Rail operator Govia faces landmark £73m tribunal challenge

Transport correspondent JEREMY CLACKSON reports on a landmark court case which seeks to show that the rail operator behind Southern, Thameslink and Gatwick Express services has been over-charging passengers

GTR is cutting back services across south London

A legal claim for compensation of up to £73million was made today against Govia Thameslink Railway  – the operator of the Southern, Gatwick Express and Thameslink trains which run through East Croydon – as an estimated 3.2 million passengers are overcharged for their rail fares.

GTR is alleged to have not made “boundary fares” sufficiently available for Travelcard holders to purchase, nor making passengers aware of their existence, leaving commuters to pay a higher fare than was necessary. It is calculated that since November 2015, 240million journeys could have benefited from boundary fares on the various GTR services if travellers had been aware of them.

The multi-million-pound legal action comes two months after Govia was stripped of their Southeastern operation and threatened with a possible Serious Fraud Office investigation into the withholding of £25million of payments going back seven years that were due to the Department of Transport.

Govia, whose operation of the Great Northern franchise is also part of the legal action, face a collective claim which was filed today with the Competition Appeal Tribunal.

The action has been brought in the name of Justin Gutmann, a consumer rail campaigner who last month secured the landmark legal approval to bring to trial collective actions seeking compensation worth up to £93million against two other rail operators, the South Western and Southeastern rail franchises, over the same issue.

Consumer champion: Justin Gutmann

The claim revolves around the lack of access to “boundary fares” – where travellers holding a London Travelcard should be offered discounted tickets taking them from the boundary of any zone covered by the card to their destination.

The rail company’s failures have left customers with little option but to buy a higher fare than was necessary because their travelcard already entitled them to travel part of their journey.

Lawyers acting for Gutmann, a former head of research and insight at Citizens Advice, claim that this is a breach of competition rules, under Section 18 of the Competition Act 1998, and an abuse by Govia of its market powers.

The claim is thought to affect an estimated 3.2million passengers who held travelcards and used Govia services since November 2015.

“This claim is the latest step in my campaign to stamp out routine overcharging of millions of passengers by some of Britain’s top rail operators,” Gutmann said today.

“The failure of these companies to make boundary fares more freely available is scandalous and has been going on for years. It’s a practice that needs to stop – and passengers who have overpaid deserve compensation.”

What is the claim about? What are boundary fares?

Boundary fares allow passengers who own a travelcard to travel beyond the zones it covers without doubling up on payment.

Independent research has demonstrated that such fares are not readily available online or over the telephone and are rarely offered at ticket counters unless expressly requested. This practice is an abuse of the company’s dominant position and in breach of competition law.

Who is eligible?

Crossing the boundary: millions of passengers may have paid more than they needed to

Passengers who owned a travelcard at any time from October 1, 2015, and also purchased a rail fare from a station within the zones of their travelcard to a destination outside those zones may be eligible for compensation under the Consumer Rights Act 2015.

This allows for a collective claim to be brought on behalf of a group of individuals who are alleged to have suffered a common loss. As a result of the 2015 Act, groups of persons who have all lost out do not need to bring an individual claim to bring compensation for their loss.

Instead, these consumers may all receive compensation through a single, collective claim brought on their behalf by Mr Gutmann.

Affected passengers will not have to pay any legal costs to participate in the claim and do not need to do anything at this stage to be included in it.

What next?

The Competition Appeal Tribunal will determine whether or not Gutmann’s claim is allowed to proceed. Anyone who would like to receive further information about the claim, can visit the claim website, www.BoundaryFares.com to sign up for updates.

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News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
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