Out-Law / Your Daily Need-To-Know

Out-Law News 1 min. read

Rail franchise operators face mass claims from London commuters

Operators of the south-western and south-eastern rail franchises in England could collectively be forced to pay more than £90 million in damages to approximately three million London commuters after a competition case brought against them was given the go-ahead by a UK tribunal.

The businesses that have run the franchises since 1 October 2015 are accused of abusing a dominant market position, in breach of UK competition laws, over alleged failings around sufficiently making available or publicising the availability of cheaper rail fares, known as “boundary fares”, for outbound London passenger journeys.

In essence, it is alleged that customers who held Transport for London Travelcards and took journeys beyond the outer zone covered by their Travelcard would not have needed to buy a fare covering the whole of their journey, but only a Boundary Fare to supplement their Travelcard, and were therefore overcharged.

In a new ruling, the Competition Appeals Tribunal (CAT) certified the opt-out collective proceedings claims raised on behalf of impacted passengers by a retired researcher and specialist in public policy and consumer welfare, Justin Gutmann.

The CAT ruled that the claims are suitable for being brought as collective proceedings and that Gutmann is authorised to represent the class of customers in the cases. It has been estimated that 167 million journeys are within the scope of the claims and that the respective total value of the claim applicable to the south-western franchise is around £57m and around £36m for the south-eastern franchise.

Competition law expert Alan Davis of Pinsent Masons, the law firm behind Out-Law, said that it is the third opt-out collective proceedings claim to have been certified in the UK following the collective proceeding orders (CPOs) issued in the Merricks v Mastercard and Le Patourel v BT cases. It is the second stand-alone abuse of dominance claim to be certified.

Davis said: “As in the recent Le Patourel v BT case, the CAT held that the class representative’s case on abuse of dominance was reasonably arguable, despite abuse of dominance cases generally being complex and challenging to run. This indicates the CAT’s preparedness to allow such proceedings to go to trial.”

“This judgment provides further useful guidance on the CAT’s approach to both approving class representatives in opt-out collective proceedings, and its assessment of common issues among class members as against each respondent,” he said.

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