Regulatory Outlook: Transport - November 2016

Current Issues

Applying the Consumer Rights Act 2015 to the rail, aviation and maritime sectors: The transport sector initially benefited from an exemption from the consumer compensation provisions of the Consumer Rights Act 2015 (CRA) to allow time to establish compensation schemes. The UK Government has now decided to withdraw the exemption on the grounds that consumers should not be denied any of their rights or protections, even for a temporary period. The CRA therefore applies in full to all transport services, including mainline passenger rail services, from 1 October 2016.

New Buses Bill: The Bill aims to significantly reform local bus travel in the UK. Operators will be required to make travel data accessible enabling developers to create better products for planning journeys. Local authorities will be given stronger powers to impose minimum service standards as part of their partnerships with operators. Controversially, the Bill will also enable councils to implement TfL-style bus service franchising. The Bill is expected to receive Royal Assent in mid-2017. For more information, please see our latest update here.

4th Railway Package: The package is intended to remove barriers to the creation of a single European railway. The proposed reforms will ensure a more competitive rail sector, with better connections between EU countries. It is aimed at cutting administrative costs for rail companies and opening up domestic passenger railways to new entrants by December 2020. Ultimately, the effect of this package on the UK will not be clear until the form that Brexit will take has been agreed. For more information, please see our latest update here.

Drones: Amazon is testing the viability of delivering small packages by drones. The Civil Aviation Authority has provided Amazon with special permissions to explore three key areas that would typically bind drone pilots: operation beyond the line of sight, obstacle avoidance and flights where one person operates multiple autonomous drones. The CAA believes that the tests will help it shape its future approach and drone policy.

Driverless cars: The government has used £20m of its £100m fund on eight new projects with the aim of positioning the UK at the forefront of the intelligent mobility market. The Centre for Connected and Autonomous Vehicles was also inviting businesses to apply for innovation project funding of up to £35 million to develop new autonomous vehicle technologies. DfT is currently analysing feedback on a consultation on autonomous vehicles that closed in September 2016. This may help shape the Modern Transport Bill, first announced in the Queen’s Speech in May 2016 and likely to be published early in 2017. It is intended to encourage investment in driverless and electric cars, and ensure insurance is available to users of driverless vehicles.

In Focus: Enforcement

Transport regulation is enforced principally through sector-specific regulators such as the Office of Rail and Road (ORR) and the Civil Aviation Authority (CAA).

ORR

The ORR is the independent safety and economic regulator for Britain’s railways and monitor of Highways England. It is mainly responsible for ensuring that railway operators comply with health and safety law and also has powers to enforce competition law in the rail industry.

There is widespread consensus that the ORR is succeeding from a health and safety point of view, with statistics showing fewer accidents on UK railways when compared to similar countries across Europe. This is a view supported by HM Chief Inspector of Railways and we expect the ORR to continue to monitor and enforce health and safety matters at the same levels. The Competition and Markets Authority has expressed a general concern that regulators across various sectors are not sufficiently using their concurrent powers of enforcement in relation to competition laws. Whilst other regulators already lag behind the ORR on this, we may see an increase in competition investigations and enforcement by the ORR.

The ORR ran consultations on the rail retail market in 2015 and issued its final report on these consultations in October 2016. The report’s conclusions indicate that the ORR is seeking to drive competition and create a more consumer-focused rail retail industry by trying to improve the position of third-party retailers of tickets in their dealing with Train Operating Companies (TOCs). The changes that are expected over the coming year include TOCs (via the Rail Delivery Group) introducing more transparency in their decision making processes, a role for third party retailers in discussions on industry developments and enhanced dispute resolution mechanisms for third-party retailers for their dealings with TOCs. It is envisaged that these changes will come about through TOCs accepting some of the ORRs recommendations, rather than via the exercise of any enforcement powers by the ORR.

CAA

The CAA is responsible for the regulation of all aspects of civil aviation in the UK. The CAA has civil powers to take enforcement action in relation to a range of passenger rights legislation and general consumer law and is also tasked by the DfT to investigate and prosecute breaches of aviation safety rules. Prosecution is one means by which the CAA ensures that the aviation rules for which it is responsible are properly observed and appropriately enforced.

With the number of drones in use continuing to rise, the number of incidents involving drones at airports has quadrupled this year. The CAA has recently launched a new drone awareness initiative which seeks to target the increasing number of recreational drone users in the UK, to ensure that their drones

are being operated safely and within the scope of its drone code at all times. The CAA ‘drone code’ states that drones should not be flown above 400 feet and kept away from helicopters, planes, airports and airfields. Those with cameras fitted should also be kept 50m from people, vehicles and buildings.

Following reports of a drone hitting a British Airways Airbus A320 plane as it came in to land at Heathrow Airport, the DfT has confirmed it is talking to manufacturers about introducing ‘geo-fencing’ technologies in drones. This technology would prohibit drones from being flown into geographical pre­programmed areas, such as airports. It could also set a limit on how high a device can fly, which would eliminate the issue of people flying their drones above the legal limit. Regulators appear to be seeking to solve drone issues by preventing regulatory breaches rather than limiting them via the deterrence of enforcement action.

Dates for the diary

1 October 2016

From 1 October 2016, the Consumer Rights Act 2015 will apply in full to all transport services, including mainline passenger rail services.

9 November 2016

The Centre for Connected and Autonomous Vehicles was inviting businesses to apply for innovation project funding of up to £35m to develop new connected and autonomous vehicle technologies. This includes how these vehicles will work as part of a wider transport system. The deadline for applications was 9 November 2016.

Autumn 2016

A provisional agreement on the more controversial Market pillar of the 4th Railway Package was reached in April 2016 between the Commission, Parliament and Council. Formal ratification of this agreement is expected in autumn 2016.

Early 2017

The Transport Secretary, Chris Grayling, has announced that the Modern Transport Bill will be published early next year to help Britain become a world-leader in autonomous driving technology.

2017       

The first phase of HS2 (construction of the London to Birmingham route) is due to begin in 2017.

2017

Driverless cars are expected to be trialled on UK roads.

Summer 2017

The Bus Services Bill is expected to receive Royal Assent.

For more information and details of all of the other areas covered by the Regulatory Outlook click here.