Just days after concluding its long-running legal battle with Spanish passenger train manufacturing Talgo, HS2 was hit with a fresh lawsuit by Siemens Mobility, another of the shortlisted companies involved in the project’s drawn-out rolling stock procurement process.
The German manufacturer filed a procurement claim against HS2 on June 21 relating to the £2.75bn contract, which will see the selected party provide 54 high-speed trains for use on lines between London and Birmingham, and the West Midlands to Crewe.
Siemens is one of five shortlisted, alongside Talgo, Alstom, CAF, and a joint venture between Bombardier and Hitachi. Siemens hopes to produce the rolling stock at its newly built facility in Goole, Yorkshire, which has also been contracted to build 94 new London Underground trains to serve the Piccadilly line.
No official decision has been made. However, The Telegraph reports that the legal action comes with Siemens set to lose out in the procurement process, with the contract set to be awarded to the Bombardier and Hitachi venture.
Neither Siemens Mobility nor HS2 have revealed details regarding the dispute, given it is ongoing. Future Rail contacted both companies, but as of yet has not received a response.
However, the case follows a previous challenge to HS2’s rolling stock procurement process from Talgo, which was settled out of court in June three years after it was launched. That lawsuit materialised after CAF was added to the shortlist after the process had begun. CAF was initially left off of the tender bidding list in November 2017, but was added in June 2018, with Talgo claiming HS2’s decision “failed to exercise rational judgement”.
The company’s challenge centred on three issues. Firstly, Talgo claimed HS2 has unlawfully permitted some tenders to proceed with changes having been made to the tenders and qualifications made to the bids. Secondly, it claimed, HS2 had breached its obligations in relation to Bombardier’s acquisition of Alstom, both of which were shortlisted. Finally, Talgo accused HS2 of bias, which had impaired the procurement process.
Could mounting legal challenges derail HS2?
HS2’s decision over which of its five shortlisted companies to hand the rolling stock contract for Phase One and 2A of the HS2 project has been a long time coming.
Started back in 2017, the process was initially set to conclude in Spring 2020. This was pushed back to the end of the year as it became apparent Phase One wouldn’t be ready to open in 2026 as initially planned. In March, Andrew Stephenson, Minister of State for Transport, then told Parliament that the process would be awarded in spring 2021.
So far, no decision has been made, but the latest HS2 Ltd corporate report suggests that the contract will be awarded in October.
However, the Siemens Mobility action could cause further delay. Under UK procurement law, Dominic Richardson, partner at law firm Gowling WLG says, the procurement process is automatically suspended if a challenge arises. The onus then falls on the procuring authority, in this case, HS2, to convince the courts that the suspension should be lifted.
“The interesting question is whether Siemens’ claim will be fast-tracked in the same way the Talgo claim was,” Richardson says.
“The fast-tracking of the Talgo claim is reflective of a trend where the Technology Court is more inclined to order a fast-tracked trial rather than suspending a procurement – and the exceptional circumstances apparently demonstrated in this HS2 litigation could make it more likely that similar procurement challenges are fast-tracked.”
Since the Department for Transport announced HS2 would go ahead in 2012, the project has faced constant pressure from local authorities, homeowners, activists, and shortlistees. These challenges have caused frequent delays, but it remains to be seen whether HS2 will be derailed entirely.
A timeline of HS2 legal challenges
A judicial review by the 51m group, made up of local councils impacted by the proposals, was one of five heard by The Royal Courts in a seven day period in late 2012. Councils such as Camden argued that the proposals would cause £1bn in damage, including the potential demolition of 500 homes in the borough alone. The court ruled in the Government’s favour in all but one of the challenges, effectively giving the green light for HS2 to commence.
HS2 Action Alliance
HS2 Action Alliance, an umbrella group for more than 70 local associations, brought a compensation case against HS2, arguing that the project would negatively affect homeowners along the route and that the consultation process had lacked enough detail on compensation arrangements. The judge deemed this ‘unlawful’, forcing the public consultation process on compensation to be reopened.
Talgo launched legal action over what it claims was a ‘botched’ procurement process. Due to claimed breach of procurement laws, the manufacturer called for the process to be scrapped and restarted. Talgo and HS2 reached an out of court settlement in June 2021, ending the three-year dispute.
Sydney & London Properties
Sydney & London Properties launched a £500m lawsuit against HS2 after it was forced to sell properties as part of a compulsory purchase order. The property investor claimed the purchase price of £200m had failed to consider the area’s redevelopment potential. The lawsuit was withdrawn in March 2021 after the two parties reached an undisclosed agreement, thought to be less than the £500m Sydney & London Properties initially sought.
Engineering firm Bechtel launched legal action against HS2 after losing out on a £1.1bn contract to build Old Oak Common station in West London. Bechtel claimed the winning Balfour JV bid was “abnormally low” and that it ought to have been awarded the contract had HS2 conducted the evaluation properly. In March 2021, a judge dismissed the claims, ruling the BBVS bid was within the expected range and deeming the decision to have been fair.
Euston homeowner Hero Granger-Taylor was granted permission to bring a judicial review against HS2 over proposed tunnels near Euston station. Granger-Taylor claimed the tunnels would ‘endanger the lives and properties of residents nearby’ by causing vulnerability to above-ground structures. The judge sided with HS2, stating that evidence did not suggest the tunnel design was so flawed that an engineering solution could not be found.
Naturalist and television personality Chris Packham launched a legal challenge against HS2, claiming the UK Government had failed to consider carbon emissions and climate impact when approving the project. The campaigner claimed the project will destroy close to 700 wildlife sites, including 100 ancient woodlands – a figure disputed by HS2. The High Court refused an emergency injunction and judicial review, deciding there was “no real prospect of success”.
Legal action brought by Mark Keir from the Earth Protector Communities organisation on ecological grounds saw the felling of trees in the Chiltern Hills Area of Outstanding Natural Beauty paused after protestors were granted the right to apply for a judicial review. The decision was later overturned by a High Court judge due to the high cost of further delays to the HS2 project, enabling work in the area to recommence.
The Siemens Mobility lawsuit is the latest to hit the HS2 project regarding the rolling stock procurement process. Few details have been confirmed, but the lawsuit comes with Siemens Mobility expected to lose out on the £2.75bn contract.