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30 August 2012 at 11:50 BST

Virgin launches legal action over lost rail contract

Virgin Trains has instructed London-based global law firm Herbert Smith to challenge the UK government in court following minsters' decision to award the West Coast main line franchise to rival operator FirstGroup, the company announced yesterday.

Virgin Trains: all aboard the judicial review

Virgin claimed it had ‘no choice’ but to begin a judicial review of the decision, which takes effect on 9 December, according to the Out Law web site – the news outlet of UK law firm Pinsent Masons.

Flawed process

In a blog post, Virgin Group founder Richard Branson said that the Department for Transport (DfT) had ‘ignored the substantial risks to taxpayers and customers of delivering FirstGroup’s bid over the course of the franchise’, and also added that they ‘hoped that Parliament or an external review would be able to scrutinise this badly flawed process before the franchise was signed’.
Pinsent Mason’s transport law expert Patrick Twist noted that Virgin will find it difficult to prove the government’s decision was unlawful. He said: ‘Mr Branson will need to show that there was something wrong with the process or that the decision was irrational such that it was wholly unreasonable for the department to have decided as it did.’

Right decision

In a statement, FirstGroup said that it had ‘every confidence’ in the DfT's process, and pointed out that there had been ‘no complaint ... until Virgin Rail Group had lost commercially’.
A spokesman for the DfT said that the Department was ‘confident’ its process was robust and had led to ‘absolutely the right’ decision for taxpayers and passengers.

 
   
 
 
 

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