High Court rules on Heathrow / Crossrail access dispute

26 May 2017

Heathrow Airport Ltd v Office of Rail & Road [2017] EWHC 1290 (Admin)

The High Court (Ouseley J.) has dismissed a judicial review challenge by Heathrow Airport to the decision of the Office of Rail & Road concerning Heathrow’s ability to impose track access charges on Crossrail reflecting the costs of building the Heathrow rail spur.

Crossrail services are due to commence operations into Heathrow in 2018 and will use the Heathrow rail spur, which was funded and built privately by the airport in the 1990s for the Heathrow Express. In May 2016 the ORR determined that, when charging Crossrail access fees to use airport rail infrastructure, Heathrow could not take into account its historical long-term costs of constructing the railway. This meant that ongoing costs to Heathrow of around £40m-£60m a year could not be recovered from Crossrail users and would instead fall on airline passengers. This was a matter of concern to the Civil Aviation Authority, who made representations to the ORR and intervened in the judicial review claim.

In his judgment, handed down today, Mr Justice Ouseley has dismissed Heathrow’s challenge to the ORR’s decision. While accepting that there was force in Heathrow’s criticisms of the decision and the quality of the ORR’s reasoning, the Judge found that it was rationally open to the ORR, on the evidence before it, to conclude: (i) that the railway spur would still have been built even if fare revenues were inadequate to recover any of the long-term costs, given the railway’s importance to the development of the airport; and (ii) that the CAA would not have precluded such costs being recovered from airline passengers.

In relation to whether the Heathrow rail spur is properly exempt from the relevant EU framework as a “network intended only for the operation of urban or suburban passenger services”, the Judge found that the answer was not clear at all and that “rail services to its main airport seem an obvious part of rail services for a conurbation”. However, he ultimately declined to decide the point on the basis that a decision in Heathrow’s favour was likely to cause substantial prejudice to the Crossrail sponsors, and since the point was academic between the parties given their contractual relations.

A copy of the judgment is available here.

Heathrow Airport Limited was represented by Gerry Facenna QC and Ligia Osepciu. The Civil Aviation Authority was represented by its standing counsel, Anneli Howard.