Arbitration after referral under section 40(3)

I beg to move amendment No. 24, in clause 41, page 27, line 33, leave out ‘results’ and insert ‘objectives’.

I accept that the amendment might be described as an exercise in terminology and semantics. Arbitration has come up a number of times in our discussions and we now come to two clauses that set out how it will work in practice, as it relates to the duty to co-operate. When I first read clause 41(1), I was slightly taken aback. Arbitration is, by definition, a process by which a third party settles a dispute between two persons or organisations. The implication of the subsection, however, is that the Secretary of State can directly arbiter as to the outcome of an arbitration in which one party is the nominated undertaker.

As we know, the nominated undertaker could be an appointee of the Secretary of State and could even be the Secretary of State herself. I would like to give the Minister the benefit of the doubt and assume that that was not the intention in drafting the subsection. After all, we do not want the defendant to be able to tell the jury and the judge exactly what to do.

In my exercise in terminology, I suggest a wording that would remove the doubt. Replacing “results” with “objectives” would make it clear that the Secretary of State could have a say in what form the outcome of the arbitration should take, but not in what the decision was. I ask the Minister to consider those points. Perhaps he will look favourably on the amendment.

Perhaps we should rename the amendment the “number of angels dancing on the head of a pin amendment”. To set these matters in context, the clause sets out the mechanism for disputes under clause 40(3) to be settled by arbitration. The general provisions on arbitration are continued in clause 62. Subsection (3), which the amendment would affect, allows the Secretary of State to direct the arbitrator as to the overall results to be achieved by the settlement. That is to avoid the possibility that the outcome or result of the arbitration might prevent something that is critical to the Crossrail project.

I bear in mind the criticisms that the hon. Gentleman has made on this and previous clauses. Even if he has reservations, I hope he understands that the results of an arbitration cannot allow the construction of Crossrail to be impeded in any way. That is the only caveat that the Secretary of State will have in mind when making those directions. The arbitrator will have full control over the terms, including as to compensation of the arbitration award, subject to the rule that it must achieve certain practical results.

The direction of the Secretary of State will generally be only to facilitate the completion of the Crossrail works within the agreed time scale or cost, or to do with the subsequent maintenance of the all-important services that Crossrail will deliver. Even then, the Secretary of State will ensure that Crossrail is not delivered to the unreasonable detriment of the rest of the rail network.

The amendment’s use of objectives in subsection (3) is the angels-dancing-on-the-head-of-a-pin section. In terms of legal semantics, it would ultimately miscast what is happening. In making a direction, the Secretary of State has an objective concerning the construction, maintenance or operation of Crossrail. In acting further to the direction, the arbitrator will retain his original objective—the fair resolution of a dispute—within any parameters established by the direction.

To offer some further reassurance to the hon. Gentleman, as with clause 40, this is likely to be a fall-back power in practice. First, there is the general reassurance for the rail industry of the Department’s intention to work within normal industry processes as far as possible in connection with the Crossrail project. Secondly, it is envisaged that many of the works will be undertaken by railway operators that have a direct interest in integrating Crossrail works successfully with their own existing assets. Finally, some agreements are already in place regarding those matters. I hope that the hon. Gentleman will consider withdrawing the amendment.

I hear the Minister’s reassurance that he expects this to be primarily a fall-back power. That does not necessarily mean that we should allow fall-back powers to have a lower test than we apply to other things. None the less, I hear that he thinks that we are dancing on a pin head.

Not you personally.

If only I could. I fully understand the objectives. However, the word “results” has an implication of trying to affect the arbitration and prejudge it. I have listened to the Minister and am happy with his reassurance. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 41 ordered to stand part of the Bill.

Clause 42 ordered to stand part of the Bill.