Get on board with the risks of ERTMS

Get on board with the risks of ERTMS

What are the legal issues around ETCS should things go wrong? Tammy Samuel and Darren Fodey take a look

The end is nigh for the colour light signal. As readers will see elsewhere in this issue, signalling in UK rail is a hot topic and there are many opportunities for rail professionals. According to current plans, over the next 25 years there will be a fundamental shift in signalling: away from the line side and onto the train. While the opportunities may be plentiful, they come with certain legal risks, which we consider in this article.

Digital railway

The introduction of the European Rail Traffic Management System (ERTMS) across the majority of the GB rail network is a huge project – the scale of which should not be underestimated. Indeed, Network Rail’s vision for a ‘digital railway’ could see ERTMS introduced onto the GB rail network even quicker.

Key advantages which Network Rail hopes to achieve sooner include:

•    a safer railway – with movement authorities being given from an in-cab display (Driver Machine Interface), drivers missing red lights due to line side signals being obscured will become a thing of the past;

•    reduced costs – with line side equipment removed, maintenance and renewal costs will be significantly less and signal failures should also be reduced in number; and

•    increased capacity – Network Rail expects a 40 per cent increase in capacity on the busiest urban networks as trains can run safely closer together, offering benefits to operators and their customers.

The introduction of ERTMS will necessitate the rollout of in-cab signalling across the entire rolling stock fleet. Line side signals will eventually be removed in some areas, meaning that all trains will have to be fitted with the on-train European Train Control System (ETCS) else they will not be able to operate on the network.

Procurement underway

First-in-class fitment of ETCS is in the process of being procured by Network Rail and the ROSCO’s in a number of tranches and fleet rollout is expected to be procured and financed as part of upcoming franchise competitions. Bidders taking part in such competitions should become very familiar with any requirements relating to ETCS fitment. For the freight and heritage fleets, there is even more urgency to install the equipment, given their ‘go anywhere’ nature.

The opportunities are happening now – but there are many legal risks which must be considered. With the introduction of ERTMS, rolling stock operators and owners are being compelled to introduce the ETCS technology onto their trains. An awareness of the possible legal issues involved in such a huge project means that businesses should not be passing their own red lights.

Potential liabilities

While the removal of line side signals will save Network Rail considerable sums of money, the introduction of in-cab technology means the organisation will no longer be wholly responsible for signalling. The train operator and the signalling system manufacturer will also have a role to play. In future, a ‘signal failure’ may mean the on-train technology is not working.

This then becomes a financial issue for the operator. While Network Rail’s delay responsibility could be reduced through the introduction of ERTMS, the train operator may incur additional liability under its track access agreement for on-train equipment-based failures. If the ETCS failure causes delays to other services, this may not be a small sum.

Will the train operator be able to pass on such liabilities to the ETCS equipment manufacturer and/or maintainer? This would require a direct contractual relationship between the two. Alternatively, will Network Rail always be responsible for signalling-related delays (as is almost always the case at present)? Should the signalling system supplier or the on-train equipment supplier be responsible? The solution is not yet clear.

What is clear is that signalling will be a multi-party endeavour – with roles for Network Rail, the train operator and the equipment supplier to play. It is also likely to involve delay attribution principles and other contractual arrangements being revisited. Liabilities will need to be fairly allocated.  Insurance arrangements may also need to be extended where the train operator is taking on signalling responsibility — previously an infrastructure-related issue.

Signalling supplier, ROSCO and operator

Through the procurement process outlined above, it will be Network Rail and the ROSCO’s who will have the direct relationship with the signalling supplier. However, the train operators will be expected to manage the on-train signalling system on a day-to-day basis. Certain obligations will need to flow down from Network Rail/the ROSCO’s to the train operator to ensure the system can be implemented in a timely manner, including ensuring access to the relevant rolling stock.

Train operators are also likely to be interested in a direct arrangement with the equipment supplier – for example, in relation to maintenance. Any such arrangement could also allocate responsibility for the financial impacts of any in-cab signalling-caused delays.

Supplier exclusivity?

From a practical perspective, it seems likely that once a supplier has been selected to provide the first-in-class technology, they will also provide it for the rest of that class, ensuring consistency of technology. This will be good for the successful supplier and increases its bargaining power. However, we understand that steps are being taken at the procurement stage to ensure that best value for money is obtained for the whole fleet (and not just first-in-class).

Ultimately, it will be the passenger operator who has financial (through increased rental payments) and contractual (in the franchise agreement) responsibility for installation of ETCS technology across the entire fleet. It will want rights to ensure the equipment supplier is doing what it has promised – suggesting a contract between the two will be vital. Similarly, because installation of the technology on the freight and heritage fleets will be procured by Network Rail, a direct relationship is even more important between freight operator and equipment provider.


Each franchise operator will be required by its franchise agreement to ensure the equipment is fitted to the full fleet – the cost of this will need to be factored into franchise bid submissions.  With vehicles being taken out of service for ETCS instalment, fleet management will also need to be a key consideration in bid submission. Driver management will also have to be factored in. With training on the new system taking an estimated two weeks per driver, there will need to be sufficient staffing resilience to ensure that passenger services can continue to be operated. All rolling stock will need to be fitted – and all drivers will need to be trained – before the “go-live” date – so there will be a set deadline by which all of this work will have to be completed.

Of course, ETCS fitment could be aligned with scheduled maintenance cycles to ensure vehicle down-time is reduced. This will need efficient fleet management – not only on initial installation but on subsequent maintenance. Fleet availability will need to remain sufficient to ensure contracted services can continue to be delivered – this may need additional rolling stock to be factored into business plans.

Ultimately, the ETCS project involves many elements with legal implications and legal risks for those involved. Whilst the commercial solution requires a thorough understanding of those legal issues, readers must not forget that this commercial solution must be reached because without the technology installed, the trains will not be able to run. In practice, a number of parties will need to work closely together to ensure the successful implementation of this project. Legal issues will be important – and a collaborative working relationship between all interested parties will be vital.

Tammy Samuel is a partner and Darren Fodey is an associate in the Rail team at law firm Stephenson Harwood

2015-03-27T12:07:45+00:00March 27th, 2015|April 2015|