TAMMY SAMUEL and ZOE HARRIS from law firm Stephenson Harwood LLP discuss compensation rights under the Consumer Rights Act 2015 and what they could mean for train operators and passengers
Train delayed again? Booked First Class but no First Class seats are available? Further help is now at hand. Certain provisions of the Consumer Rights Act 2015 which recently came into force allow railway passengers to make claims against train operators not only in the event of a delay or cancellation to a service, but also where Wi-Fi, catering or even seat reservations are unavailable. In this article we consider how the Act may impact upon existing compensation schemes, as well as how train operators advertise on-board services.
How the Act works
Under the Act, train operators must now provide services with reasonable care and skill, within a reasonable time, and for a reasonable price. Services must also be performed in line with certain information given about the train operator or the services.
If train operators do not fulfil their obligations under the Act, passengers are entitled to require repeat performance or (more likely in a rail context) seek a price reduction (which may be up to a full refund) from the train operator. Any refund must be given without charge and undue delay. Train operators must also refund passengers in the same way that the passenger paid for the ticket originally.
Consequences for train operators
The Act may be a welcome change for passengers but it will undoubtedly have an impact on how train operators compensate passengers and advertise services. Train operators are unable to contract out of the Act. Passengers will therefore be able to claim under the Act as well as under existing compensation schemes (such as Delay Repay schemes). Train operators will need to assess the risks arising from passengers having recourse to multiple avenues of compensation, and reflect any risks in their fares, subsidy or bid premiums.
With the Act now holding train operators to general standards of service, passengers are also able to claim compensation if a train operator’s service fails to meet the passenger’s expectations. This may include where a passenger pays for a first class ticket but no first class accommodation is available, or if a train operator advertises on-board Wi-Fi or catering and these services are unavailable on-board. A passenger may make a claim even if the additional service is ‘complimentary’ and therefore is not charged for on the face of the ticket.
Train operators will therefore need to exercise caution when advertising or promoting on-board services. If train operators make certain representations about their services, these representations may be considered to be terms of their relevant ticketing contracts. Under the new Act, advertising slogans such as ‘Your Seat is now a Hot Spot’ may give rise to passenger claims if the service as represented in the advertisement is unavailable.
A possible exemption?
In a consultation undertaken late last year, the Department for Transport (DfT) has proposed that train operators are exempted from those provisions of the Act which grant passengers the right to make a claim if a service is delayed or cancelled. The DfT’s view is that passengers are already entitled to clear remedies that are well established. Allowing the Act to operate in parallel to existing compensation schemes could result in confusion and greater costs for passengers. The DfT’s public consultation remains under review.
The recent Which? Super-complaint has however highlighted that the remedies currently available to passengers are neither clear nor straightforward. In responding to the DfT’s consultation, the Office of Rail and Road (ORR) noted that passengers already under-utilise existing compensation schemes because of complicated claims processes and a lack of available information on compensation rights. An exemption from the Act may not resolve these issues.
The ORR has instead proposed that the Act continues to exist alongside existing compensation schemes, and that train operators and others improve the information that they provide to passengers on compensation rights to resolve any confusion.
Whatever the outcome of the consultation, the Act broadens passengers’ rights and exposes train operators to claims that they may never have faced before. It will be interesting to see in the coming months how train operators tackle the issues that the Act creates and whether advertising of on-board services becomes more conservative.
Zoe Harris Tammy Samuel
associate in the rail team partner in the rail team
at Stephenson Harwood LLP at Stephenson Harwood LLP