The Secretary of State for Transport v Arriva Rail East Midlands Ltd ("Arriva")

A claim for Francovich damages based on a public authority’s breach of EU-law duties is a private law claim for breach of statutory duty. It is subject to the six-year limitation period in the Limitation Act 1980, not automatically to the three-month period for judicial review. The claimant need not first obtain judicial review or invalidate the public decision that caused the loss.

In an ongoing procurement, the time for any judicial review challenge depends on when grounds first arose. A tender document or interim instruction may found a claim, but it does not invariably do so. The issue is fact-sensitive. Claims for injunctions intended to undo a public decision may, unlike damages claims, require compliance with the judicial review time limit.

The Secretary of State ran competitions for the East Midlands, South Eastern and West Coast rail franchises. He disqualified the respondent train operators on 9 April 2019 after tender processes involving pension requirements set out in invitations to tender and later re-bid instructions.

The operators commenced Part 7 proceedings, principally seeking damages for breach of statutory duty, and materially identical judicial review proceedings. All proceedings were begun within three months of the disqualifications, but not within three months of the earlier tender documents and re-bid instructions.

Stuart-Smith J refused to strike out the complaints concerning those earlier stages: [2019] EWHC 2047 (TCC). The Secretary of State appealed, contending that all claims impugning the earlier stages were subject to the judicial review time limit and that the time had necessarily begun when each earlier decision was made.

1. Appeal dismissed. Coulson LJ, with whom Sir Rupert Jackson and Newey LJJ agreed, upheld the refusal to strike out the respondents’ claims.
2. A Francovich damages claim under section 2(1) of the European Communities Act 1972 is a private law claim for breach of statutory duty. It seeks compensation for the consequences of an unlawful act; it does not seek to undo that act. It is therefore governed by the six-year period in section 2 of the Limitation Act 1980. A claimant need not bring, still less succeed in, judicial review before pursuing such damages. The contrary argument confused the distinct functions of public law control and private law damages.
3. The procurement regimes containing short and integrated time limits did not apply to railway franchising. The court could not select their time-limit provisions by analogy, nor shorten the statutory limitation period through an equivalence or effectiveness argument. The pleaded complaints about the earlier tender stages and the disqualification were inextricably mixed within a single damages claim.
4. Different considerations may govern discretionary cross-over relief. An injunction whose real effect is to set aside a public decision may be an abuse if used to evade judicial review procedure and its time limits. Whether a declaration or injunction is abusive depends on all the circumstances. Declarations supporting damages will usually differ from injunctive relief affecting public decisions or third-party rights.
5. There is no automatic rule that the three-month period in CPR rule 54.5 began when the invitations to tender or re-bid instructions were issued. In a continuing procurement, an earlier act may or may not complete the relevant cause of action. The issue depends on the facts, including whether the process remained fluid and whether a challenge would have been premature. The judge was entitled to leave that issue for trial insofar as it remained material.

• Court of Appeal (Civil Division) — dismissed the Secretary of State’s appeals and upheld the refusal to strike out the relevant claims: [2019] EWCA Civ 2259.
• High Court, Technology and Construction Court — Stuart-Smith J refused, save for limited unappealed matters, to strike out the respondents’ Part 7 claims concerning earlier stages of the franchise procurements: [2019] EWHC 2047 (TCC).