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Condition E1: Environmental Information Requirements

Rule, Clause or Condition Determination Date of Hearing Points Made Within Determination
Definitions ADP18 August 2006

The Panel considered the structure of Part E of the Network Code, given that this was the ground upon which the reference had been brought, and found that the definition of an environmental problem derives from a hierarchy of conditions, and that a failure to fulfil one condition ought logically to frustrate fulfilment of later dependent conditions. Thus

  • it must be evident that the matter at issue is one that adequately fulfils the criteria for “Environmental Damage”; then

  • that the defined Environmental Damage, or prospect of Environmental Damage is such that “in Network Rail’s reasonable opinion [it] could result in Network Rail incurring any material liability or being subject to the Direction of any Competent Authority”; and that

  • “Network Rail’s … opinion” must be demonstrably “reasonable” by reference to both a clear and proper understanding of its legal responsibilities, and to a due assessment of the risks arising from the perceived condition.

(ADP18, para 5)

Condition E2: Remedial Action

Rule, Clause or Condition Determination Date of Hearing Points Made Within Determination
E2.1.2 “Relevant Criteria” ADP18 August 2006

If, taking all matters into account, Network Rail has demonstrated that an Environmental condition exists, then the liability of Train Operator to take action, and/or to meet the costs of addressing that Environmental Condition is dependent upon fulfilment of a further hierarchy of conditions, namely that

  • the Environmental Condition is “a direct or indirect result of the activities of a Train Operator” and that

  • “Network Rail reasonably considers that action is required to prevent, mitigate or remedy that Environmental Condition” and that Network Rail shall have due regard:

  • “(a) to the likelihood that the person in question may be liable (other than pursuant to this Part E) to make any payment or to take or omit to take any action in relation to the Environmental Condition or Direction in question, whether under any Access Agreement to which it is a party or otherwise;

  • (b) in relation to the steps to be taken and the objectives of those steps, to the efficiency and economy with which the steps may be taken, and the effectiveness of those steps, if that person takes those steps, irrespective of the matters referred to in paragraph (a) above; and

  • (c) all other relevant circumstances of the case” [italicised quote from Part E. Condition 2.1.2 “Relevant Criteria”]

(ADP18, para 6)

E2.1.2 “Relevant Criteria” ADP18 August 2006

… taking account of the provisions of Part E of the Network Code, the Panel considered that, in order to resolve the particular circumstances of the case, it had to address two issues of principle, namely:

  • where does the onus of proof lie to establish:

    • that there does exist an Environmental Condition;

    • that it does require to be addressed; and that

    • it is causally “a direct or indirect result of the activities of a Train Operator” and therefore potentially to the charge of the Train Operator to remedy? And,

  • what is the range of “normal behaviour” that either the Train Operator or Network Rail is entitled to expect of the other as part and parcel of the normal discharge of contractual obligations under the Track Access Contract, that do not warrant invoking the provisions of Part E.

(ADP18, para 8)

E2.2.1 “Obligation [*of Train Operator*]” ADP18 August 2006

… in the absence of a demonstrable Environmental Condition (or Direction of a Competent Authority) there are no grounds for Network Rail to make an assessment, nor to promote measures of mitigation; in which circumstances the issue of which party (other than Network Rail) might pay for such mitigation measures does not arise …

(ADP18, para 12.5)

E2.3 Network Rail’s right to take relevant steps ADP18 August 2006

The Panel found that the overall responsibility for the safe operation of the Network was vested with Network Rail, and that therefore it was logically the responsibility of Network Rail to discover risks, threats and Environmental Conditions, and to prescribe, and, if necessary, deliver the appropriate remedies or mitigations. It follows that:

  • the onus of proof as to the existence of an Environmental Condition, and a liability of a Train Operator, rests unequivocally with Network Rail;

  • Network Rail has the protection of Condition E 2.3 to ensure that it cannot be frustrated in carrying out any necessary actions to address an Environmental Condition, but that,

  • a test of the reasonableness of a proposed action is that it is one that Network Rail would consider necessary even where it is not demonstrated that it should be explicitly paid for by a Train Operator.

The Panel considered that in relation to the question of “normal behaviour”:

  • it was likely that any rail vehicle powered by under-floor diesel would, in the course of functioning normally, exude some quantity of oil, but that the Train Operator would have a vested interest in keeping such losses of oil to an absolute minimum;

  • the normal operation of rail vehicles on track is covered under the variable element of the track access charges paid by operators, and as such any action necessary to contain or remove such oil could reasonably be construed as part of Network Rail’s obligation to the Train Operator; by contrast,

  • action (or inaction) by a Train Operator resulting in a serious malfunction of rolling stock, with consequential spillage contamination, would not be normal behaviour, and, in consequence it would be reasonable for the costs of remediation or mitigation of a resultant Environmental Condition to be attributed to a Train Operator in accordance with the provisions of Condition E2.1.3.}

(ADP18, paras 9, 10)