Railtrack Private Shareholders Action Group
Railtrack Private Shareholders Action Group (RPSAG) was formed at a meeting of Railtrack shareholders on the 19th October 2001. The RPSAG website stated that the mission of the group was to ‘obtain a fair and just settlement for the 255,000 private shareholders of Railtrack who lost millions when their company was forced into administration by the government’. Railtrack was a group of companies that owned track, signalling, tunnels, bridges, level crossings and stations that made up the British Railway System. It was placed into railway administration under the Railways Act 1993 on the 7th October 2001 following an application to the High Court by the then Transport Secretary Stephen Byers.
A number of other action groups were formed after Railtrack was put into administration. These included Railtrack Shareholders Action Group (RSAG) which represented institutional shareholders and Railtrack Action Group (RAG) which was a web based group which abandoned legal action after accepting an increased share offer. RPSAG was the only group to take their case to court.
Railtrack shareholders experienced a dramatic decrease in the value of their shares. RPSAG believed that Railtrack’s financial difficulties were caused by the government and that the government’s actions reduced investor confidence in the organisation. These factors, they argued, saw shares become ‘almost worthless, not because Railtrack was bankrupt but because of the government’s covert and politically motivated actions’.
RPSAG operated from the office of their solicitors, Edwin Coe in Chancery Lane, London. The group was an unincorporated association without any separate legal status. All communications emanated from Edwin Coe and all formal committee meetings took place there. The group was known by their initials RPSAG, pronounced ‘rap-sag’.
Andrew Chalken, a Network Rail employee was elected as Chairman at the group’s inaugural committee meeting on the 26th October 2001. The Committee varied in size throughout the group’s existence with some early members leaving and committee members played more or less prominent roles depending on their skills and experience. In 2005 the committee was made up of 13 former Railtrack investors, rail workers and other interested individuals ranging from a former rugby international to an NHS paediatrician. No committee members were paid for their work.
Members of RPSAG paid a membership subscription of £20, plus - for those who took part in the legal action - an amount that related to the number of shares held, approximately 5-10p per share. An additional £30 was required after April 2005. Membership closed on the 10th June 2005. Members were characteristically small shareholders. The RPSAG website describes them as ‘ordinary people who were saving for their retirement, saving for their children, happy to invest in the country’s railways as a safe home for their savings’.
On the 30th September 2002 RPSAG launched its legal campaign fund by writing to all its members and asking for a contribution to a fund for legal action. The group exceeded its target of £2 million and on the 9th January 2003 the committee formally agreed to launch its legal action against the government. On the 2nd December 2003 RPSAG issued a claim to the High Court, the claim form states that:
'The claimants who were all shareholders of Railtrack plc on the 7th October 2001, Claim damages (including exemplary damages) for misfeasance in public office and/or breach of the Claimant’s rights under Article 1 of the First Protocol to the European Convention on Human Rights arising out of the role of the Secretary of State for Transport and the Department for Transport in Placing Railtrack plc in administration on the 7th October 2001'.
The trial took place in June to July 2005, however judgement was reserved until October 2005. The group was represented by solicitors Edwin Coe and by Keith Rowley QC and was the largest class action ever conducted in English courts. The judgement went against RPSAG, and on the 21st October 2005 the group made the decision not to appeal and they subsequently began proceedings to disband. RSPAG was finally wound up in 2007 and their financial surplus was donated to a railway charity.