Cubic Transportation Systems Limited v Transport for London & Anor

The proceedings before the Court concern a challenge by the Claimant (“CTSL”) to the procurement (the “Procurement”) by the Defendants (“TfL”) of a contract for revenue collection services (the “Proteus Contract”). CTSL was the unsuccessful tenderer. There was one other tenderer, the Interested Party (“Indra”). Indra took no active part in the hearing before me, but did submit evidence.

I handed down judgment in respect of TfL’s application to lift the automatic suspension on 15 January 2026. TfL succeeded in that application.

The applications presently before the Court are applications by TfL and Indra for orders that CTSL pay their costs of and associated with the application to lift the automatic suspension and for payment of sums on account of such costs.

CTSL accepts that it should be required to pay TfL’s costs of TfL’s application to lift the automatic suspension and of CTSL’s application for an expedited trial.

CTSL and TfL are agreed that those costs should be the subject of detailed assessment.

Accordingly, there will be an order that CTSL will pay TfL’s costs of TfL’s application to lift the automatic suspension and of CTSL’s application for an expedited trial, such costs to be the subject of detailed assessment if not agreed.

TfL says that that the costs which it has incurred which will be the subject of detailed assessment amount to £1,201,444.75. It seeks a payment on account of those costs in the sum of £720,866.85. That is 60% of the full amount claimed.

CTSL accepts that it should make a payment on account, but says that the amount should be no more than £300,000.

CTSL submits that the onus is on TfL to demonstrate that it is likely, on detailed assessment, to recover at least the amount sought by way of a payment on account.

It submits further that TfL has not provided adequate information as to its costs, and that the Court should therefore err on the side of caution in estimating the amount that TfL will recover on the detailed assessment.

CTSL further submits that there is no fixed percentage of a receiving party’s costs which should be awarded by way of a payment on account. The appropriate amount/percentage will depend on the circumstances of the case, including: (i) the level of the costs claimed, relative to the Court’s provisional assessment of what amount would be reasonable and proportionate; and (ii) the quality of the information provided by the receiving party to facilitate such assessment.

I accept the principles which CTSL submits that I should apply.

In reaching a conclusion, I note the following:

I have no doubt that on the detailed assessment TfL will recover at least £720,866.85. Accordingly, I order a payment on account in that amount.

Indra seeks a payment of £233,599 in respect of its costs.

There is an issue of principle raised by CTSL. It refers to the judgment of Fraser J. in Bechtel Ltd v High Speed Two (HS2) Ltd [2021] EWHC 640 (TCC) in which he set out the principles to be applied to an application by an Interested Party permitted to participate in a procurement dispute:

25.

I draw the following principles from the court's power to order costs, and the decision in Bolton, which I consider are of general application to costs applications by interested parties in procurement challenges. They are as follows:

1.

The court evidently has power to order costs under the statute, and such costs are discretionary. The power must however be exercised in accordance with the Civil Procedure Rules, and in particular CPR Part 44 which deals with costs (and Part 44.2 dealing with the court's discretion as to costs).

2.

Ordinarily, an interested party (who for these purposes will usually be the winning bidder) must be able to show that there is a separate issue on which he was entitled to be heard, that is to say an issue not covered by the contracting authority; or that he has an interest which requires separate representation, in order to recover costs.

3.

The mere fact that a party has won the bid does not automatically entitle him either to become an interested party in the litigation, or indeed, to recovery of his costs if the challenge by the claimant fails.

4.

The court will, for procurement proceedings under the Regulations, when granting a winning bidder the status of interested party, have made an order in this respect. That order will clearly state the extent to which that interested party is entitled to participate. The order formalises the involvement of the interested party in the proceedings. This is a matter of active case-management. Simply because an interested party is involved at one stage of the proceedings does not entitle that party to participate in later stages of the same proceedings.

5.

Simply having been made an interested party by way of such an order does not automatically, of itself, entitle the interested party to its costs.

6.

There may be specific and unusual features of any particular case upon which an interested party may rely when it seeks an order for its costs in these circumstances. There can be no exhaustive list of these prescribed in advance. The court will, when exercising its discretion, take all the relevant factors into account, but the presence of one or more of these unusual features will make it more likely that an interested party can obtain a costs order in its favour.

I accept the applicability of the above principles.

CTSL submits in paragraph 7 of its counsel’s submissions on consequential matters:

7.

Applying these principles, there should be no costs in Indra’s favour:

7.1

There are “no specific and unusual features” which would justify a costs order in Indra’s favour. On the contrary, the interests of TfL and Indra were entirely aligned in respect of the Application To Lift (and the Expedition Application), on which TfL made comprehensive submissions. Indra had no distinct interest requiring separate representation, and there was no separate issue on which Indra sought to be heard.

7.2

The mere fact that Indra was, by consent, granted permission to participate in the Application To Lift does not mean that Indra is entitled to a costs order. Indra’s contribution was ultimately minimal, and of minimal value: Indra did not make written or oral submissions, and its evidence was barely mentioned in the Court’s judgment.

CTSL further submits that the figure of £233,599 as set out in Indra’s statement of costs appears to cover all work which its solicitors have done since the commencement of the proceedings, including work which is entirely unrelated to the Application to Lift or the Expedition Application.

I accept that it appears that the costs of £233,599 includes a significant element of the costs incurred by Indra which must relate to work which is entirely unrelated to the application to lift or the expedition application. Certainly, it would be a very high figure for a watching role at the hearing before me.

I do not think it would be right for me at this stage to decide whether in principle Indra is entitled to any order for costs of participation in these proceedings. That issue should be considered when the issues between CTSL and TfL have all been resolved and it can then be seen what role Indra has played in the resolution of those issues.

At that stage it can be considered whether and to what extent any order for costs made in favour of Indra, if one is made, should include the costs of Indra associated with the hearing before me.

Accordingly, I reserve Indra’s application for costs to the trial judge.

I direct that the Parties should liaise with this Court’s Listing Office to fix a CMC with a time estimate of half a day for the first date after 1 April 2026 that is convenient to the Court and the Parties.