With effect from 12 January 2007, Condition G “Network Change” was significantly revised and expanded. Extracts from, and commentaries on, previous determinations, have, as far as practicable, been aligned with the relevant provision in the current version of Part G. Items that are not considered to have direct bearing on the modern provisions have not been included.
Network Code Section |
Determination |
Date of Hearing |
Points made within Determination
(Verbatim extracts given in Italics)
|
|
Procedural Point |
AD1 |
December 1995 |
Committees
(Access Dispute Resolution Committee & NVC) have had to consider a number
of cases where one party contends that an issue ought to be handled under
Track Access Condition G Network Change, and the other maintains that it does
not merit this. “The Committee …considered that Part G of the [Network Code] provides for either party Train Operator or [Network Rail] to bring a matter into the jurisdiction of Part G of the [Network Code]. [Network Code] had obligations in relation to the discharge of Condition G1. The Committee was of the view that the force of Condition G2 and [G2.1.1](a)(ii) and (iii) in particular, is that, if a Train Operator considered that it was faced with a change, it could cause that implementation of that change be made subject to the provisions of Part G of the [Network Code]. In other words
the Committee was of the view that it was the operation of Part G of the
[Network Code], including where necessary reference under Condition [G11] to
the [relevant ADRR Panel], that would determine the materiality of the
change”. {AD1} |
|
Procedural Point |
ADA17 |
October 2013 |
”…. The Part D and Part G processes are
not linked or chronologically interdependent.” ADA17, para. 6.6 |
|
Procedural Point |
ADA17 |
October 2013 |
The relevant Network Change was proposed
in January 2013 and this hearing took place in October 2013. During the hearing, the Hearing Chair
proposed to ask the Dispute Parties to provide further information. Network Rail contended that the process
provided plenty of opportunity for all this to have been done, and that rules
of law, the Human Rights Act, etc. meant that it might not be fair process to
now adjourn the Hearing to require further information. The Hearing Chair replied that the ADRR
procedure allowed the Hearing Chair to request further information; this was
permitted and envisaged under the Rules.
Further, “I considered it necessary for a fair and competent
determination of the issues in dispute to exercise the power afforded by the
ADRR to require this further information.”
ADA17, paras. 5.93 and 6.29 |
|
DEFINITIONS “Network Change” |
NV33 |
November 2001 |
14. “In relation therefore to all these
considerations, the Committee offered the following summary of its position
in relation to "Network Change", in terms of Condition G definition
[(a)(i)]: 14.1 the Network is that which Railtrack
supplies to Train Operators to allow them to operate services in fulfilment
of their rights (including Firm Contractual Rights) expressed in their Track
Access Agreements; 14.2 Railtrack, as the “operator of the Network” must carry out all such tasks as it
deems necessary to ensure that the Network is sustained at the level where
Train Operators can operate services in fulfilment of the rights (including
Firm Contractual Rights) expressed in their Track Access Agreements; 14.3 the manner in which Railtrack carries
out, or varies the carrying out of, the “operation
of the Network” is a matter for its discretion, provided only that it
accepts that it is accountable where the exercise of that discretion may have
an impact on a Train Operator; 14.4 if, whether at the time of a change or at
a later date, the Train Operator is confronted by changed circumstances, such
that, for a prolonged period, the Network is no longer sustained at the level
where the Train Operator can operate services in fulfilment of the rights
(including Firm Contractual Rights) expressed in its Track Access Agreement,
then, given that the changed circumstances “materially … affect the operation
of the Network, or of trains operated by that operator on the Network”, it is
reasonable to conclude that the Train Operator has been the recipient (or
victim) of a "Network
Change", in terms of Condition G definition [(a)(i]).” {NV33} “11.
With regard to "a change to the Network” the Committee took particular
account of the fact that there is no presumption in the definition that the
change itself is anything major; indeed, the notes supporting the Regulator’s
decisions in respect of the re-issue of the Track Access Conditions in 1995
state “we have deleted the word
“material” the first time it appears:
the key point is whether the effect is material, not the change itself”. {NV33} |
|
DEFINITIONS “Network Change” |
NV33
Findings of Regulator on appeal |
June 2004 |
NOTE.
Some aspects of determination NV33 were appealed to the Regulator, who
handed down his judgment in June 2004.
As regards the findings of NV33 reproduced above, these were not
affected by the Regulator’s findings.
However, the Regulator did lay down, in the context
where he had been asked to assume that GNER “was able to prove what it
alleged”, and therefore “whether, on those assumed facts,
Network Rail had carried out, or allowed to occur a change to the network
without following the established procedures – in Part G of the network code
– for the authorisation of such changes” that (1) A
deterioration of the condition of the network is capable of qualifying as a
change to any part of the network within the meaning of [Network Change
definition (a)] of Part G of the Network Code. (2)
The alleged changes in Raitrack’s
policies and/or practices for maintaining, renewing, monitoring, and
inspecting the infrastructure were both individually and in combination
capable of amounting to “changes to the operation of the Network…or a
series of such changes” within the meaning of [Network Change definition (a)] of Part
G. (3)
… (4)
… (5)
Railtrack’s programme of track and
other infrastructure renewal after the Hatfield derailment was capable of
amounting to a “change…to…any part of the Network”
within the meaning of. [Network Change definition (a)] of Part G. The Rail Regulator’s judgment in Network Rail
Infrastructure Limited –v- Great North Eastern Railway Limited [2003]. |
|
DEFINITIONS “Network Change” |
ADA07 |
August 2011 |
This determination explored the definition of
“Network Change” at length. |
|
DEFINITIONS “Network Change” (b) |
ADP40 |
October 2009 |
“19 The Panel members were agreed that the
question is whether the changes of which FSR complain fall within paragraph
(b) of the definition of Network Change.
They do, and therefore amount to a Network Change if, but only if,
three conditions are satisfied – 19.1 they must involve a “change in the
operation of the Network”, being a change not falling within paragraph (a); 19.2 they must be “likely materially to
affect the operation of trains operated by” FSR on the Network; and 19.3 they must have lasted or be likely
to last for more than six months. 20. The
Panel noted that in Network Rail
Infrastructure Limited v. Great North Eastern Railway Limited the Rail
Regulator determined that “The alleged changes in Railtrack’s policies and/or
practices for maintaining,
renewing, monitoring and inspecting the infrastructure were both individually
and in combination capable of amounting to “changes to the operation of the
Network ... or a series of such
changes”.”
{ADP40] The
ADP40 Panel were not unanimous in their decision and the hearing Chairman
made his own determination of the answers to the above questions. That determination was appealed to the
ORR. |
|
ORR Determination |
May 2010 |
“the operation of the Network” “ORR's
conclusions 47.
…, ORR has concluded that
it is clear that the ordinary and natural meaning of the words requires the
'operation of the network' to be understood in a general sense and in
context. To fall within
this limb of the definition, a 'change' to that operation, whether it be a
decision or activity, must
affect the running of the network in a practical sense and in some
appreciable manner, which departs from the normal variations experienced on a
regular, day-to- day basis. For that reason, while NR's approach to the first
limb is unduly narrow
in its understanding of 'change,' FSR's approach, which does not adopt an overview of the 'operation
of the network' is
too broad, as
its responses to some of the hypothetical examples indicated. For example, in
all examples, it considered the rescheduling of the same maintenance to be
encompassed by the definition. 48.
ORR
recognises that establishment of whether or not a particular change does
amount to a departure from the normal running of the network so as to satisfy
the first limb of the definition will involve a degree of judgment and will
depend very much on the particular facts effect on the operation of the
trains in question, since the diversion necessitated the use of a completely
different route, the omission of stations, different route knowledge and the
use of two locomotives to enable entry into Euston statlon" It also
considered the fact that the operation of trains on the diversionary route cost
FSR up to £250,000 more per year to be a relevant factor in the assessment of
materiality, irrespective of whether that cost could be compensated under
Schedule 4 or not.” “likely
materially to affect the operation of trains operated by…that Access
Beneficiary on the Network;” ORR's analysis - materiality 51.
….
ORR agrees with FSR that the requirement is for there to be a 'material effect' on the operation of
trains rather than an effect on a material number of trains. Beyond that,
however, there
is no more prescriptive guidance as to materiality expressly provided by the
contractual wording. 52.
Both
parties were agreed that in this context, 'material' means an effect which is
not insignificant and more than trivial. ORR agrees with that approach.
However, this does not provide a full guide to the meaning of the word for
the purposes of the definition, as the word needs to be interpreted in
context. The definition requires the change materially to affect trains
operated by a particular operator. ORR considers the assessment of whether
that test is satisfied to involve an assessment of the extent of the impact
of a change on the operation of those trains affected by that change, in the
wider context of the trains or service operated by that operator. It follows
that consideration of whether the effect is indeed material will depend very
much on the facts of each case. 53.
In
the present case, ORR
considers that the diversion of a weekend sleeper service (consisting of four
trains, two
in each direction) via a completely different route, with the consequent
requirement for different route knowledge and a different locomotive
formation and the inability to provide a service for customers (some of whom
would be regular customers on a sleeper service) at the intermediate stations,
at an additional cost to FSR of up to £250,000 are all factors which would support a conclusion
that the effect of this particular change on trains operated by FSR was
material. 54.
Further, it should be noted
that, in
ORR's
view, there is a qualitative and not merely numerical aspect to consideration
of materiality. As
was argued at the hearing, certain services may be of such significance or
uniqueness that, although they might represent a small proportion of the
overall number of services operated, the effect of their alteration or cancellation would
be disproportionate to the percentage of overall services which they
represent. If this is the case, it would have a bearing on the assessment of the
materiality of the effect of any change.2o In the present case, ORR is persuaded that
the weekend sleeper services affected do possess such a significance. 55.
Against
that, ORR has also considered those factors which do not support a finding of
materiality in the present case: in particular, the fact that only two trains
in each direction per week, representing only 4.5% of FSR's total sleeper
services, are affected and that, as FSR admitted, a limited number of
passengers use the intermediate stations omitted as a result of the
diversion. Further, the diversion does not result in a breach of FSR's
Service Level Commitment in its franchise ". ORR's conclusions 56.
The
assessment of whether a change is material involves an exercise of judgment.
Taking all relevant information into account and having regard to the competing
factors, ORR considers that the factors in paragraphs 53 and 54 above
outweigh the factors in paragraph 55 and concludes that, in the present case,
the change from single to double line block closures is indeed 'likely
materially to affect the operation of trains' operated by FSR. (ii) has lasted or is likely to last
for more than six months,” ORR's
analysis - duration 64.
ORR
is not satisfied that NR's approach to this limb of the definition is correct. There is
nothing on the face of the wording to support the implication of a
requirement of continuity. The definition simply refers to a change which has lasted or is
likely to last for more
than six months. This
is clearly a phrase which concerns overall duration. Further, the overall duration is that of the 'change' in question. The
duration is not simply linked to the carrying out of any discrete activity. Therefore, where the change which
has an impact on an operator is one of policy or instruction, the change will begin
when the policy comes into effect and will
end when the policy ceases to have effect. 65.
Further,
the wording
of the provision does not support an artificial limitation of that duration
to one timetable period. If the overall duration is known to be likely to
amount to a number of years or the foreseeable future, this is the period of
time for which the
change,
on its
natural and ordinary meaning of the words 'is likely to last.' ORR's conclusion 66.
Therefore, ORR concludes
that, in the present case, the change to the pattern of possessions from single
to double line blocks is one which 'has lasted' or is 'likely to last' for more than six months. 67.
Applying the analysis in paragraph 64, the change started when the plan to continue to take
the possessions (after the completion of the WCML project) came into effect. The
parties are agreed that NR's plan is intended to last 'for the foreseeable
future,'
and it is,
therefore, likely to last for more than six months. The argument before ORR focused on whether
or not any change was 'likely to last' more than six months. However, ORR notes that, on its analysis of the
application of this limb of the definition, the period of change
has already lasted for six months.
68.
It follows from the above analysis that the change from single to double line
blocks under consideration in this appeal does satisfy the definition of 'Network Change' as set out in the Code. However, it should also be
clear from the above analysis, that this is a decision which turns on its facts. The
definition needs to be applied to cases on an individual basis. It is not a
definition which clearly excludes or includes certain categories or types of
'change' based on the type of activity, whether that change involves delivery
of maintenance, or similar criteria. It is one which includes only changes
which have an impact on an operator in a way which goes beyond the usual
fluctuations in capacity, availability or condition inherent in the usual
operation of the network. THE
OFFICE OF RAIL REGULATION'S DETERMINATION OF THE APPEAL BY NETWORK RAIL
INFRASTRUCTURE LIMITED
("NR") PURSUANT TO PART M OF THE NETWORK CODE ("THE
CODE") AGAINST DETERMINATION ADP40 OF THE ACCESS DISPUTES
PANEL OF THE ACCESS DISPUTES COMMITTEE IN RESPECT OF A JOINT REFERENCE BY NR AND FIRST SCOT RAIL
LIMITED ("FSR")
AND THE APPEAL BY FSR PURSUANT TO PART M OF THE NETWORK CODE AGAINST DETERMINATION TTP317 OF
THE TIMETABLlNG PANEL OF THE ACCESS DISPUTES COMMITTEE. |
|
|
DEFINITIONS “Network Change” (b)(ii) “has lasted or is likely to last more
than six months” |
NV53 |
December 2003 |
The
Train Operator sought to represent to the Network & Vehicle Change
Committee that occasional, but severe, disruption to services to permit the
implementation of a changed method of painting for the maintenance of the
Forth Bridge, constituted a Network Change.
The Committee took the view that the nature and duration of the
interruptions were such that they were not likely, in the generality, “materially
to affect the operation of the Network, or of trains operated by that
operator on the Network”. In
other words the arrangements did not fulfil the criteria in definition
(i). By the same token, such
intermittent and occasional interruptions could not reasonably be deemed to
have the continuity of material impact that might fulfil the condition (“lasted
for more than six months”) to
qualify under definition (iii).
{NV53} |
|
DEFINITIONS “Network Change” (b)(ii) “has lasted or is likely to last more
than six months” |
NV53 |
December 2003 |
NV53 addressed the question of whether or not works necessary to change from one maintenance regime to another (in this case in respect of the method of painting the Forth Bridge) should qualify as a Network Change: 7. “In considering whether or not the revised
Forth Bridge repainting should be categorised as Network Change, the
Committee adopted the following rationale: 7.1. The change is essentially the introduction of a new technique that Network Rail is to employ to assure the long-term availability of the Forth Bridge for “trains operated by that operator on the Network”. 7.2. Whilst the essence of what is under
consideration can broadly be described as “painting” the change of technique
does require some changes to possessions, as compared with past general
practice. However, those changes to
possessions relate only to the period of implementation of the
technique: once the three coat epoxy
resin paint has been applied and established, its subsequent maintenance
(namely over-painting of topcoat) should be, broadly, only as disruptive as
previous painting. 7.3. Other than during brief parts of the period of transition, the functionality of the Forth Bridge, the hours that it will normally be open during the week, and the number, or weight, of trains that can be passed, will be neither reduced nor enhanced to any perceptible degree that might be categorised as “likely materially to affect the operation of the Network, or of trains operated by that operator on the Network” (Part G Definition (i)). 7.4. Although, during the implementation of the new system of painting, there is a requirement, both past, and in the remainder of the seven-year contract, to take extended possessions, these are intermittent, and liable to careful scheduling and planning. It would not be appropriate to seek to classify such occasional interruptions as “a change… which has lasted for more than six months…and which is likely materially to affect the operation of trains by that operator on the Network” (Part G Definition (iii)) because there is no continuity of material impact. (Indeed for the great majority of any possible six-month period, there will be no impact on train operation at all). 8. On the basis of the findings of fact, and
the rationale set out above, the Committee determined that it would be
unreasonable to classify the revised Forth Bridge repainting as a Network
Change, whether in the terms of Part G Definition (i), or Definition (iii).”
{NV53} |
|
DEFINITIONS “Network Change” (b)(ii)(z) “a change to the method of delivery of any operational documentation
(other than Railway Group Standards) owned or used by Network Rail or a Train
Operator” |
NV4 |
October 1997 |
To Note:
previous definition related to “the format of any operational documentation”.
Three early determinations focussed on this aspect of the
definition. One {NV4} remains
pertinent to the revised definition: “The Committee, in considering whether an operating instruction might be a Network Change, concluded that a change to the substance (as opposed to the format) of an operating instruction cannot in itself constitute a Network Change. {nv4} |
Network Code Section |
Determination |
Date of Hearing |
Points made within Determination
(Verbatim extracts given in Italics)
|
|
G1.2(f) Content of notice of proposed Network Change |
ADA16 |
September 2013 |
“The obligation of NR is to explain, but
not justify, the proposed Network Change.
In …. order to explain the effect of Network Change, there must be an
analysis …. It is fundamental in that
analysis that future committed and funded projects must be taken into account
if the full effect of that change is to be understood, accepting that there
must be due regard to the level of knowledge of those likely to be affected
by that change.” ADA16,
para. 5.32 |
|
G1.9 Changes
to the operation of the Network |
NV4 |
October 1997 |
The
Committee has commented that the force of Conditions [G1.9] and [G1.10] is
that they give Network Rail specific opportunities, in defined circumstances,
to avoid (G1.8), or to delay (G1.9) invoking Condition G1.1. In each case this freedom, intended to
relieve NRI of unnecessary bureaucracy, is subject to constraints to
discourage abuse. {NV4} The Committee asserted that recourse to [G1.9] or [G1.10] was to be considered as a concession only justified where strict application of G1.1 would imply undue delay, or would be inappropriate to a genuinely temporary change. {NV1} |
|
G1.9 Changes
to the operation of the Network |
ADP40 ORR
Determination |
October 2009 May 2010 |
“ 71.
ORR
would emphasise that NR's obligation, as set out in Condition G1.1, which is stated to
be subject to Conditions G1.9 and G1.10, is to give notice of its proposal for change if
it wishes to make a Network Change. Condition G1.9 makes that general
obligation of prospective notification conditional in the circumstances set
out in the condition where the Change falls within paragraph (b) of the
definition of Network Change. However, the present case does not concern
prospective notification. Further, as set out in paragraph 69, ORR understands NR to
accept that if a finding is made that the change to the pattern of
possessions in question amounts to a 'Network Change', the Part G process
must apply.” THE OFFICE OF RAIL REGULATION'S DETERMINATION
OF THE APPEAL BY NETWORK RAIL INFRASTRUCTURE LIMITED
("NR") PURSUANT TO PART M OF THE NETWORK CODE ("THE
CODE") AGAINST DETERMINATION ADP40 OF THE
ACCESS DISPUTES PANEL OF THE ACCESS DISPUTES COMMITTEE
IN RESPECT OF A JOINT REFERENCE BY NR AND
FIRST SCOT RAIL LIMITED ("FSR") AND THE APPEAL
BY FSR PURSUANT TO PART M OF THE NETWORK
CODE AGAINST DETERMINATION TTP317 OF THE TIMETABLlNG
PANEL OF THE ACCESS DISPUTES
COMMITTEE. |
|
G1.10 Network
Change for safety reasons |
NV33 |
November 2001 |
“24.3
In relation to Track Access Condition G1.10]: actions taken by Railtrack …for reasons
of safety qualify as Network Change only if they qualify in respect of their
fulfilment of "Network Change", in terms of Condition G definition
(i)(a) or (b): the force of Track
Access Condition G1.9 does not change these definitions” {NV33} “
…. Condition [G1.10] 23.1.1 does
not modify or expand the scope of the Condition G definitions: any action taken on safety grounds will be
a Network Change if it fulfils the tests within "Network Change",
in terms of Condition G definition (i)(a) or (b), but will not be a Network
Change if it does not; 23.1.2 does
not modify or reduce Railtrack’s obligation ultimately to carry out the
consultative, and, where relevant, the compensation, provisions of Track
Access Conditions G1 and G2, in relation to any change for safety reasons
that fulfils the definition of Network Change; 23.1.3
does not change the date from which any
assessed compensation is payable, which is the date from which the action
deemed to be a Network Change was first taken.” {NV33} NOTE.
Some aspects of determination NV33 were appealed to the Regulator, who
handed down his judgment in June 2004.
As regards the provisions of NV33 reproduced here, these were not
affected by the Regulator’s findings. However, the Regulator laid down that
(6) “Compensation in respect of a Network Change [Network Change definition (b)] is
payable, where the change to the operation of the network has lasted for more
than six months, for the full period following implementation of the change”.
This aspect of the Regulator’s judgment overturned the previous
determination NV1, repeated in NV33, which had taken a different view. |
Network Code Section |
Determination |
Date of Hearing |
Points made within Determination
(Verbatim extracts given in Italics)
|
|
G2.1 |
ADA16 |
September 2013 |
“A plain reading of
Condition G2.1 does not assist in understanding the time frame that has to be
addressed in considering whether the proposed change would result in material
deterioration in the performance of that Beneficiary's trains. It may not be a matter of any significance
because G2.1.1(a)(iv) clearly requires an examination by the Access Beneficiary
of the future use of the relevant part of the Network; such use does not
necessarily have to be use by that Access Beneficiary itself. ADA16, para. 5.37 |
|
G2.1 |
ADA17 |
October 2013 |
“….
questioning the “motivation” of NR was not an admissible ground of objection
to a properly constituted Network Change proposal.”
ADA17, para. 6.2 |
|
G2.1.1(a)(ii) |
AD1, NV55 |
December 1995 Feb 2004 |
Committees
(Access Dispute Resolution Committee & NVC) have had to consider a number
of cases where one party contends that an issue ought to be handled under
Track Access Condition G Network Change, and the other maintains that it does
not merit this. “The Committee …considered that Part G of the [Network Code] provides for either party Train Operator or [Network Rail] to bring a matter into the jurisdiction of Part G of the [Network Code]. [Network Code] had obligations in relation to the discharge of Condition G1. The Committee was of the view that the force of Condition G2 and [G2.1.1](a)(ii) and (iii) in particular, is that, if a Train Operator considered that it was faced with a change, it could cause that implementation of that change be made subject to the provisions of Part G of the [Network Code]. In other words
the Committee was of the view that it was the operation of Part G of the
[Network Code], including where necessary reference under Condition [G10] to
the [relevant ADRR Panel], that would determine the materiality of the
change”. {AD1}
recited in {NV55} |
|
G2.1.1(a)(ii)
and (iii) |
NV58 Appeal hearing by ORR |
April 2004 January 2005 |
Where a Train
Operator wishes to contest a Network Change, there needs to be adequate cause
and supporting reasoning for such a contest, all submitted in accordance with
due process. Thus 6.3. Condition G2.1 prescribes that “the
Train Operator shall give notice to [Network Rail]” in a number of specifically defined
instances. This is the mechanism by
which the Train Operator is enabled to protect its own interest, provided it
is done in a way that complies with the Condition, both as to content, and
timeliness. 6.4. In this case, the terms in which the
objections or statements, as prescribed in Condition G2.1 (a) or (b), had
been expressed by the Train Operators were largely general, and did not
“contain such detail as is reasonable to enable [Network Rail] to assess the
merits of the Train Operator’s decision”.
In particular, 6.4.1.
no instances
were advanced as evidence that “the implementation of the proposed
change would necessarily result in [Network Rail] breaching an access
contract to which that Train Operator is a party” (Access Condition
G2.1(a)(i)); 6.4.2.
no instances
were advanced as evidence that “[Network Rail] has failed....to
provide sufficient particulars to that Train Operator…” (Access Condition
G2.1(a)(ii)); 6.4.3.
no instances
were advanced as evidence that “the implementation of the proposed
change would result in a material deterioration in the performance of that
Train Operator’s trains which cannot adequately be compensated under this
Condition G2 (Condition G2.1(a)(iii));
and 6.4.4.
no notice
had been given in compliance with Condition G2.1(b) that any Train Operator
“should be entitled to compensation from [Network Rail] for the consequences
of the implementation of the change”.
{NV58} In this instance,
which related to a proposal from Network Rail to close permanently the Goods
loop at Ruscombe, the Committee gave fullest possible consideration to the
substance of the arguments that were put before it, but concluded as follows: 9. Taking all considerations into account,
the Committee decided that, within the terms of the Track Access Conditions,
no adequate demonstration had been made that any Train Operator had, or
would, suffer detriment to a degree that gave the Committee grounds for
ruling against Network Rail. In
reaching that decision, the Committee sought to balance the following
factors: 9.1. There must always be great care taken in
any decision that results in the reduction of Network capability, in
particular in respect of facilities that can help to minimise the impact upon
service perturbations. As a general
rule facilities that are closed are unlikely to be easily re-instated. In the context of continuing performance
problems on the GWML, Network Rail should be particularly mindful of the need
to make a soundly based decision on such a matter. 9.2. Whatever the merits of the particular
case, Network Rail was to be commended on the fact that it was seeking to
apply a structured approach to ensuring that S&C renewal funds were
deployed to best effect. The Network
Change procedure is the prescribed means to ensure that the decisions
consequent upon such an approach can be properly assessed, and, where
appropriate, challenged and qualified. 9.3. In respect of some elements of the freight
operating constraints, namely the Rules of the Route/ Rules of the Plan,
there is ample precedent, in the determinations of both this Committee, and
of Timetabling Committee, that changes can be opposed, and overturned, but
only on the basis that changes would infringe specific access rights. There is no precedent for challenging
change in the generality. 9.4. It would be illogical to treat other
aspects of the freight operating constraints differently. At any time they are the product of past
history and duly applied change procedures (Condition D or Condition G as
appropriate), and any objection to change should logically require to be
justified on the basis of identified specific impact on contractual
rights. It cannot be right to
challenge a Network Change solely on the grounds that it would result in change
to the Network. 9.5. Where no rights, or reasonably prospective
rights, are infringed, it would be wrong to curb Network Rail’s freedom to
exercise its discretion as to the detailed management of the Network, given
that it is Network Rail that is the accountable body for both the efficiency
and the safety of that Network. 10. The Committee therefore determined that 10.1.if Network Rail has satisfied itself that
the closure of the Ruscombe Up Goods Loop is the best use of its resources,
and that it is prepared to sustain any consequent performance risks, then it
may proceed with the Network Change;”
{NV58} This
determination was subsequently made the subject of an appeal to the Office of
Rail Regulation. The appeal was
rejected in a judgement of 28th January 2005, and the
determination of the Committee upheld. “17. EWS’ view
was that EWS (and other freight operators) had a permission to use the whole
Network Rail network, contained in Clause 5 of their track access
contracts. EWS considers that it
could therefore prevent a Network Change by arguing under Condition
G2.1(a)(i) that the implementation of the Network Change “would necessarily
result in Network Rail breaching an access contract to which that Train
Operator is a party”. EWS’s view was
that such a right would however only be applicable in those
circumstances ”where Network Rail
proposes to amend the freight operating constraints in such a way that a
freight operator believes that the Network Change will adversely affect the
prospects of allowing its business to grow and evolve over time”. EWS said that, when it entered into its
existing track access agreement, it did so “in expectation that the entirety
of the contract would enable the business to grow and evolve in response to
the changing nature of its customers requirements”. IN this particular case, EWS believed that the removal of the
loop would indeed have an adverse effect on its ability to grow and evolve
its business. 18.
EWS argued that the NVCC was wrong to conclude that “any objection to
change should logically require to be justified only on the basis of
identified specific impact on contractual rights rather than in the
generality of rights”…… ORR’s assessment 20. Under Clause 5.1 of EWS’ track access
agreement, Network Rail grants EWS permission to use its network in
accordance with the terms of the agreement.
However, Clause 5.2 states that the permission to use the network
shall, except where the context otherwise requires, be construed to mean
permission, among other things, “to use the track comprised in the Network in
accordance with the Network Code for the provision of the Services in
accordance with their Service Characterisitcs and for any Alternative Train
Slots, using the Registered Equipment in accordance with the Freight
Operating Constraints. … Clause 5.2 explicitly provides that the
permission to use is subject “in each case and in all respects to the network
code and the Freight Operating Constraints”. 21. ORR does not consider that EWS has
demonstrated before the NVCC or in this appeal that the implementation of the
proposed Network Change will necessarily result in a breach of its track
access agreement. The expectations
which EWS may have had when it entered into the contract….do not constitute
contractual terms. … , ORR does not accept EWS’s
interpretation of the permission to use clause and considers that it would
lead to a perverse outcome because it would enable EWS and other freight
operators) to prevent any Network Change taking place anywhere on the
Network, irrespective of whether the operator had any specific rights on the
route where a Network Change was being proposed. 22. The assessment above is consistent with
the NVCC’s conclusion that “. It
cannot be right to challenge a Network Change solely on the grounds that it
would result in change to the Network” (paragraph 9.4 of its
determination). ORR therefore
rejects this element of EWS’ appeal.” OFFICE OF RAIL
REGULATION DETERMINATION OF AN APPEAL BY ENGLISH WELSH & SCOTTISH RAILWAY
AGAINST A DETERMINATION OF THE NETWORK AND VEHICLE CHANGE COMMITTEE REGARDING
THE PROPOSED REMOVAL OF RUSCOMBE LOOP (ref NV58), paragraphs 17 to 22) |
|
G2.1.1(a)(iii) |
ADA17 |
October 2013 |
“Limb (iii) requires
that “the implementation of the proposed change would result in a material
deterioration in the performance of that [i.e. the objecting] Access
Beneficiary’s trains which cannot adequately be compensated under this
Condition G2”. My analysis of this wording is that it calls for
interpretation as to whether the reference is to the performance of current,
historic or future trains. My
conclusion is that it must refer to current trains, in the broad sense
of the trains in the WTT current at the time of the dispute (including the
immediately preceding subsidiary WTT) or the offered and agreed next WTT. This is for two reasons. In the first place a “deterioration” in
anything is inherently a relative concept which can sensibly be discerned
only by reference to some currently existing or clearly ascertained benchmark
from which to assess a change for the worse.
Secondly, it was clearly the intent of the framers of the most recent
version of Network Code Part G that the effect of a Network Change on
possible future trains should be dealt with in any case by Limb (iv),
which was newly introduced into Part G expressly for that purpose …. …. I am
mindful that the …. determination of dispute ADA16 approached this same issue
on the equivocal supposition that Limb (iii) might possibly be applicable
equally to current or future trains, but that in any event the analysis and
findings as regards future trains would be identical under both limbs. That being so, I am content to conclude
that Limb (iii) applies only to current trains and that it would be otiose
here to consider expectations of future use at all under Limb (iii).”
ADA17, paras. 6.18 - 6.20 |
|
G2.1.1(a)(iii) |
ADA17 |
October 2013 |
“NR
referred …. to the determination in Dispute NV58, particularly paragraph 9.5
stating that “it would be wrong to curb Network Rail’s freedom to exercise
its discretion as to the detailed management of the Network, given that it is
Network Rail that is the accountable body for both the efficiency and safety
of that network”. I must make it
clear that I do not accept this determination, which is only of persuasive
authority as regards an ADA, …. in advocating the attribution of any general
discretion to NR to act as it sees fit in its general management of the
Network because it has accountability for efficiency and safety. In my view Network Rail is accountable to
its contracting partners, or customers, first and foremost to observe and
perform to the letter its contractual commitments to them. These commitments include compliance with
all provisions of the Network Code equally, and the Network Code includes
provisions calculated sufficiently to promote efficiency and safety in
balance with other considerations. I therefore
reject any suggestion that NR has some kind of residual "freedom to
exercise its discretion" in managing the network, whether based on
efficiency, safety or any other general principle, such as to override or
qualify the detail of its contractual obligations, even in what NR in its
sole judgement perceives to be the more general interests of the
industry. ….I take the same view as
regards …. citation of Dispute ADP13, which in turn relied on NV58.” ADA17, paras. 6.22 & 6.23 |
|
G2.1.1(a)(iv) |
NV22 NV57 |
January 2002 March 2004 |
This case
anticipates the provision, now included in the Network Code, for a Train
Operator, (or Network Rail in G4.1 (a)(iv)) to contest a Network Change on
the grounds that “the proposed change does not adequately take account of
the reasonable expectations of the Train Operator as to the future use of the
relevant part of the Network.”. {NV22} This case (which
was introduced originally under [G10]) addresses questions of an operational
Network Change that is tolerable in the short term, but has longer-term
implications. The determination
therefore upholds the view of the claimant that the Network Change (involving
the curtailment of the operational length of Stowmarket loop) is not an
acceptable final outcome. {NV57} |
|
G2.1.1(a)(iv) |
ADA16 |
September 2013 |
“NR suggested …. that the
Committee in NV58 had carefully considered …. future use …. as was evidenced
by the words "any Train Operator had, or would (my underlining)
suffer detriment". I approach
that submission with some caution.
The Network Code was amended on 12 January 2007 some two years after
the Determination of NV58 by the inclusion of G2.1.1(a)(iv). In my view there is now a clear
requirement which requires me to take into account the reasonable
expectations of the Access Beneficiary as to the future use of the relevant
part of the Network.” ADA16, paras. 5.7 & 5.8 |
|
G2.1.1(a)(iv) |
ADA16 |
September 2013 |
“The reasonable
expectations of the Access Beneficiary must include as a priority the running
of an efficient service. I am
satisfied that in seeking to run an efficient service the Access Beneficiary
is entitled to have regard to the Network capacity available to it and others
to recover from service disruption caused by a faulty train.” ADA16, para. 5.50 |
|
G2.1.1(a)(iv) |
ADA17 |
October 2013 |
“Condition G2.1.1(a)(iv) refers to
the reasonable expectations of “the Access Beneficiary” as to “the
future use of the relevant part of the Network” (my emphasis). This was clearly intended to mean
expectations as to more than just that Access Beneficiary’s own trains. However, …. in order for the
“expectations” of any one operator to be considered “reasonable” in this
context, my view is that the future use expected, if it would or could be by
someone else, must at least be somehow relevant to that operator and
not just a matter concerning the world at large - and therefore that some
connection at least would have to be demonstrated between any general
forecast of future use and the individual operator’s intended business or operations. If it were otherwise, an individual
operator could not itself reasonably hold any expectations at all of its own
deriving from a general forecast. The consequence in my view
is that any one operator cannot make an individual case based only on an
assumed general anticipated use of the relevant part of the Network, unless
it has a genuine concrete expectation of itself needing to use it for the
particular traffic as forecast. I
recognise that freight operators will always find it difficult to establish
individually with any certainty a specific anticipated contract pattern,
since to a large extent they will be in competition with each other for
available traffic. In that context I
do not consider it necessary for the operator to show an actual present
contract in order to demonstrate the future expectation, but in relying on
industry wide forecasts it would at least need to show a genuine intention
and capability of being active in that particular kind of business.” ADA17, paras. 6.26 &
6.27 |
|
G2.1.1(a)(iv) |
ADA17 |
October 2013 |
“I took “the relevant part of the
Network” to mean not only the precise location or network assets directly
physically affected by the proposed Network Change, but the routes and
network assets on which there would clearly be a knock-on direct effect on
the operation of trains resulting from the proposed Network Change, as a
matter of necessary causation.”
ADA17, para. 6.28 |
|
G2.1.1(a)(iv) |
ADA17 |
October 2013 |
“In trying to assess what might be
considered appropriate in order to “adequately take account” of reasonable
expectations I accept NR’s contention, based partly on precedent and partly
on practicality, that a full Timetabling simulation should not be
required. However I consider that
merely dismissing expectations of use of a particular facility as being an
unsupported “nice to have”, but on the basis of high level studies only with
no or minimal detailed backup modelling or analysis, goes too far in the
opposite direction. My view is that
there is a middle ground; operators participating in this process are
entitled to have taken into account by NR what is reasonably likely to be
necessary to meet their genuine and demonstrably achievable aspirations,
because that is what constitutes their reasonable expectations. Just as it is unreasonable to expect NR to
undertake a detailed Timetable study as part of the Network Change process,
it is also unreasonable to expect operators to have to go to the lengths of
proving beyond doubt that everything they seek to be taken account of in
assessing a Network Change is 100% guaranteed to be absolutely critical and
essential to their future plans.” ADA17, para. 6.32 |
Network Code Section |
Determination |
Date of Hearing |
Points made within Determination
(Verbatim extracts given in Italics)
|
|
Condition
G2.1.2 and G2.2, (also relevant to G1.5 and 1.6) |
NV44 |
September 2002 |
Track Access Condition G1.2 previously required
that “Any Train Operator so consulted shall, as
soon as and so far as reasonably practicable, provide to [Network Rail] an
estimate of those costs, losses and expenses… which may be incurred by the
Train Operator as a result of the implementation of the proposed Network
Change”; This requirement
has been amplified in Part G, and is further qualified at [G2.1.2] which
stipulates that ”Any such statement [about compensation claimed] shall
contain such detail as is reasonable to enable [Network Rail] to assess the
merits of the Train Operator’s decision”.
If, for any reason, the Train Operator does not furnish an
estimate in accordance with [G2.1.1], which meets the criteria in [G2.1.2],
then this is potentially a matter that can be referred for determination to
the Network & Vehicle Change Committee.
If, in the absence of such reference, the parties proceed with the
Network Change, and are subsequently unable either to agree sums of
compensation due, the Committee’s discretions in respect of any determination
will be much informed by the quantity, quality, and timeliness of any
information that may be generated to support the respective cases, and the
extent of its compliance with the provisions of [G2.1]. {NV44} |
|
Condition
G2.2: processes and “reasonable” |
ADP08 |
August 2005 |
“ 20.
In this
last respect, the Panel considered that a determination of what is “reasonable”
had to take account of both the relevance of the proposal to the
circumstances, and the manner in which the proposal has been made. The Panel noted that whilst Condition
G2.2 gives an apparent scale to the level of compensation payable (“an
amount equal to the amount of the costs, direct losses and expenses
(including loss of revenue) which can reasonably be expected to be incurred
by the Train Operator as a consequence of the implementation of the proposed
change”) this is by way of qualification of “the compensation referred
to in Condition G2.1”. 21.
Condition
G2.1 places on a Train Operator the obligation to give notice to Network Rail
if it considers that “(b) it should be entitled to compensation from
Network Rail for the consequences of the implementation of the Change”; and, “Any notice of the kind mentioned
in paragraph (b) above shall include a statement of the amount of
compensation required and the means by which the compensation should be paid,
including any security or other assurances of payment which Network Rail
should provide. Any such statement
shall contain such detail as is reasonable to enable Network Rail to assess
the merits of the Train Operator's decision”. 22.
In other
words, whilst the Train Operator is the party both in a position to, and
entitled to, make an assessment of what may be required by way of Bus Replacement
services, the question of whether or not the costs of those Bus Replacement
services are met by Network Rail depends on the (not unreasonable) “
statement….to enable Network Rail to assess the merits of the Train
Operator’s decision”. 23.
Condition
G2.4 lays down particular time limits where, if the Train Operator has
presented a statement, Network Rail is obliged to pay the stated level of
compensation, or take the matter for resolution by an Access Dispute Panel;
failure in this respect would have the consequence that “ the proposed
Network Change shall not be implemented”. 24.
The
practical impact of these provisions is that the parties are required to
carry out full and prompt consultations, leading to agreement, before there
can be a definitive outcome with respect to the payment of consultation,
and/or the implementation of a scheme. 25.
Consultations,
as required by the terms of the Track Access Agreement and the Network Code
may be facilitated by the existence of informal liaison structures. However, such informal arrangements
cannot be adopted as a substitute for due compliance with contractual terms,
in this case Conditions G2.1, G2.2 and G2.4.” {ADP08} |
|
Condition
2.2 Amount of compensation |
ADA29 |
Feb 2016 |
“One of the rights
which passed to [the TOC] pursuant to the Transfer Scheme was a right to make
and pursue a claim for compensation under Network Code Condition G2.2 arising
from the consequences of Network Change Notices …” ADA29 |
|
Condition
G2.3 Benefits to be taken into
account |
NV44 |
September 2002 |
The Committee
was asked to interpret the force of the two factors explicitly to be taken
into account in the calculation of compensation payable to a Train Operator
under G1.2 and G2.1, namely “ (a) the benefit (if any) to be
obtained or likely in the future to be obtained by the Train Operator as a
result of the proposed Network Change;
and (b) the ability or likely future ability of the
Train Operator to recoup any costs, losses and expenses from third parties
including passengers and customers”
In a case where
the Train Operator had agreed to comply with G1.2 in respect of costs, but
had declined to produce either an estimate, or a methodology for the current
assessment of revenue losses, the Committee was clear that the assessment of
benefit to a Train Operator should not be calculated as a NET benefit. In particular, benefits should not be
discounted because an improvement to the Network also benefits a second Train
Operator who might be minded to run competitive services, and capture revenue,
or because running of accelerated or more frequent services, may incur
additional costs. “the decision
whether or not to run such a service is, with the increased capacity now on
offer, a matter for GNER to decide taking account of its own commercial
interests.” {NV44} |
Network Code Section |
Determination |
Date of Hearing |
Points made within Determination
(Verbatim extracts given in Italics)
|
|
G9 “Obligations
following imposition of changes” |
NV15 & 16 |
October 2000 |
The
Network and Vehicle Change Committee considered the extent to which
imposition of a speed restriction constituted a Network Change, and the
compensation that should in such circumstances be payable, in a circumstance
where an element of the change (which was also associated with changes in
Sectional Running Times) resulted from an intervention by the HSE in its role
of “Competent Authority”. The
Committee was at pains to differentiate between the proper discharge of
safety responsibilities (including at the direction of a “Competent
Authority”), and the scope for seeking commercial advantage in the name of
safety management. It was not
appropriate to seek to avoid payment of any compensation, by invoking [G9](c),
when much of the change did not fall into this category. {NV15 and 16} |
Network Code Section |
Determination |
Date of Hearing |
Points made within Determination
(Verbatim extracts given in Italics)
|
|
G10 “establishment” |
ADA17 |
October 2013 |
“Network Rail
referred …. to the need for its Network Change proposal to be “established”
as well as implemented. Network Code
Part G refers to this concept only once, in the heading to Condition G10 -
“Establishment and Implementation”, which by itself does not tell us what the
word is intended to mean. If
“establishment’” has any meaning distinct from implementation, it appears to
be used in practice to mean the process of finally authorising or entitling
the implementation of a proposed Network Change, and this is how I interpret
it.” ADA17, para. 6.24 |
|
G10 “implementation” |
ADA17 |
October 2013 |
“I …
reject …. contentions that there could be no concept of partial
implementation of a Network Change or that an exercise described repeatedly
as mere “stageworks” (a procedure not known to the Network Code ….) could not
amount to such implementation. In any
event it matters not whether the works involved amounted to a partial or
total implementation. It cannot be
necessary for an entire Network Change proposal to be the subject of
operators’ objections in order for only some part of it to be modified,
withdrawn or disputed; therefore it cannot be necessary for the totality of
works required by the proposal to be completed before this can amount to
implementation. Accordingly I find as a fact that the .… Network Change
has been implemented by NR by virtue of the “plain lining” works carried out
…. notwithstanding their appellation by NR as “stageworks”. I also find as a matter of contract
interpretation that such implementation constituted a breach of Condition
G10.3.1.” ADA17, paras. 6.12
& 6.13 |
Network Code Section |
Determination |
Date of Hearing |
Points made within Determination
(Verbatim extracts given in Italics)
|
|
G11.1 Right of appeal |
AD1, NV55 |
December 1995 February 2004 |
The
Appeal process … is for use in the
event of a dispute or in the event of failure by a party to invoke the
processes in a proper or timely manner.
Parties should not be afraid to invoke Condition [G11]. Nor should they delay unduly before they
invoke it, because the Committee will not hasten to reach a decision or come
to a hurried injunctive decision where time is running out and the parties
have clearly prevaricated for a period of months before making a reference to
the NVC. {AD1}. The ADRC has taken the view that, if a
party considers that a change is sufficiently material to warrant tabling by
the other party under either Condition G1 or G3, then it has the opportunity
under Conditions G2.1(a) or G4.1(a) respectively to cause the processes in
Part G of the Access Conditions to be invoked and brought into play. {AD1} The findings of AD1 were restated in NV55
in relation to an assertion by Network Rail that an extension of the duration
of “2 Track Railway timetable” on the GWML was a matter solely for Rules of
the Route/ Rules of the Plan. “Part
G of the Access Conditions provides for either party, Train Operator or
Railtrack, to bring the matter into the jurisdiction of Part G of the Access
Conditions. Railtrack had
obligations in relation to the discharge of Condition G1. The Committee was of the view that the
force of Condition G2, and G2.1a(ii) and (iii) in particular, is that, if a
Train Operator considered that it was faced with a change, it could cause
that implementation of that change be made subject to the provisions of Part
G of the Access Conditions. In other words the Committee was of the
view that it was the operation of the Access Conditions, including where
necessary a reference under Condition [G11] to [appeal], that would determine
the materiality of the change. It
was not open to any party to keep a proposal for change outside the formal
processes of Part G unless all parties agreed.” (Determination
AD1 4th December 1995). |
|
G10.1(b) Amounts of compensation |
NV33 NV53 |
November 2001 February 2004 |
In making a direction to Network Rail to
bring forward a Network Change proposal the Committee “stressed that it is
only a direction to the parties as to the procedure (Access Condition Part G)
with which they must conform. Any
other considerations, such as the actual scale of material hurt, or benefit,
to any Access Party, would only come within the jurisdiction of this
Committee if, the laid down procedure having been complied with, the parties
are unable to agree, and a further reference is made in accordance with Track
Access Condition [G11]”. {NV53} Adoption of the Part G process allows the
issues of materiality to be quantified and reviewed. It is designed as a
helpful process for notification of change and as a mechanism for
compensation to be claimed where appropriate. “5.1
[the Committee] encouraged parties
to treat the provisions of Track Access Condition G as a facilitational process. That said, the invoking of the procedure
by either party does not immediately imply that a mooted change IS a Network
Change. Similarly, should it be
determined (either by the parties, or by reference to this Committee) that
the change in question does fulfil a definition of Network Change, there must
be a presumption that, even so, the scale of compensation that one party may
be required to pay to another is also subject to tests of materiality and
reasonableness” {NV33} NOTE. Some aspects of determination NV33 were
appealed to the Regulator, who handed down his judgment in June 2004. As regards the deliberations of NV33
reproduced here, these were not affected by the Regulator’s findings. In other words
invoking the procedure is not to judge the issue. It is open to the parties (or the Committee) to conclude that
the matter in question is NOT a Network Change; or that, if it is a Network
Change, it is one that does not attract any compensation. |