Rail Regulator publishes proposals to improve railway industry dispute resolution and launches RIMAS

03 June 2004
ORR/19/04

The Rail Regulator, Tom Winsor, has today published proposals to improve the railway industry’s arrangements for the resolution of commercial disputes, in two respects:

  • reform of the industry’s Access Dispute Resolution Committee, giving it a new constitution and sounder, more robust rules of procedure to enable it to resolve access disputes – principally between Network Rail and train operators – efficiently, speedily and with greater certainty;  and
  • the establishment of a Railway Industry Mediation and Arbitration Service (RIMAS), made up of experts who can be appointed to deal with railway industry disputes referred to arbitration, mediation or expert determination, and available to all railway industry players, not just parties to access contracts.

The Rail Regulator said:

“As in every other industry, railway industry players and their investors need to be able to have recourse to a sound and competent regime for the resolution of disputes when they arise.  Mediation is a valuable tool and should always be considered, because it can lead to resolution by agreement.  However, if parties cannot agree, arbitration may be necessary.  In both cases, it is essential that the system for the resolution of disputes is sound, competent and efficient and commands industry and investor confidence and respect.

“Over most of the last ten years, the record of the railway industry’s present arrangements for the resolution of disputes has not been satisfactory.  In too many cases, the Access Dispute Resolution Committee – the specialist tribunal set up in 1994 to resolve disputes under access contracts - has misdirected itself as to the applicable law, applied the wrong tests, decided cases on what it believes the parties should have agreed rather than what is in reality in their contract, and sent parties away to renegotiate their contracts instead of determining the questions put before it.  These criticisms have been made in forceful terms in the past, and my communications with industry parties disclose a serious dissatisfaction with the present position.  Today’s document contains proposals for correcting the position with that Committee, providing for the establishment of smaller tribunals with independent chairmanship and greatly improved rules of procedure so as to provide sound, binding determinations in disputed cases.  This is my first proposal.

“My second proposal is a wider one.  The whole railway industry – not just Network Rail and the train operators - needs a properly functioning system for dispute resolution.  The railway supply industry and others have told me that they would welcome the establishment in the private sector of a body of expert mediators, adjudicators and arbitrators to whom recourse can be had when disputes cannot be resolved by agreement.  They have expressed themselves dissatisfied with a regime under which they are expected to have their disputes determined by third parties – whether lawyers, engineers, economists or persons from some other discipline, depending on the nature of the case – who know a great deal less about the industry than they do.  They dislike having to spend time and money first educating the tribunal in the ways of the industry, and do not have confidence that a person with such a low level of familiarity with the railway can always be relied upon to understand the issues involved to a sufficient extent.  They need and want something better.

“Today’s document therefore proposes the establishment of the Railway Industry Mediation and Arbitration Service (RIMAS) to meet this need.  RIMAS is to be a service available to the whole railway industry, not just parties to access contracts.  Its greatest advantage is that it will provide all concerned with a body of persons suitably qualified to mediate, arbitrate or otherwise resolve disputes and who have a sound knowledge and understanding of the railway industry and the operational, commercial and legal environment in which it operates.  They will come to the dispute with substantial relevant knowledge and experience.  I believe that the quality of service which RIMAS will provide to the industry will be such that it will soon become the mode of choice for the mediation and resolution of disputes between railway interests.  That is of course for the railway to decide through the use which it makes of the new regime.

“RIMAS should not be a body or service which depends for its constitution or functioning on any public authority.  The railway industry should be mature enough to resolve its disputes without such intervention or sponsorship.  I am therefore using today’s document to launch the idea of RIMAS.  It is up to the industry and others to take it up and make it work.”

The Regulator is seeking comments on his proposals by 25 June 2004.  Having considered the responses to the consultation, the Regulator intends to implement his proposals by issuing a modification notice under Condition C8 of the network code by 30 June 2004. This will make the necessary changes to the industry’s Access Dispute Resolution Rules with effect from 1 January 2005.

Notes for editors:

  1. Reform of the rail industry dispute resolution regime: a consultation document is available from the ORR website at http://www.rail-reg.gov.uk/upload/pdf/201.pdf and from the ORR Librarian, Sue MacSwan, 1 Waterhouse Square, 138–142 Holborn, London EC1N 2TQ, tel: 020 7282 2001, fax: 020 7282 2045, e-mail: rail.library@orr.gsi.gov.uk
  2. At present, disputes arising under access contracts – contracts for the use of track, stations or depots – are referred to the Access Dispute Resolution Committee or one of its sub-committees.  This body was set up in 1994 to resolve access disputes.  It comprises an independent chairman and eight elected members, from Network Rail and the train operators.
  3. The Regulator’s proposals concern reforming the constitution and rules of procedure of the Access Dispute Resolution Committee.  His powers to do so come from Condition C8 of the network code.
  4. As a separate proposal, the Regulator also proposes the establishment of the Railway Industry Mediation and Arbitration Service to provide a competent, efficient and effective method of resolving disputes of a wider class, not just access disputes, and available to all railway industry participants, not just Network Rail and the train operators.

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