Please make your selection below - click a section heading to expand. Where a heading does not have a “+” symbol next to it, that section/provision has not been the subject of consideration by a Dispute Panel and that therefore there is no documented case law to consult. Please note that all previous cases relate to the Railtrack ISACs.

Part 1: Organisation of the Access Conditions and Definitions

Part 2: Modifications

Part 3: Changes

Part 4: Works, repairs and maintenance

Part 5: Insurance

Part 6: Access Charging

Rule, Clause or Condition Determination Date of Hearing Points Made Within Determination
34. Certificate of Residual Variable Charge and Fixed Costs AD14 January 1998

The Committee therefore considered whether the staff costs for 1995/6 fell to be apportioned between Qualifying Expenditure and non Qualifying Expenditure. The Committee’s view was that there was a requirement in ISAC(96) 98.1 for such an apportionment of costs to be undertaken.

Furthermore the Committee opined that the fact that this Condition 98.1 related to costs and not charges, and that ISAC(96) 35 made provision for adjustments for excess or short payments, both implied that the critical apportionment was that which had to be undertaken at the conclusion of the financial year and which underpinned the content of the Certificates supplied in accordance with ISAC(96) 34.1.

(AD14, paras 4, 5)

38. Inspection of books, records and accounts ADP35, ADP36, ADP38 September 2009

The provisions of RISAC, which have remained largely unaltered since initial publication in 1996, prescribe the processes that Network Rail and the relevant POs should follow to promote and/or protect their respective rights and commercial interests. As such:

they are processes that are effective only in proportion to the diligence with which each party fulfils its own obligations, and verifies that the other has duly done the same;

they are processes requiring annual re-cycling, perhaps in recognition that some initial headline allocations of costs between parties owed more to expediency than to sound accounting and arithmetic, and were thus only estimated approximations;

they reasonably contemplate that the level of understanding of station activity, and the accuracy of accounting for that activity would evolve to meet the progressively more sophisticated needs of the privatised railway;

whilst they do not preclude “broad brush” agreement at the headline level in relation to the preparation of a “best estimate” of Total Variable Charge, there is no implied provision for such a broad brush approach to specifications of functions, or accounting for actual expenditure, or for such an approach to pre-empt any findings as a result of Inspections;

they do not lay down any benchmarks in respect of the proportions of any head of expenditure that should be allocated to either Qualifying Expenditure or non-QX;

they do provide mechanisms by which, where parties are not agreed upon the specifics in relation to apportionment between QX and non-QX, they may have recourse to appropriate dispute resolution.

The decisions by the First Group TOCs and the Govia TOCs each to invoke the right to inspection accorded by RISAC 38.1 appear to have revealed that the provisions of RISAC have not been observed in detail in significant areas. In particular:

where there have been custom and practice allocations between QX and non-QX, no documentation justifying those allocations has been preserved by Network Rail; nor was any evidence brought forward, by any party, as to previous attempts to test their appropriateness;

the accounting practices used have not been immune from error, and would appear to have allowed scope for substantial misallocations of expenditure (the Panel was advised of discrepancies thus far totalling £170,000).

(ADP35, ADP36, ADP38, paras 17, 18)

Part 6B: Access charging, fixed charges for Control Period (applies from 2013 ISACs only)

Part 7: Existing Agreements and Third Party Rights

Part 8: Litigation and disputes

Rule, Clause or Condition Determination Date of Hearing Points Made Within Determination

(ADP35, ADP36, ADP38, paras 17, 18)

Part 9: Station Register

Part 10: Rights granted over adjacent property

Part 11: SFO’s property rights

Part 12: Performance monitoring regime and remedies

Part 13: Environmental Protection

Part 14: Other positive obligations

Part 15: Other negative obligations

Part 16: Attribution of costs

Part 17: General

Annexes: Annexes

Rule, Clause or Condition Determination Date of Hearing Points Made Within Determination
Annex 2.1 Expenses of Common Station Services and Common Station Amenities (QX) AD28 September 2003

The Committee then addressed the operative definitions in paragraph 1.1 of Annex 2: Qualifying Expenditure of the ISAC. It noted that the accommodation in question was that needed to provide offices for those Area Support Staff who provided the means by which NRI was able to fulfil certain of its obligations that applied in common to a number of stations. The salient test was whether the provision of such accommodation “can be properly attributed to the operation of the Station as a railway station”.

The Committee therefore determined that, in principle, the accommodation of staff essential “to the operation of the Station as a railway station” was a legitimate head of expenditure that could be proposed for inclusion in QX, whether those staff were located on the Stations in question, or at some remote location.

For the avoidance of doubt, this determination only relates to the matter of principle as to whether the accommodation for a specific category of staff MAY be included in QX. Such determination does not address any question of whether a particular figure, either proposed for the future, or raised in the past, meets the criterion for being “costs and expenses reasonably payable or incurred by the Station Facility Owner”. Any test of reasonableness in relation to QX relates to a consideration of amount, and as such does not fall within the jurisdiction of this Committee.

(AD28 paras 4, 5, 6)