Railtrack, created in 1993, owns almost all the UK’s vast railway infrastructure. It is one of the largest commercial estate owners in Britain, with 20,000 miles of track, 2,500 stations, and more than 40,000 bridges and tunnels. Tenants include Battersea Dogs’ Home and the London International Financial Futures and Options Exchange.

Railtrack’s customers are the 25 train operating companies and the freight companies. Its job is to provide access to its network, manage the allocation of train paths, plan and co-ordinate train movements, and produce a workable timetable.

The company has launched a £27bn investment programme to ensure the network provides suitable transport for the 21st century, and legal work will grow as this starts to bite.

Railtrack’s company structure is simple. Its architect is head of legal Simon Osborne, previously head of legal at BR. Osborne says: “The trick was to have a holding company which was not regulated (unlike the core operating business), as there might come a time when we had a non-regulated business.”

Below the holding company, Railtrack Group PLC, lies the trading company Railtrack Corp, which holds two non-trading arms (Railtrack

Projects and Railtrack Stations). Another trading arm, Railtrack (UK), was set up to handle the Channel Tunnel Rail Link project. There is also Railtrack Insurance, a Guernsey-based captive insurer. The latest addition is Railtrack Developments, set up in March 1999.

The legal function of 15 lawyers is a far cry from pre-privatisation days, when BR had a 140-strong department with 80 lawyers handling most work in-house. Today, the lawyers advise on core matters but contract out most bigger-ticket work.

The legal department is split into three teams. Secretariat is headed by deputy company secretary Paul Worthington, an ex-Royal Navy officer said to run “a tight ship”. Next comes an infrastructure team headed by Geoffrey Kitchener, and a corporate team, led by Nigel Dewick. Two lawyers are based in Scotland.

“We are the first line providers of legal advice. We seek to identify and manage legal risk; and we are informed buyers of external legal services,” says Osborne.

Core work includes health and safety, environmental, advice on inquests (a spin-off from providing a transport infrastrucure), and advice on claims – “such as oversized lorries and buses getting stuck under bridges,” says Osborne. Property-related claims are also common: “With all the rail lines, we’ve got more neighbours than anyone else in the country,” he says.

The lawyers also train managers on the latest legal issues, whether in property law or litigation. Most “transactional” matters, including the bulk of property work, and litigation is outsourced to around 18 law firms (see list above). Many are smaller local firms, which are best-placed (and priced) to handle work in the regions.

Simmons & Simmons, appointed after Railtrack’s creation, remains the key corporate and commercial firm. Following its success in helping in the rescue of the Channel Tunnel Rail Link, Simmons’ stock is high. Simmons also handles some of the vast property development work.

Railtrack looks for strong, long-term relationships with its lawyers. All the firms except Simmons are on three-year contracts. “Time is needed to build a relationship,” says Osborne. Railtrack closely monitors quality and value provided. Osborne says: “We drive a hard bargain on fees.” But there is a quid pro quo. “Our obligation is to be a ‘good client’, which includes giving clear instructions and defending lawyers when needs be,” says Osborne.

Simon Osborne
Head of legal and company secretary

Organisation Railtrack
Sector Transport
FTSE 100 ranking 50th
Market capitalisation £6.7bn
Employees 11,000
Legal function 15 lawyers
Head of legal Simon Osborne, company secretary and solicitor
Reporting to Chairman
Main location for lawyers London (with two in Scotland)
Main UK law firm Simmons & Simmons (main corporate firm, also handles property work); MacRoberts (Scotland); Berwin Leighton, Linklaters, Clifford Chance (property development); Thomas Eggar Church Adams, Rees & Freres (general property); Kennedys, Vizards, Greenwoods, Kershaw Abbott, Hay & Kilner, Thomas Eggar Church Adams, Nabarro Nathanson, Hugh James, Cartwrights (litigation)