American-style class actions have arrived in the UK, and the railway’s fares and ticketing system is fast becoming a major target. Litigation is currently underway against four separate train companies, who could be liable for hundreds of millions in damages.
The new type of ‘opt out’ class action enables mass consumer rights challenges at the Competition Appeals Tribunal (CAT). Previously, such cases took place on an ‘opt-in’ basis, requiring the sign up of a group of claimants. Now, it’s possible to undertake an action on behalf of a prospective ‘class’, where a defined group of people are included by default and entitled to compensation if the case is successful. This means that a single individual or ‘class representative’ can represent potentially millions of people.
The class actions have been possible in the UK since the Consumer Rights Act 2015, but there was slow progress until August 2021; when the first ever case, Merricks vs Mastercard, was granted permission to go forward by Competition Appeal Tribunal (CAT). This historic precedent cleared the way for a much quicker process; and as of May 2022, five further cases have been certified by the CAT, with at least sixteen at earlier stages of litigation.
As predicted in the Financial Times, and across the legal press, 2022 is sure to be a big year for class actions. There are currently lawsuits underway against four separate train operating companies; all relating to consumer rights issues that passengers have been complaining about for years.
The Boundary Fares Claim
The first ever ‘opt out’ class action against the railway was certified in October 2021, alleging breaches of competition law against the South Eastern and South Western rail franchises in relation to the sale of ‘boundary fares.’ The £93 million claim was approved to go forward on 28th July 2022, following a failed appeal by train companies.
The case alleges an ‘abuse of market dominance’ by Southeastern and South Western, in failing to make cheaper ‘boundary fares’ available to London Travelcard holders. It argues that train operators have been overcharging passengers who travel outside the Zone 6 boundary; effectively charging double for the portion of the journey already covered by their Travelcard. The damages claimed go back to 2015, including: The Go-Ahead Group/Keolis (Southeastern); First/MTR (South Western Railway); and Stagecoach (South West Trains).
The GTR Boundary Fares Claim:
In November 2021, Justin Gutmann registered a further, £73 million ‘boundary fares’ case against Govia Thameslink Railway Ltd, Govia Ltd, the Go-Ahead Group and Keolis. It now awaits permission to go forward, and may be combined with the two other boundary fares claims.
The Govia Thameslink Railway Claim
In July 2021, a new claim was announced against Govia Thameslink Railway by joint class representatives Edward Vermeer and David Boyle. It was awarded a Collective Proceedings Order (CPO) on October 5th, permitting the case to go forward to trial.
The GTR case alleges an abuse of market dominance in relation to ticketing and fares on the Brighton mainline and at Victoria station. GTR is the only train company in the UK to have ‘sub brands’ within the same company, and the case alleges that it has used Southern Rail, Gatwick Express and Thameslink to ‘unlawfully’ control ticket options, overcharging passengers by tens of millions.
A high risk of further litigation
The certification of Justin Gutmann’s ‘boundary fares’ claim in October 2021 represented a historic precedent for consumer rights actions against the railway. With many other train operators crossing the London boundary, there is a high risk of further litigation in this area alone.
Legal commentators have long predicted that the new class action regime will be ‘potentially franchise-ending territory’ for train companies, but there is increasing concern that the taxpayer might be left to foot the bill. Despite years of warnings, the government and rail industry have failed to enact rail fare reform and currently continue with the questionable practices around the sale of ‘boundary fares’ and GTR’s use of sub-brands to control ticket prices.
[This page remains under editing as the legal actions progress. It was last updated on 25/10/2022]