Stagecoach East Midlands Trains Ltd & Ors v The Secretary of State for Transport

Public-law challenges to the validity of administrative decisions must generally be brought promptly by judicial review. That principle does not convert an independent private-law claim for damages arising from the same facts into a judicial-review claim. Where the obligation is enforceable as breach of statutory duty, the ordinary limitation period applies unless legislation provides otherwise.

Private-law remedies must not be used to replicate or bypass a public-law challenge which legislation or the rules require to be brought by judicial review. The court may nevertheless retain and determine private-law claims, including damages claims, even where the claimant cannot directly challenge an earlier public act out of time. Earlier procedural decisions may also be relied on when challenging a later decision, where the principles in R (Burkett) v Hammersmith and Fulham LBC and R (Eisai Ltd) v NICE may apply.

Four groups of train operating companies brought related Part 7 claims and judicial review proceedings concerning rail-franchise procurements conducted by the Secretary of State for Transport. The claims challenged the tender design, later pension requirements, the treatment of bids and the claimants’ disqualification.

The defendant applied to strike out or obtain summary judgment on parts of the claims. He argued that both public-law and private-law complaints were subject to a three-month period, or that the private-law claims were an abuse of process because they bypassed judicial review. The central issues were the applicable limitation period, the relationship between public and private law, and the extent to which earlier procurement decisions could be relied on in challenges to later decisions.

1. Private-law limitation. The claims for damages arising from duties derived from EU law were claims for breach of statutory duty subject to the Limitation Act 1980. Section 2 therefore provided a six-year limitation period. There was no basis for transposing the shorter periods in the procurement regulations because railway-franchise procurements had deliberately been excluded from those regimes and no specific period had been enacted for them.
2. The fact that the defendant was a public authority, or that the same facts could support judicial review, did not make the private-law claims public-law claims. A claimant was not required first to obtain a quashing order or other prerogative remedy before pursuing an independent claim for damages. The reasoning in Phonographic Performance Ltd v Department of Trade and Industry was followed and substantially endorsed by Energy Solutions v Nuclear Decommissioning Authority.
3. Public-law limitation and earlier decisions. A direct challenge to an earlier public act outside the three-month period could not ordinarily be brought. However, for the purposes of a challenge to a later decision, it was arguable that earlier procedural defects could be relied on under the principles in R (Burkett) v Hammersmith and Fulham LBC and R (Eisai Ltd) v NICE. The issue was fact-sensitive and unsuitable for determination on strike out or summary judgment.
4. Abuse of process. It would be an abuse to use private-law remedies to replicate the effect of a public-law challenge which had to be brought by judicial review, without submitting to the substance of the judicial-review procedure, including its time limits and permission requirement. That principle applied to purely public acts, but the present claims also engaged private-law rights.
5. Declarations and injunctions were discretionary cross-over remedies. Their inclusion in Part 7 proceedings was not necessarily abusive where the proceedings engaged both public and private law. Nevertheless, an order requiring the defendant to restart the procurement was inappropriate: the court could set aside an unlawful decision, but the consequential decision whether to restart the procurement remained for the defendant.
6. The applications were therefore substantially refused. The words “and/or restart the Procurement on a lawful basis” were struck out from the equivalent Stagecoach and Arriva relief, while the remaining challenged pleading and relief was permitted to proceed.