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Collective competition claim against Govia Thameslink Railway

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yorkie

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I work as a contract manager and am always mindful that if a dispute were to arise, it is the written agreement that will tend to prevail, and any "evolution" would need to be proven - usually quite onerous, and liable to bring out quite a lot on the way.

I'd also observe that the case is based on the impact of the alleged anti-competitive behaviour on farepaying passengers, and therefore that whether "the industry" did or did not approve of GTR's conduct might in fact point to guilt (as evidencing cartel like behaviour) rather than innocence.

As the TSA is a contract between RSP and the operators, I'm not quite sure (but IANAL) how it is that the actions of GTR in selling brand level tickets not provided for in the TSA could be actionable by a customer who is not party to that contract. However, the arguments about anti-competitive (and anti-consumer) behaviour seem at face value much more compelling.
I broadly agree with this.

Though I'll point out that a customer in dispute with the TSA does not need to refer to the TSA in any dispute with the company.

To the best of my knowledge, all complaints and requests for refunds of excess fares, penalty fares, additional fares charged to the holder of a ticket that was rejected for use on the 'wrong' brand, that I've been aware of, have all been refunded. I've certainly not heard of any cases where a refund was not forthcoming. I don't recall any cases being escalated to the Rail Ombudsman (or Transport Focus, pre-2018).
 
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Tazi Hupefi

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The TSA can be found here:


It currently has no provision for brand restricted fares, but if you think it will be modified to enable such fares, I'll predict it won't be, and in time we will see who was right :) Shall we revisit this in, say, a year?




Your argument appears to be that the Department for Transport has effectively "changed" the TSA by turning a blind eye to breaches of it? Is that what you are saying? Even if you were able to argue this successfully, I don't see how this would change the outcome of this case.
Because again, you are assuming that the TSA (something arrangement / agreement?) however you are reading it, does prevent what you say it does.

My point, is that regardless of what is written, agreements can and do change, especially if they’ve been there for a long time. I have no idea how old these arrangements are, but again, just because a change occurs which is not in writing, does not mean that a change has not been made or accepted. As another poster says, this is not an ideal situation, and it is always best to have it in writing, but it is not required technically.

Do you know whether the DfT have turned a blind eye? Or maybe they believe the contract has evolved through custom and practice or other “side letters” or communications etc which you are not privy too- although clearly that is for Govia to prove, if that’s the case!

I am also a bit confused how you believe this agreement is binding on a passenger anyway- could you possibly provide a copy of this agreement if one exists? I’d be keen to take a look and know what I’m banging on about!
 

yorkie

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Because again, you are assuming that the TSA (something arrangement / agreement?) however you are reading it, does prevent what you say it does.
I am making no assumptions. With respect, as you don't know what the TSA is, I don't think we can have a useful debate about it.


My point, is that regardless of what is written, agreements can and do change, especially if they’ve been there for a long time. I have no idea how old these arrangements are, but again, just because a change occurs which is not in writing, does not mean that a change has not been made or accepted. As another poster says, this is not an ideal situation, and it is always best to have it in writing, but it is not required technically.
Yes the TSA has changed over time but this principle has not changed. We're just going round in circles.


Do you know whether the DfT have turned a blind eye? Or maybe they believe the contract has evolved through custom and practice or other “side letters” or communications etc which you are not privy too- although clearly that is for Govia to prove, if that’s the case!
I do not know what defence (if any) will be mounted by GTR, nor do I know what DfT's view will be, but it's going to be interesting to see what happens.

I am also a bit confused how you believe this agreement is binding on a passenger anyway- could you possibly provide a copy of this agreement if one exists? I’d be keen to take a look and know what I’m banging on about!
The TSA is not binding on a passenger, but it is binding on GTR.

See this thread from May 2020, in which a Penalty Fare was unlawfully issued (contrary to the Penalty Fare legislation) and refunded:


Compliance with the TSA is a franchise commitment for any franchise operator (as well as for any open access operator who wishes to receive revenue from interavailable fares).
 

Kilopylae

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formal policies, documents, agreements etc can evolve over time, even without updates to wording.

the agreement has evolved through custom and practice, or other non written agreements

regardless of what is written, agreements can and do change, especially if they’ve been there for a long time. I have no idea how old these arrangements are, but again, just because a change occurs which is not in writing, does not mean that a change has not been made or accepted. As another poster says, this is not an ideal situation, and it is always best to have it in writing, but it is not required technically.

The argument that the practice violates the TSA as written, but that GTR have acquired an implied/customary right to it because the DfT have left them alone over it, is rubbish.
 

Tazi Hupefi

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The argument that the practice violates the TSA as written, but that GTR have acquired an implied/customary right to it because the DfT have left them alone over it, is rubbish.
Do you have any evidence that it hasn’t been explicitly approved or discussed with the DfT, and a side letter or email authorisation (or similar) does not exist?

Some cursory searches show that it is DfT that seem to control the revenue for the GTR (Govia) franchise, so you would well imagine there is far more going on than meets the eye.

I think the alleged breach of the “TSA” is a red herring, especially as it’s been accepted it is not binding on a customer, and is managed via the franchise agreement, which, is presumably managed by the DfT. If the franchise agreement has been breached, given the years this has presumably been going on, whilst clearly the DfT must be aware, then I’m not sure DfT see it as a breach, or must have reached an agreement with Govia. Otherwise why would the DfT not enforce that requirement, especially when it likely means Govia have to pay a financial remedy?

If this is such a big issue, prior to litigation, surely somebody just have spoken to the DfT?!
 
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35B

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Do you have any evidence that it hasn’t been explicitly approved or discussed with the DfT, and a side letter or email authorisation (or similar) does not exist?

Some cursory searches show that it is DfT that seem to control the revenue for the GTR (Govia) franchise, so you would well imagine there is far more going on than meets the eye.

I think the alleged breach of the “TSA” is a red herring, especially as it’s been accepted it is not binding on a customer, and is managed via the franchise agreement, which, is presumably managed by the DfT. If the franchise agreement has been breached, given the years this has presumably been going on, whilst clearly the DfT must be aware, then I’m not sure DfT see it as a breach, or must have reached an agreement with Govia. Otherwise why would the DfT not enforce that requirement, especially when it likely means Govia have to pay a financial remedy?

If this is such a big issue, prior to litigation, surely somebody just have spoken to the DfT?!
Personally, I think the issue is the other way round, and that DfT have (tacitly or explicitly) supported GTR in operating outside the strict terms of the TSA, and in an anti-competitive, anti-consumer, manner.

What then becomes interesting is whether DfT have any authority to vary the application of the TSA in that manner, given that it is a contract between Rail Settlement Plan and the train operators.
 

island

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The argument that the practice violates the TSA as written, but that GTR have acquired an implied/customary right to it because the DfT have left them alone over it, is rubbish.
Not necessarily. Under the legal rule known as estoppel a person who fails to enforce a breach of a contract for a considerable period can be deemed to have consented to the breach and be prohibited from enforcing it in future.

However, many modern contracts contain wording excluding this rule.
 

yorkie

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I think the alleged breach of the “TSA” is a red herring, especially as it’s been accepted it is not binding on a customer, and is managed via the franchise agreement, which, is presumably managed by the DfT. If the franchise agreement has been breached, given the years this has presumably been going on, whilst clearly the DfT must be aware, then I’m not sure DfT see it as a breach, or must have reached an agreement with Govia. Otherwise why would the DfT not enforce that requirement, especially when it likely means Govia have to pay a financial remedy?
But none of what you say would change the basic principle that a ticket routed (say) Thameslink Only is valid on any Govia Thameslink operated service, and therefore people who pay the higher fare have been overcharged.

It doesn't change the fundamentals; GTR appear to be abusing a dominant market position.
 

Tazi Hupefi

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But none of what you say would change the basic principle that a ticket routed (say) Thameslink Only is valid on any Govia Thameslink operated service, and therefore people who pay the higher fare have been overcharged.

It doesn't change the fundamentals; GTR appear to be abusing a dominant market position.
I think you ought to be a tiny bit more cautious in how you present such statements.

I think you meant to say that “In your opinion, GTR appear to be….” Not “GTR appear to be”. Subtle difference.

I think it’s one of those debates which are going to have polarised views on a forum like this, but I’ve set out my stall, that even putting the legalities aside, and any agreements aside, I do not believe GTR is abusing any position of dominance. They may be taking advantage of it for commercial gain, or operational convenience, (which can be perfectly legal), but I cannot see how their behaviour is “abusing their dominant position”.

Truly abusing their dominant position would be removing all unregulated / cheaper fares on routes where no viable competition existed (not just rail), which gives people no real choice other than to pay extortionate fares.

The argument seems to be that because Govia offer a wide range of good value / reasonable fares (with restrictions admittedly but still making the tickets perfectly useable), that this is anti competitive.
 

yorkie

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I think you ought to be a tiny bit more cautious in how you present such statements.

I think you meant to say that “In your opinion, GTR appear to be….” Not “GTR appear to be”. Subtle difference.
It's not just my opinion though!

I'm not surprised you have a different opinion to me on this, as we have a completely different outlook when it comes to railway ticketing matters.

I think it’s one of those debates which are going to have polarised views on a forum like this, but I’ve set out my stall, that even putting the legalities aside, and any agreements aside, I do not believe GTR is abusing any position of dominance. They may be taking advantage of it for commercial gain, or operational convenience, (which can be perfectly legal), but I cannot see how their behaviour is “abusing their dominant position”.
By charging differential fares on the basis of brand, yet the fare which purports to be restricted by brand is legally & contractually not restricted in this manner. This allows GTR to charge excessively to anyone who is unaware the cheaper fare would be valid.

Anyone who is charged a penalty/excess/additional fare who then contests it, has the additional fare refunded (as far as I can determine and in all cases I'm aware of) by the company if they appeal it.

Truly abusing their dominant position would be removing all unregulated / cheaper fares on routes where no viable competition existed (not just rail), which gives people no real choice other than to pay extortionate fares.
There are many examples of abuse of a dominant market position. Now you have revealed you only have a narrow view of this concept, and are clearly unfamiliar with the principles, I don't think there is much point in us debating this matter further.

I didn't know anything about this area of law until a few years ago, and it was a real eye opener for me.

The argument seems to be that because Govia offer a wide range of good value / reasonable fares (with restrictions admittedly but still making the tickets perfectly useable), that this is anti competitive.
That is not the argument at all.
 

Watershed

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The argument seems to be that because Govia offer a wide range of good value / reasonable fares (with restrictions admittedly but still making the tickets perfectly useable), that this is anti competitive.
GTR are likely to be considered to have a dominant market position on most BML flows - particularly so for travel to/from Gatwick Airport. As a result, they lose the right to charge whatever fares they want, wherever they like.

Given these circumstances, they expose themselves to substantial liability when they induce customers pay more to travel on one of their trains branded "Southern" or "Gatwick Express" than one branded "Thameslink". After all, the cheaper "Thameslink only" ticket is just as valid on the former two brands.

The fact that fares may change is irrelevant to the adjudication of the claim. It's hardly a defence to say "as you've taken us to Court, we will stop misleading customers and just start charging everyone more".

And, with respect, I hardly think a firm of solicitors would bring a class action, let alone that they would receive millions in funding for costs, if this were a hopeless claim.
 

ashkeba

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What would be the ideal resolution to this case, from the claimants point of view?
Refunds of all past overcharges, abolition of brand-restricted tickets, fares harmonized at the average?
 

yorkie

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Kilopylae

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...where no viable competition existed (not just rail), which gives people no real choice other than to pay extortionate fares.
GTR are likely to be considered to have a dominant market position on most BML flows - particularly so for travel to/from Gatwick Airport. As a result, they lose the right to charge whatever fares they want, wherever they like.
Watershed's reading of this seems more valid than Tazi's. The "market" is for rail travel on that flow.
 

thedbdiboy

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Given that outside of true open access operators it is already clear that fares and revenue will in future come under GBR, the issue of 'competition' between TOCs is coming to a close. So the legal process here will ultimately declaim on a process that is already effectively dead (notwithstanding any claim for remedies arising from past losses).

Anyone debating whether the TSA will be amended hasn't caught up with the fact that the it won't have a purpose under GBR; it was designed to enable separate companies to manage through ticketing, interavailability and settlement; however, post-Williams-Shapps, the entire process sits within the commercial realm of GBR (as it did in British Rail days). The residual handful of OA requirements and those of devolved authorities will easily be handled through bilateral commercial agreements linked to license obligations to accept GBR fares. To all effects and purposes, the TSA is for any meaningful purpose (finally) dead.
 

35B

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Given that outside of true open access operators it is already clear that fares and revenue will in future come under GBR, the issue of 'competition' between TOCs is coming to a close. So the legal process here will ultimately declaim on a process that is already effectively dead (notwithstanding any claim for remedies arising from past losses).

Anyone debating whether the TSA will be amended hasn't caught up with the fact that the it won't have a purpose under GBR; it was designed to enable separate companies to manage through ticketing, interavailability and settlement; however, post-Williams-Shapps, the entire process sits within the commercial realm of GBR (as it did in British Rail days). The residual handful of OA requirements and those of devolved authorities will easily be handled through bilateral commercial agreements linked to license obligations to accept GBR fares. To all effects and purposes, the TSA is for any meaningful purpose (finally) dead.
GBR doesn’t yet exist, and will still be a multi-company arrangement.
 

thedbdiboy

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GBR doesn’t yet exist, and will still be a multi-company arrangement.
It's not the company structure that is relevant but the commercial arrangements. But even under the current structure the TSA is a contract the DfT has with itself since it directs every party that is a signatory.
 

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The claim has been given class certification despite the usual spurious objections from GTR, allowing it to proceed as planned:
After an application by David Went from Exchange Chambers (led by Charles Hollander QC), the Competition Appeal Tribunal has today handed down judgment certifying opt-out collective proceedings against Govia Thameslink Railway Limited (GTR) and its parent companies.

Mr Vermeer has been removed as a joint representative, leaving Mr Boyle as the sole class representative; the Tribunal found there was effectively no good reason for Mr Vermeer to be appointed as a joint representative as his experience did not really add anything to the case.

The next step will be discovery, leading up to the trial, currently provisionally scheduled for summer 2023.
 

Tallguy

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This case is a clear indication of exactly how broken the fares system is. I for one hope the case is successful and leads to a massive shake up of ticketing and fares. However I won’t hold my breath….
 

yorkie

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This case is a clear indication of exactly how broken the fares system is. I for one hope the case is successful and leads to a massive shake up of ticketing and fares. However I won’t hold my breath….
GTR is the only company engaging in this behaviour, but feel free to create a thread if you'd like to discuss it further :)
 

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One of my hobbies is reading cases on Bailii. Normally that's more for "cases in the news" than it is for matters of law but I happened to see the latest ruling of this pop up - and subsequently discovered there have been a few developments since the last post in this thread. I am not legally trained and am a bit of a skim reader, so the following are my interpretations, with links to source material in chronological order:

14th October 2022: Technical legal argument about the form of trial - do they do it in 3 stages or 2? I'm not fully sure I understand it but it appears to be about how the question of the effects of market dominance would be dealt with - either as a "middle" stage or somewhat split between the liability and the quantum stage. Maybe. Additionally we (or I) learn for the first time the secretary of state for transport is an intervener. Ultimately the court decides a 2 step, 4 week-ish trial to be held in the middle of 2023.

28 November 2022: GTR ordered to pay £250 000 in costs into the court (i.e. not the claimants) for attempting to oppose the class action. This is just a preliminary thing, the total accounting can change later

24 March 2023 Part 1 - not related to this case, but it looks like someone else is launching a different class action lawsuit against GTR!

24 March 2023 Part 2 - unfortunately, the expert in this case has had to unexpectedly pull out for personal reasons, entirely unrelated to the case. This means the case itself is almost certainly going to be put back to 2024

Those with more understanding may be able to summarise these links better.
 

Watershed

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24 March 2023 Part 1 - not related to this case, but it looks like someone else is launching a different class action lawsuit against GTR!
Essentially, the same Class Representative that brought the Boundary Zone claim against SWR and SE is now bringing an identical claim against GTR. The application for a Collective Proceedings Order was successful.

As with the original Boundary Zone claim, there are many more steps that will be required before there is a substantive judgment in this case.

24 March 2023 Part 2 - unfortunately, the expert in this case has had to unexpectedly pull out for personal reasons, entirely unrelated to the case. This means the case itself is almost certainly going to be put back to 2024
The original trial date has been vacated and a new one will be set for 2024. The expert gave no explanation beyond "personal reasons" for their decision to take a 6-month sabbatical during the second half of 2023, and the class representative didn't inform the Tribunal of the significance of the expert's effective withdrawal from the case particularly quickly, which the Tribunal was clearly very unimpressed by.
 

John Palmer

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The class representatives' solicitors informed the Tribunal promptly of their expert's withdrawal, and it was open to the Tribnunal to convene a case management conference to deal with this on its own initiative. What would that have achieved? Since the withdrawing expert occupied a pivotal role in the CR's case, formulating meaningful directions for trial was scarcely going to be possible until it became clear how far his replacement proposed to recommend a different trial blueprint. The CR will have to bear the costs resulting from the expert's withdrawal for reasons apparently having nothing to do with the CR or his lawyers.

Extraordinary that an expert should announce his intention of taking a six month sabbatical with no explanation of why. I appreciate that there may be good reason for his withdrawal, so when a trial participant is going to occupy so vital position in a litigant's case, it may be prudent for such litigant to insure away the risk of that person becoming incapacitated - what if he is hit by a bus the day before he is due to give evidence?
 

yorkie

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Extraordinary that an expert should announce his intention of taking a six month sabbatical with no explanation of why. I appreciate that there may be good reason for his withdrawal, so when a trial participant is going to occupy so vital position in a litigant's case, it may be prudent for such litigant to insure away the risk of that person becoming incapacitated - what if he is hit by a bus the day before he is due to give evidence?
I note the report does state:
...we consider that his consultancy’s failure to make his associate, Ms Mantri, available to the new expert so as to explain the acquired understanding of the team that had assisted Mr Harvey to be most unhelpful...
 

35B

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Essentially, the same Class Representative that brought the Boundary Zone claim against SWR and SE is now bringing an identical claim against GTR. The application for a Collective Proceedings Order was successful.

As with the original Boundary Zone claim, there are many more steps that will be required before there is a substantive judgment in this case.


The original trial date has been vacated and a new one will be set for 2024. The expert gave no explanation beyond "personal reasons" for their decision to take a 6-month sabbatical during the second half of 2023, and the class representative didn't inform the Tribunal of the significance of the expert's effective withdrawal from the case particularly quickly, which the Tribunal was clearly very unimpressed by.
...as they clearly were by the realisation that the grounds for the case might change significantly following the appointment of the new expert, and the attempt of the defendants to argue that this was of no import.

I suspect the outcome of this case, and the treatment of costs, will have a significant impact on this area of law in future.
 

ainsworth74

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Not an update as such but a case management hearing took place a few days ago and the case continue forward at a slow pace. It would appear the Tribunal expect to hold a further case management hearing towards the end of 2024 by which point they expect the Class Representative's expert (the new one, as long time readers will recall the original dropped out at short notice) to have prepare their case for presentation at a full hearing which is now expected to occur in 2025. It would seem that they are keen for this to proceed more quickly if possible but that appears to be the schedule they're now working on.

At least I think I've got the gist of that, it's quite a dry read which I will confess to have only having skimmed. If someone vehemently disagrees that I've missed something crucial feel free to report this post and let me know how much of a legal idiot I am :lol:

9. [...]

(9) Given that we consider the MicroSoft Pro-Sys Test to be satisfied, the question is what needs to be produced by the Class Representative to take these proceedings to trial. We consider that Dr Davis should, in these circumstances, articulate in full the Class Representative’s case, and that he should do so by no later than 31 July 2024. We regard this as a generous date, and ideally the job can be done well before then.

[...]

10. This paves the way for a case management conference on the far side of the 2024 long vacation at which the Defendants will articulate the directions they need for trial, and the Intervener will state their own position. A trial at some point in 2025 should then be possible. We make clear that we expect the Defendants and the Intervener to review the Class Representative’s work over the long vacation and to have considered – and ideally begun work on – their responses.

 
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