Shetland Line remains in legal contention with Scottish Government on Northlink Ferries tender

Gareth Crichton of the Streamline Shipping Group has made it clear that Streamline’s subsidiary, Shetland Line [1984] Ltd, has not given up on its pursuit of the Scottish Government over matters surrounding the controversial award of the contract to operate the state subsidised ferry services for the Northern Isles.

Shetland Line [1984] Ltd succeeded in having a legal suspension on the award of contract served on the Scottish Government in the late spring of 2012. This stalled the completing of contractual arrangements with the government’s chosen operator, the multinational privateer, Serco, which had no previous experience of operating seagoing ferry services.

Shetland Line’s initial success was followed by an an unfavourable opinion at Judicial Review by Lord Malcolm, which he admitted: ‘At least to a degree this will be impressionistic..’ in lifting the suspension.

Much about this matter was unsatisfactory, through no fault of the Judge.

Judicial Review may not revisit the evidence that leads to a disputed decision. It is focused on a scrutiny of process and may only really consider three things:

  • was the decision taken ultra vires – or beyond the statutory powers of the deciding body;
  • was the decision unreasonable;
  • was the decision demonstrably unfair.

Transport Scotland had chosen to deploy a new tendering system for the Northern Ferries contract – competitive dialogue tendering . This system did and does appear to offer considerable latitude to the defensible award of a contract to a pre-determined bidder.

In this instance, therefore, with the imperative to examine the application of evidence to the decision taking in a newly adopted tendering procedure, Judicial Review, with its intrinsic constraints, is a poor fit.

There were weaknesses in the opinion itself. In our view, the interpretation of ‘the public interest’ was, in the context of this case and its potential precedent, inadequately framed.

But in Lord Malcolm’s defence, as he made clear, he was under pressure of constraint to deliver an opinion in short order – the unchallenged assumption of this pressure being, effectively, that the Scottish Government might go ahead to install Serco as operator of the Northern Isles ferries, with as little loss of time as possible.

This itself seems contrary to the supposed primary function of law, with which expediency is a strange travelling companion.

Mr Crichton’s statement

Mr Crichton says: ‘Shetland Line (1984) Ltd v Scottish Ministers is very much alive.

‘While Lord Malcolm upheld SGs [Ed: Scottish Government's] motion to remove the initial suspension of the contract award to Serco for the Northern Isles Ferry Services which resulted from our challenge, the company is now pursuing damages.

‘The Session Court role for Thursday 13th June 2013 provided the opening round.

‘We remain firmly of the belief that the tender process was fundamentally flawed in that the Government’s needs and requirements were not adequately specified, and further, that the ‘competitive dialogue’ process was conducted amid irregularity.

‘That the (Scottish Government owned)NorthLink Ferries bid for its own service apparently failed to meet the required quality standard, and that NorthLink/David MacBrayne Group is reported to have sought and obtained legal opinion confirming a breach of procurement regulations on the part of the Government (their owner), should raise considerable concern on the west coast also.

‘How will Calmac fare in the chase for what will surely be a more lucrative contract than that which drew Serco to Orkney and Shetland?

‘We aim to put the spotlight on this flawed process and the players in it, to ensure that the time, energy and cost of bidding is properly compensated for.

‘We have no intention of being swatted aside (ref your lead article of 4th October 2012). The more questions asked of this ‘new’ approach to procurement the better.’

Emerging evidence

In Serco’s ongoing operation of this contract, matters have emerged which would appear to sustain Mr Crichton’s assertion that, in the new tendering process deployed, ‘the Government’s needs and requirements were not adequately specified’.

A case in point is the major month-long breakdown of the Serco Northlink service to Orkney in April and May 2013, where it was shown that there was no or inadequate  contractual obligation to provide a replacement ferry in the event of the normal boat going out of service.

It is inconceivable that in a so-called ‘lifeline service’ the Scottish Government would not have been concerned to ensure continuity of such a service in the event of ship breakdown. That this core matter does not appear to have been adequately specified amongst the government’s ‘needs and requirements’ is a powerful piece of evidence in support of Shetland Line’s contention.

Then Tavish Scott, MSP for Shetland, has recently shown through FoI that there was no consultation between Serco and the users of the ferry before the introduction of substantial reductions to traditional discount schemes. While pensioners were also affected badly by this, the cut to group discounts had the impact of hiking fares and creating serious difficulties for school groups and sports clubs in Shetland continuing traditional visits to the Scottish mainland and competitive games with other clubs there.

Again, since these specific fare changes negatively impact on the nature and quality of island life, they conflict with a key purpose of state subsidy for the route.

Once again, it would appear that the Scottish Government cannot have adequately specified its ‘needs and requirements’ in the ‘competitive dialogue’ tendering process that led to the award of the contract to Serco.

It will be interesting and informative to see how Shetland Line fares in its legal pursuit of this matter. We would hope to see process and opinions which do not appear to operate on the assumption that the state must prevail; but which assert,  as others have memorably done, the fully objective – blind – justice in law.

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One Response to Shetland Line remains in legal contention with Scottish Government on Northlink Ferries tender

  1. Regarding the Dunoon Gourock ferry service one of the ‘needs and requirements’ the Scottish Government failed to specify was that the vessels employed could actually operate reliably in the weather on the Firth of Clyde.

    How incompetent is that!

    Like or Dislike: Thumb up 2 Thumb down 1

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