SCOTTISH transport giant Stagecoach has said it is “disappointed” after losing a High Court ruling against the UK Government but it has abandoned further litigation over the wrangle.

The Perth-based company that was co-founded by Sir Brian Souter said after the judgement yesterday that it would no longer pursue the case over a Department for Transport decision to throw out the company’s bids for three UK rail franchises.

Stagecoach earlier said it would not bid for new rail franchises after it was ruled out of the running for the East Midlands, South Eastern and the West Coast when the DfT said it did not take on sufficient risk for a railway workers’ pension scheme.

Stagecoach alleged the DfT had mismanaged the bidding process and was seeking compensation. Instead, it faces a costly legal bill.

The company has now all but exited the UK rail franchising business after its role in its long-running partnership with Virgin Trains ended when the West Coast franchise was transferred to FirstGroup and Trenitalia.

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The Dft welcomed the court decision, as did FirstGroup, which was an interested party in the case.

Stagecoach said in its statement that it “notes the decision of the High Court in respect of its claims against the Secretary of State for Transport regarding decisions to disqualify the group from three rail franchise competitions”.

It said: “We believe there were important issues which needed to be determined by the court to help secure the future of the country’s rail system and our view remains that we were right not to accept the risks in these contracts.

“Nevertheless, while we are disappointed at the ruling, we accept the decision and move on.

“The country is facing a huge challenge in fighting the Covid-19 pandemic, and all of our energies are focused on ensuring our transport networks help the national effort at this critical time.”

Sir Brian, who established Stagecoach with sister Dame Ann Gloag in 1980, stepped down as chairman of the company at the turn of the year but remains the second-biggest shareholder.

The DfT said the judge found that the terms of the franchise competitions and how the department conducted them “were fair and transparent”.

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It said the court rejected “all the challenges” brought by Stagecoach, and the judge found “that the disqualification decision was proportionate”.

A DfT spokesman said: “We strongly welcome this decision, which finds our franchise process was fair, our conduct was transparent, and the disqualification at the heart of this case was proportionate. Our focus now rightly remains on tackling the Covid-19 pandemic, helping ensure the safety of passengers, and working to build a railway that works for everyone as we begin the process of recovery.”

Aberdeen-based FirstGroup, the successful bidder for the West Coast Partnership franchise, said: “We welcome the ruling and the clarity it brings.

“We considered all aspects of our successful West Coast Partnership bid carefully and with a sensible and responsible approach to risk.

“Our current focus is on supporting our communities through the current pandemic, and we are working hard to deliver a future, cleaner, greener railway for our West Coast customers and partners who will see improvements including a fleet of new and refurbished trains, more routes and services and an improved onboard experience.”

Stagecoach shares closed at 66.6p, down 4.58 per cent.