers has been replaced, in essence, with that of the court. We should strive to create and uphold a system which avoids drawing the courts into deciding on merit or moral values issues which lie more appropriately with the executive or Parliament.’

Kicking and screaming towards transparency

However, some of the groups resorting to legal challenges believe they are taking necessary action to ensure official bodies abide by relevant obligations and law.

They cite the DfT’s recent admission, under threat of legal challenge, that transport secretary Grant Shapps did not follow correct procedures when he authorised the A38 enhancement project in Derby, and the High Court ruling that the DfT’s consent for reopening Manston Airport, Kent, did not include adequate reasons for disagreeing with the examining authority’s recommendation to refuse consent.

JR reforms will come too late to prevent Transport Action Network’s case against Highways England’s Road Investment Strategy 2 on the grounds that RIS2 does not meet the UK’s obligations to reduce carbon emissions.

Director Chris Todd said: ‘The Government had to be dragged, kicking and screaming, through the courts by Client Earth before it started taking proper action on tackling air pollution, which is still not within legal limits well over a decade after it should have been.

‘It’s difficult for the general public to be able to raise the funds and have the time and energy to hold the Government to account for things it should be doing.’

Lawyers acting pro bono often support challenges from charities such as Client Earth. Crowdfunding is an option but last year it raised just £8,920 of the target £50,000 for a legal challenge on air quality by groups including Mums for Lungs and the Good Law Project.

Mr Todd pointed out that the Government has signed many international treaties and obligations, including those relating to the Stonehenge & Avebury World Heritage Site.

‘If it’s going to start breaking those treaties, people must have the right to take it to court, otherwise it’s completely unaccountable. A vote every five years is only one element of democracy. You have to have much more in between,’ he said.

Highways asked Mr Todd: 'Objectors to the A303 tunnel near Stonehenge had their say at the project’s examination, so why should they have another bite of the cherry in the courts?'

He responded that the examining authority advised against proceeding with the project. ‘That [advice] was thrown out by Grant Shapps. For him to say he’s going to build it anyway completely undermines the democratic process.’

In such instances, he suggested, many people see legal action as necessary to prevent miscarriages of justice.


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