It has been a rocky ride of late for the rail industry.

Several franchisees have been lambasted and fined for their poor performances, a number of high-profile disasters -- Ladbroke Grove, Paddington, Hatfield -- have shaken the confidence of the rail-using public, and the government successfully applied to the High Court for Railtrack to be put into administration.Herbert Smith finance partner David Moore says the disasters -- Hatfield in particular -- may have put paid to some aspects of the government's ten-year plan announced last June, at the same time it vowed to invest £60 billion in the railways.Mr Moore, who specialises in the rail sector, is advising London & Continental Railways in relation to the Channel Tunnel rail link and acted for Stagecoach with regard to the South West Trains franchise.

He says: 'On the face of it, there is money available, but there may be some smoke and mirrors element to this because it is difficult to see what it's for in practice.

Anyway, they seem to be putting money where their mouth is and there should be some cash available, which is just as well because rail projects are expensive.'However, he adds that since the Hatfield tragedy, this earmarked cash may well have to go towards the track repairs which are desperately needed.

'It is only since Hatfield that people have realised how bad the state of our rail is.

There is a funding shortfall but although some schemes won't be deve loped, it won't mean that all schemes are scrapped.'Mr Moore says that legal work in the rail sector could soon diminish -- at least in some areas.

'We are busy on various things but there seems to be a bit of a hiatus at the moment -- probably because of the Railtrack situation.

It is likely that things could get quieter while the industry reorganises.

The reorganisation could involve legal work, but the big projects may take some time.'Michael Whitehouse, a rail partner at Birmingham firm Wragge & Co who acts for the Access Dispute Resolution Committee, Cummins Engines, DaimlerChrysler and Travel West Midlands, agrees.

He says: 'There is nothing happening at the moment.

There are only a couple of franchises being negotiated -- the rest are on hold.

The excuse is the Railtrack situation but I think they were probably thinking about it before.'The Treasury has got a lot of things to fund and it is having to pay towards the rail infrastructure as well.

As result of the accidents -- Hatfield in particular -- everyone realised that the infrastructure was not up to scratch and they are still working on that now.

That's what caused Railtrack's downfall.

The UK rail industry is effectively on hold until the government decides what to do.'But according to City firm Rowe & Maw's head of banking and projects, Neil Morrison, things for lawyers are presently looking pretty active.

Mr Morrison, who acted for Virgin Rail on the fleet renewal for the West Coast Main Line and CrossCountry franchises, explains: 'I think there is going to be a lot of work for lawyers as the new franchises come into play and increasingly the Strategic Rail Authority (SRA) seeks to extract better terms from franchisees.

We should also see a lot of work with leasing contracts, finance contracts, issues involved in upgrading the tracks and infrastructure will also require lawyers.'Peter Manford, a commercial and projects partner at the Birmingham office of Eversheds who acts for the SRA, says the Hatfield disaster is likely to emphasise the need for more safety provisions, which will, of course, require investment.But Mr Whitehouse says there is a basic conflict in making a profit and improving safety.

'Safety costs money but companies are required to make a profit so there has been a lot of cost-cutting and corner-cutting.'He says a safety regime will be introduced on the implementation of the Cullen report, which was produced after the Ladbroke Grove disaster.

'It will give the Health and Safety Executive more power to approve safe systems of work and to set up independent accident investigations.'By some quirk of privatisation, Railtrack acts as judge and jury because they approve safety and control investigations.

People thought this was a bad thing and it was only partly resolved by putting safety into a subsidiary of Railtrack.'Mr Morrison explains that while the SRA regulates and supervises the franchises to train operating companies (TOCs), the rail regulator -- solicitor Tom Winsor -- regulates Railtrack, sets track-access charges, and allocates licences to TOCs to operate on British tracks.'Regulation of an industry like this is very difficult.

It is very easy to look at the state of the railways and for people to say -- misleadingly -- that it is the fault of the regulators.

I don't think it is.

Many things contributed like the lack of capital investment before privatisation and a number of problems arose from the relative haste with which privatisation was pushed through.'Mr Moore recently completed a year on secondment at the SRA.

'It wa s interesting -- it gave me a good insight into the problems being faced by the rail industry and the interaction between the SRA, Railtrack and the TOCs.

There is conflict between them and there is a constant conundrum as to how this can be resolved.

Putting Railtrack into administration may have gone some way towards resolving it.

Railtrack was a stumbling block to many developments within the industry, so something had to be done.'The SRA has recently appointed a new chairman, Richard Bowker.

Mr Moore says: 'He is young and dynamic with a lot of experience in the rail industry.

He will come with new ideas but he will have difficulty winning over the hearts and minds of the rail industry.'Mr Manford says the impact of the Railtrack situation has not yet been fully felt by the industry but adds: 'It has to be likely that this will affect everybody.

It's now inevitable that there will be change and everybody is waiting to see what those changes might be.'Although the government has expressed an interest in establishing a not-for-profit body to take over Railtrack's functions, Mr Manford says that such a dramatic shift is not inevitable.

'Railtrack's liabilities are being met at the moment and there is a strong possibility that they will continue to be met.'Of the not-for-profit body -- which would probably be managed by the TOCs -- Mr Morrison says: 'They are still working on the detail of how it might work, but it will be very different to Railtrack.

The essential difference, of course, is that it is not for profit, which might be good in terms of public perception.'However, Mr Whitehouse does not think the not-for-profit model is a particularly good idea.

'It has been done in other sectors and it could cause difficulties in encouraging funding.'The rail industry, he says, had been managed on a declining basis for years but with a surge in demand for more trains, the need for investment in the substandard infrastructure is becoming increasingly clear.'The whole thing needs improving but the money isn't there.

The private sector has been investing quite satisfactorily in schools, hospitals and roads for years but hasn't really had the opportunity to invest in rail.

The government needs to build up confidence so the private sector will invest on a long-term basis and get a return.

It's being done with light railways, and something similar needs to be rolled out for the national network.'Mr Morrison says there has been a lot of criticism about the length of the franchises allocated so far.

'Most of the initial ones were only for seven years.

That is not enough time to enter into financial commitments and pay it off.

A lot of investment is required to get the railways to the level where they are providing the service that the public is entitled to.'Mr Whitehouse adds: 'No one is going to invest if it is for such a short term.

The government has either got to fund the railway itself -- which it can't afford to do -- or allocate long-term concessions to encourage the private sector to invest.'Mr Morrison predicts that the industry will increasingly see the use of public-private partnership structures being used for regeneration projects.He explains that the cost of most rail projects is so huge that many people are unwilling to put them on their balance sheets.

'They look to raise limited recourse finance either by syndicated loans or by bond issues in capital markets.'Mr Whitehouse says an influx of knowledge would help to lift the rail industry.

'After privatisation, a lot of people took early retirement and left, taking their knowledge with them.

This has not yet been properly replaced.'Such a seeping of knowledge clearly did n0t help Railtrack initially.

Mr Whitehouse says: 'Railtrack didn't know what it owned or what condition it was in until the rail regulator required it to find out.

Consequently you had trains too long for the platform or too wide for the tracks.'The current state of the rail network suggests solicitors are about to take an epic journey every bit as stimulating as that aboard the Orient Express or The Flying Scotsman.