Two law firms and a litigation funder have joined forces to bring a £93m opt-out collective action on behalf of “millions” of passengers who they say have paid twice for part of their train journeys in the South-East of England.
It is only the fifth collective action brought in the Competition Appeal Tribunal and the first not to have the benefit of an underlying regulatory decision.
The claim has been filed against the operators of the South Western and Southeastern rail franchises by campaigner Justin Gutmann, formerly of Citizens Advice, where he was head of research and insight, and before that London Underground, as the class representative.
He has instructed boutique London litigation firm Charles Lyndon and group action specialist Hausfeld to act, with funding from Woodsford Litigation Funding.
First MTR South Western Trains, Stagecoach South Western Trains and London & South Eastern Railway are alleged to have not made ‘boundary’ fares readily available for Travelcard holders to purchase, nor made passengers aware of their existence.
Boundary fares allow passengers who own a Travelcard – allowing them to travel in London – to go beyond the zones it covers without doubling up on payment.
This left customers with “little option” but to buy a higher fare than they would have needed because their Travelcard already entitled them to travel for part of their journey, the claim says.
Mr Gutmann claims this is an abuse of the companies’ dominant position and in breach of UK and EU competition laws.
He said: “Passengers in London already pay a lot of money for trains that are often delayed or not even running. Now following extensive research, we have found that some passengers are paying twice for parts of their rail journeys.
“We are launching this legal action to ensure that the money that South Western and Southeastern have made from this is returned to those train users.”
Passengers who owned a Travelcard at any time from 1 October 2015 and also purchased a rail fare from a station within the zones of their Travelcard to a destination outside of those zones may be eligible for compensation.
Dorothea Antzoulatos, director of Charles Lyndon, said: “We are delighted to be working together with Hausfeld & Co to represent Mr Gutmann in what will be the first stand-alone collective action in this country.
“A case such as this would not have been practicable before the introduction of the Consumer Rights Act 2015 and we hope that as a result of this action millions of rail passengers will be able to recover the compensation that is due to them.”
Woodsford’s chief investment officer Charlie Morris said third-party funding was an “integral part” of bringing collective actions.
The tribunal will next determine whether or not the claim is allowed to proceed.