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Naomi Ling, as specialist pensions counsel, successfully defends DfT in High Court

As part of a team of counsel, Naomi Ling has successful defended Department for Transport against a challenge to their process of awarding rail franchises.

Naomi Ling acted as specialist pensions counsel as part of an 11 strong counsel team defending the Department for Transport against a challenge to the 2019 rail franchising process. Arriva, Stagecoach and Virgin Trains (the latter acting as part of a consortium) were disqualified from the competitions from the East Midlands and South Eastern and West Coast Partnership rail franchises because they had failed to submit bids that were compliant with the pensions requirements. They challenged this decision, claiming that the Secretary of State had acted unlawfully in requiring them to assume uncertain future pensions liabilities.

High Court Judgment

In a 193 page judgment handed down on 17 June 2020, Mr Justice Stuart-Smith ruled in favour of the DfT on all grounds. He held that, notwithstanding the uncertainty of the pensions liabilities and the risk that bidders were asked to assume, the pensions terms of the tender met the requirements of transparency and fairness, that the process followed was compliant with the relevant regulatory framework and principles of proportionality and equal treatment, and that the Department had acted lawfully in disqualifying the claimants and awarding the franchises to the winning bidders.

As with most outsourced services, the DfT requires bidders to assume future pensions liabilities within the RPS, the sectionalised defined benefit scheme of the rail industry. Uncertainties as to future funding requirements arose following the Pensions Regulator’s involvement with the RPS from 2014. TPR has said that the trustees of the RPS have overstated the covenant strength of the scheme on the understanding, which TPR and DfT do not share, that the government ultimately provides support to the RPS which is a private sector scheme. The ultimate resolution of this separate issue has yet to be achieved.

The Lawyer’s top 20 cases for 2020

The case was included in the Lawyer’s list of top 20 cases for 2020.

Find Out More

Naomi is a leading junior in UK employment law and pensions law. Naomi acts for employers, trustees, employees and statutory authorities on a range of different pensions issues. Naomi also holds an appointment on the B Panel of the Attorney General’s Counsel.

To find out more about Naomi, please contact David Smith on (+44 (0)20 7427 4905) or Colin Bunyan on +44 (0)20 7427 4886 for a confidential discussion.

News, Pensions 18 Jun, 2020

Authors

Naomi Ling

Call: 2001

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