Train operators threatened with surge in compensation claims

DEADLOCK is looming between train operators and the government over how much passengers should be compensated for late or cancelled trains, especially if the disruption means that passengers suffer severe ‘consequential’ losses, such as missing a flight.

Operators are increasingly under fire over punctuality. The consumer group Which? has accused them of misleading passengers about their rights when trains run late, and now a transport minister has signalled that he is in favour of tightening the rules still further.

Train companies have always been reluctant to take ‘consequential’ losses into account. These can be much higher than the price of a rail fare, such as when passengers trapped on a late train with economy ‘no-change’ air tickets miss a long-haul departure. In such a case, the price of the lost air fares can easily run into thousands of pounds, particularly if several people are involved.

The railway industry rules which have developed since the 1990s concentrate on the immediate effects of unpunctuality, offering partial or even full refunds of train fares if a delay is serious enough. ‘Delay Repay’ now starts to apply on some operators’ services after only 15 minutes, and this stricter margin is set to spread further as franchises are renewed or updated.

A change in the law in 2016 was intended to improve passengers’ rights. The Consumer Rights Act now allows claims for consequential loss when a rail service is ‘not provided with reasonable care and skill’, but this level of proof is ‘a very high legal hurdle to clear’ according to the Rail Delivery Group, which says compensation is already ‘increasingly generous and easy to claim’. It also denies allegations that passengers have been misled.

A spokesman added: “Train companies are sorry whenever journeys are disrupted and we have been happy to work with the government and the regulator to make clearer our customers’ rights. Nevertheless, it is important for our customers to understand that it is very unlikely they will be entitled to compensation for additional losses.”

However, the RDG may be speaking too soon. Rail minister Jo Johnson has told reporters: “There will be consequential impacts for passengers in certain circumstances and it’s right the conditions of travel are now making that clear to passengers, so that they can claim accordingly. In law they do have certain rights as consumers.”

This means that late-running trains could soon be triggering dramatically higher claims from delayed passengers, with similarly dramatic effects on the finances of operators and Network Rail.

The prospect of increased compensation has naturally been welcomed by consumer rights campaigners. Alex Hayman, managing director of public markets at Which?, said: “It’s good to see the rail minister backing passengers who should be able to claim for reasonable out-of-pocket expenses when their train service has been disrupted and it is the fault of the train companies.

“Train companies can no longer hide behind misleading terms to avoid compensating passengers and should proactively inform people about their rights. If the rail industry fails to do so, then the Government and the regulator must hold them to account.”

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