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Insights

06 May 2015

Undertakings and Assurances – How Protected are Petitioners?

Many petitions have now been heard by the Select Committee but, as we have long been saying, the idea is to settle the petition without having to appear in front of the Committee if possible.  The question though is what that settlement looks like and what level of protection does the settlement provide?

As set out in HS2 Information Paper B4, undertakings and assurances are the two options available to HS2 Ltd and other parties when negotiating safeguards in relation to specific aspects of the high speed rail project.  Although both provide reassurance to third parties that the project will be conducted in a certain way, there are differences in the way they are enforced and in the resulting contractual relationships.

An undertaking is a contractual agreement, usually set out in legal documents, between HS2  and the petitioner.  An undertaking is therefore directly enforceable by a petitioner.  In contrast, an assurance is a unilateral commitment  by HS2  which is then worked into the contractual obligations owed to the Secretary of State by the party who actually constructs and operates the railway (the nominated undertaker).

Paper B4 details the methods of enforcement and states that the  Secretary of State is expected to provide an undertaking to Parliament that he will take such steps as he considers reasonable and necessary to secure compliance with all relevant undertakings and assurances.  In addition, as was the case for the Channel Tunnel and Crossrail projects, all undertakings and assurances will be recorded in an official register which will include a list of all commitments given as well as, according to Tim Mould QC (Leading Counsel for HS2), the  ‘essential jist’ of each.

As a petitioner deciding on strategy, there are several aspects to consider, including:

  1. An assurance is only directly enforceable by the Secretary of State, leaving the petitioner with no direct recourse should they feel that the terms of the assurance are not being adhered to;
  2. A petitioner will have no influence over the contractual terms agreed between the Secretary of State and the nominated undertaker which are supposed to give effect to the assurance;
  3. In the event of a breach of an assurance, the Secretary of State will have to consider the potentially negative effect of any enforcement action on the relationship with the nominated undertaker and on the project as a whole (although there will be a nominated HS2 Complaints Commissioner whose job it will be to consider those complaints that cannot be effectively dealt with through the nominated undertaker’s own processes).

Petitioners should be aiming for undertakings – ideally set out in a full written agreement setting out all of the terms agreed.  However, there is no guarantee that HS2 will be willing to provide an undertaking, so in some cases, an assurance might be the only option on the table.  Whilst not directly enforceable by a petitioner, assurances are by no means lightweight – any nominated undertaker in breach of the terms of an assurance will find themselves in very hot water and ultimately answerable to the Secretary of State and Parliament.

Clearly, HS2 would prefer to give assurances – they rule out the possibility of direct legal action from disgruntled petitioners and they allow for broader, less precise terms than would be required for in-depth legal undertakings.  Undertakings are significantly more time consuming and costly to produce and petitioners will likely find that they have to really push HS2 to give them the protections needed..

Ultimately, petitioners want to ensure that commitments provided by HS2 ltd are given maximum protection.  If an undertaking is on the cards, it should be pushed for.  However, an offer of an assurance should not be dismissed out of hand – especially if one can be obtained in the short term with a structure programme put in place to generate a more detailed and specific undertaking (or undertakings) being provided later on.

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