Judge lifts automatic suspension on award by TfL of revenue collection contract

Roger Ter Haar KC, sitting as a deputy High Court judge, found any reputational damage that failed bidder Cubic Transportation Systems (CTSL) might suffer would be rectified by damages were it to win.

The dispute concerned the Proteus contract, which TfL awarded to rival bidder Indra.

Proteus covers the management and operation of TfL’s revenue collection system, the upgrading of Oyster cards to a digital card, conversion to barcode ticketing to replace magnetic stripes, expanding contactless payments to National Rail stations outside the London area; and strengthening anti-fraud measures. Proteus will initially run for seven years and is worth some £800m.

CTSL became the incumbent contractor in 2014 and after two extensions has the role until August 2026.

TfL wrote to CTSL after bids were received to say it had failed the first technical question and so had been disqualified. Extensive pre-action correspondence and disclosure followed.

CTSL then filed its claim and argued that damages would not be an adequate remedy because the contract is exceptionally large and prestigious, failing to secure it would require a radical downsizing of CTSL's business and that damages might be difficult to assess.

TfL responded that there was no existential risk to CTSL or the wider Cubic Group of which it is part, the alleged harm to CTSL's reputation did not mean that damages were inadequate and redundancies or job losses are could be remedied in damages.

Mr Ten Haar said it was possible for failure to gain a large and prestigious contract to give rise to loss that cannot be compensated in damages, “but such loss or the risk of such potential loss has to be established”.

He said CTSL had numerous large contracts around the world and “the mere failure by CTSL to win this tender should not necessarily mean to a future employer that CTSL's place in the market place as a successful and professional designer, supplier and maintainer of such systems is diminished, although…such a case as to diminution of reputation might be made out on evidence before a court in future.”

He accepted TfL’s submission that CTSL had so far failed to establish that its failure to win the Proteus Contract would significantly affect its chances in future procurements because of loss of reputation.

Mr Ten Haar explained: “It seems to me that the most important consideration is that I have concluded that the fact that the Proteus contract is large and prestigious does not mean that damages are not an adequate remedy.

“Further I have concluded that the case put forward as to disruption to CTSL's business and loss of staff does not establish that damages are not an adequate remedy.”

TfL argued that were the suspension kept in place but CTSL lost at trial, damages would be an inadequate remedy for it because passenger benefits would be delayed, critical assets near the end of their reliable lifespan could not be replaced while the dispute was live and Indra's offer expires in March 2026.

Mr Ten Haar said it was likely to take two years for the matter to proceed through the courts and such a delay would disadvantage passengers in a way that cannot be compensated by damages.

A TfL statement after the case concluded said: “In the coming months, Indra will work with Cubic Transport Systems, who have operated the Oyster and Contactless system since it launched, to ensure a smooth transition of the current services and systems to Indra.

“This carefully managed process will ensure that customers are not impacted as these systems are transferred. A number of Cubic Transportation Systems staff working under the current contract will also transfer over to Indra, where applicable, as part of this transition period.”

Mark Smulian