Letter to the Committee from the Legal
Services Director, Department for Transport
The purpose of this letter is to provide you
with additional information about the legal action that the Railtrack
Private Shareholders Action Group (RPSAG) has now commenced and
to raise some of the potential handing issues.
The litigation is an action by the Railtrack
Private Shareholders' Action Group against the Secretary of State
for Transport and the Department for Transport. The claim alleges
misfeasance in public office and a breach of Article 1 of the
First Protocol to the European Convention of Human Rights (protection
of property). The claim is that the defendants devised and implemented
a plan to expropriate the assets of Railtrack Group, with the
specific intention of harming shareholders. At the relevant time,
David Rowlands was the Director General of Railways, Aviation,
Logistics and Maritime in the Department for Transport, Local
Government and the Regions advising the Secretary of State in
respect of this matter. He is, therefore, a key witness for the
defence in this action.
The NAO Report is essentially concerned with
the events subsequent to the making of the railway administration
order against Railtrack on 7 October 2001, and I anticipate that
the main thrust of the PAC's examination will focus on these issues.
However, this litigation was referred to in the latest draft of
the report seen by the Department, and so it is possible that
the PAC might wish to explore the events leading up to and including
the decision by the Secretary of State to petition the High Court
for a railway administration order in respect of Railtrack plc.
These matters are directly relevant to the subject matter of the
litigation. It would not be surprising if Mr Rowlands were cross-examined
on these matters at trial.
Although the proceedings in this action have
only recently been issued, shareholder groups first threatened
legal action against the Government within days of the administration
order being made against Railtrack. Since then, there has been
ongoing media interest, and the launch of the proceedings in December
of last year attracted considerable press coverage. Now that the
defence has been filed, we anticipate further interest and this
is likely to continue intermittently until after the trial. The
Department readily recognises that the public has a proper interest
in the matters which will be the subject of the trial. But the
Department is also entitled to a fair hearing. The risk to a fair
trial can be created as much (if not more so) by press reports
as by what is actually said in evidence before the PAC.
Accordingly I wish to explore with you all proper
and appropriate avenues to try to ensure that a fair trial in
this case is not prejudiced. There seem to me to be two principal
issues to consider.
First, article 9 of the Bill of Rights affords
protection to those giving evidence to a Select Committee from
being subjected to a penalty, civil or criminal, in any court
or tribunal for things said in the course of proceedings in Parliament.
However, I understand that it is now common practice for the courts
to have regard to statements made by Ministers and others in proceedings
in Parliament when adjudicating upon an application for judicial
review of a ministerial decision. Furthermore, the Joint Committee
on Parliamentary Privilege of 30 March 1999 recommended that the
exception of judicial review proceedings from the scope of article
9 should also apply to other proceedings in which a ministerial
decision is material. The decision taken by the Secretary of State
to petition for a railway administration order in respect of Railtrack
plc is not just material to, but central to, the court action.
It is therefore possible that the claimants in the action may
attempt to use at trial any answers given by the Permanent Secretary
to the Committee. However, since the Secretary of State's decision
is not central to the Committee's consideration of the NAO Report,
any answers he gives about the application for the railway administration
order may give an incomplete picture of the whole process that
led up to that decision. The claimants could attempt to take advantage
of any omissions in the evidence before the Committee when they
cross-examine at trial. In order to avoid that risk, the Permanent
Secretary may need to give long and detailed explanations and
in doing so may take up the Committee's time unnecessarily on
matters that are not central to its primary business. I would
like to explore with you further how this might best be handled.
Secondly, the House of Commons resolution on
"matters sub judice" of 15 November 2001 provides
that, subject to the discretion of the Chair to the Committee,
proceedings which are "active" in the United Kingdom
courts are not to be referred to in any motion, debate or question.
The proceedings in this case were issued on 2 December 2003, and
the Department filed its defence on 3 March 2004. It is possible
that the case management conference might take place before 26
May but, even if it does not, we are likely to have a date for
it by then. If it has taken place, a timetable for the management
of the case will have been set, and we will have been given dates
between which the trial should take place. On present indications
the trial is unlikely to take place before the beginning of next
year. There is no reason for the Department to think that the
claimants do not intend to proceed to trial and, as far as the
Department is concerned, it intends to defend the action robustly.
I should therefore like to explore further with you the application
of the sub judice rule in circumstances such as this and, in particular,
whether this would be regarded as an "active" case for
the purposes of the rule.
Christopher Muttukuaru
Legal Services Director
19 April 2004
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