National Rail Conditions of Travel 'unlawful'

[All Line Rover]

According to the Which website:

Under the Consumer Rights Act you can claim for consequential losses. This means you can claim for financial losses you have suffered as a result of the failure by the transport service. To make a successful claim you’ll need to demonstrate how your losses are linked to a breach of contract by the service provider. Your first port of call should be to write to the company asking for compensation. You should explain how their service was in breach of their contract with you and how that breach resulted in further losses to you. For example, due to a delay or cancellation you may have missed a connecting journey and had to pay for an alternative service.

At no point does Which refer to a specific provision of the Consumer Rights Act and, having browsed through the latest revision of that statute, I can't see a single mention of any entitlement to claim consequential losses.

On the page linked to above, Which has a "letter generator". If one inserts consequential losses, the letter generated reads:

"The Consumer Rights Act 2015 makes it an implied term of the contract I have with [Virgin Trains / CrossCountry / etc] that the service I receive be provided with reasonable care and skill.

I consider [VT / XC / etc] to be in breach of contract because [insert reasons here].

As you are in breach of contract I am claiming up to the value of [my ticket].

I am also claiming contractual damages for consequential loss. £xxx

I await confirmation that you will provide the remedy set out above within 14 days of the date of this letter."​

That's it! What a bizarre letter. If I happened to have a statutory entitlement to damages for consequential losses, I would refer to the specific section giving me that right. If I had no such entitlement, I could still try to "claim contractual damages for consequential loss", but I would not be aggrieved or surprised if this claim was refused.

If Which is attempting to rely on s 54(6)(7), I would say that it is most proper for train operators to exclude liability for consequential losses in their contracts for travel with passengers. There is no prohibition in s 57 of terms which exclude liability for consequential losses. This is hardly surprising, for such terms are a standard and sound aspect of commercial practice.

Unless there is other legislation (separate to the Consumer Rights Act 2015) which gives rail passengers a legal entitlement to claim damages for consequential losses (and I would be most surprised if there was), it seems that Which is only referring to "consequential losses" in the sense of extra expenditure needed to complete a journey (e.g. taxi fares) and not opportunities lost as a result of a delay. Which need to be much clearer in what they say.

 

[lejog]

How do you know that other industries have not put prices up (gradually maybe) due to cost creep of either/or (a) compensation or (b) additional costs to prevent the compensation claim in the first place or (c) changed or ceased products because (a) and/or (b) render the product uneconomic? Not that this is necessarily bad, but it is bound to have an effect.

I would suggest the extent will depend on how much precise timetables are considered part of the contract, and how much deviation is down to failure of 'reasonable care and skill' . My view is that this is not likely to be very much.

Errm, all other industries have been making allowances in their pricing to cover consequential losses since at least 1854, or possibly earlier. I suggest the effect on prices now is minimal.

While I'm not getting involved in guessing the outcome of the case, I would point out that being consumer law, judges will tend towards a consumer's viewpoint, not a rail industry viewpoint.

 

[infobleep]

What on earth does that mean legally? To me reasonable care and skill is you get to your destination alive. That seems so vague any claim brought under this could be fought indefinitely.

Where does the line sit? Is a TOC cancelling a train to avoid running a crush loaded short form more or less "care and skill" than running a 153 in place of a 3 car 170? Does it change the "care and skill" if that 170 is sat in the depot awaiting the late delivery of a bit of pipe or because it's being cleaned after a fatality?

And where does consequential losses stop? A taxi? Fair enough. A hotel? Again, reasonable. Extra hours of childcare? Yea. Lost earnings? Dodgy. Missed an interview/meeting, maybe you lost a big contact? Dubious at best, waste of time at worst.



Well there is thousands of hours of wasted time right there. What percentage of reserved seats or accommodation is paid for? Is it only the sleeper supplements?



Wave goodbye to catering services then.

No one will benefit from this. Just TOCs and NR will spend more money trying to fight each other for delay attribution and that cost will filter down to the passengers.

Much like simplified rail fares, careful what you wish for.

I thought train companies always provided what rolling stock they could, if it was available and not required elsewhere later, even if it ended up being a carriage that couldn't fit enough people on. Is that not always the case?

 

[All Line Rover]

...being consumer law, judges will tend towards a consumer's viewpoint, not a rail industry viewpoint.

I wouldn't take that as a given. They don't take "a consumer's viewpoint" where to do so would be to ignore sound commercial practice.

They have also taken an, what I would consider to be, even harder line in certain cases concerning unfair terms.

 

[infobleep]

Consequential loss only applies where the supplier has not acted with reasonable care and skill. Events outside the railway's control would not count. Events within the railway's control, such as defective rails, may well do. The TOCs already have these arrangements between themselves and with Network Rail, and they profit handsomely from them, so I don't get what the wibbling about "compensation culture" is all about.

Neil Williams, among others, refers to travel insurance. To an extent yes, but travel insurance doesn't cover for many domestic situations or short stays. And why should the insurance industry have to fork out because of the incompetence of Network Rail or the TOCs?

Talking about Delay Repay is also a red herring, as Delay Repay is- very deliberately- not part of the NRCoT. TOCs May sign up to Delay Repay but that's a commercial decision not a legal one. TOCs who don't sign up, e.g. Grand Central, are merely bound by NRCoT.

Aren't some TOCs obliged to sign up as part of their franchise agreement?

 

[infobleep]

The obligation to mitigate your losses, and act reasonably, is not a new legal issue. The case law on it is hundreds of years old in some cases.

If you allow four hours before your flight and you miss it because a train breaks down or there's a signalling failure caused by defective engineering, then consequential loss will apply to that flight. If you allow ten minutes it won't. And if the delay is due to weather or a fatality then it also won't.

It really isn't that controversial.

I personally think it's perfectly reasonable that fatalities aren't included. I wouldn't include them in delay repay either. The companies on the older compensation scheme, aka South West Trains, don't pay out in such circumstances.

I think it's a good idea this is being clarified. If Which? did contact the stakeholders in advance and put an embargo on it, I'm assure they were not allowed to tell all their staff either, in case it leaked.

I've worked for companies where they have said to us we have seen a road map from a supplier but we cannot tell you more until it happens.

Of course come Monday the TOCs have no excuse for not telling staff, if the staff feel it's something they should be informed about.

 

[yorkie]

Aren't some TOCs obliged to sign up as part of their franchise agreement?

Absolutely, yes. They are, like most things, bound by their franchise commitments. Very few TOCs have implemented full Delay Repay without being forced to.

 

[lejog]

Which was the question I asked in the beginning - who decides?
If Which? get their way, the courts will be clogged up with piffling little claims.

No a clause compliant with the law will have to be inserted into the NRCOT. The courts will only then be bothered if the rail industry fails to comply with that clause.

 

[lejog]

Positively my last post this evening, but I really should point out the "reasonable skill" proviso often quoted in this thread is not the only condition suppliers of services have to meet.

Of particular relevance to train services is that anything that is said or written to the consumer about either the trader or the service is binding. If the consumer bases his decision to buy on what is said or written, this is treated as being as being a term of the contract. So train timetables, promises of new rolling stock, etc can form part of the contract.

The right to "reasonable skill" is an additional right consumers have, and likewise becomes a term of the contract if it is not already included, but TOCs showing "reasonable skill" are by no means absolved of meeting other responsibilities.

 

[thedbdiboy]

Absolutely, yes. They are, like most things, bound by their franchise commitments. Very few TOCs have implemented full Delay Repay without being forced to.

This fundamentally misconstrues the nature of a rail franchise contract - the implication is that the TOC is a wayward entity brought to heel by the fanchise; it isn't, the franchise is a Government contract. Delay Repay goes well beyond what any unregulated transport provider gives you (ever claimed for a delay on a bus?) - the government has decided on behalf of taxpayers to procure what is a very generous compensation scheme in its more recent contracts (one that goes well beyond the CRA in many aspects) so that is what the franchisee delivers.

Whilst it is welcome that these remedies are available I'm not the only one who is a little concerned that there seems to be a mutually escalating contest between Which?, the ORR and government about redress when things go wrong that seems to be distracting from the fact that what many people actually want is for the trains to run reliably - something that is not happening in too many parts of the network. I suspect many GTR passengers would prefer something approaching reliability in place of ever escalating compensation if they had the choice.

 

[Starmill]

I think some people have got their knickers in a real twist over this where they needn't. What Which? want - what the passengers want - is for the service to be delivered wherever it can be to the best it can be.

At the minute, there are a huge number of failures of trains, track and other infrastructure, and staff. If a train is cancelled because there is no driver, how can that possibly be anything other than the company failing to deliver the service reasonably? Once these issues are rare, rather than things that happen every day, there will be no issue - and no further claims from passengers except in the small number of cases where these might occur, then people can be fairly compensated. If a storm shuts down the railway, there will be no extra compensation. There will be no ridiculous million pound bills for lost contracts - and I think it's a bit silly that people are taking that seriously.

Perhaps the position in NRCoT is untenable - but a minor revision to allow for these small number of reasonable claims in small number of cases where there has been a failing by the train company that has caused real loss will not harm anyone, and will ensure the law is being obeyed. Or perhaps some other compromise will be found. In a way its disappointing there hasn't been one already.

Those who dislike the law or think that it ought not to apply to railway companies are naturally free to voice this view in a letter to their Member of Parliament.

 

[Starmill]

(ever claimed for a delay on a bus?)

As it happens, I have actually claimed compensation from Arriva for a bus journey. It was for a delay of around 40 minutes owing to a missed connection. The compensation scheme is 'no quibble' if you were unhappy with any aspect of the service - but the form was a nightmare to fill in. What's more the only compensation available is a free single journey voucher. The voucher was only valid for 3 months and the compensation scheme only applies to a very limited number of their routes - 'Sapphire' branded services mostly. Useful and potentially worth up to about £5 or so or a little more in exceptional cases, but hardly up to the standard of cash compensation up to 100% of your fare as with 'Delay Repay'. And just one single journey voucher likely means paying for a poor value cash single the other way, now doesn't it?


There can be no doubt that rail travel is all for the better for offering generous compensation rights to passengers in case of delays (although of course there are still a handful who do not offer 'Delay Repay' - but they must still offer something. I agree with those who make the point that the compensation is exceptionally generous.

 

[miami]

I personally think it's perfectly reasonable that fatalities aren't included. I wouldn't include them in delay repay either. The companies on the older compensation scheme, aka South West Trains, don't pay out in such circumstances.

However the tocs then took the P. A fatality at Carlisle at 8am meant that the 1400 service to Preston was cancelled, because Virgin couldn't arrange a spare driver in 6 hours, because they cut provisioning to the bone to increase their profit. The people, through their representatives in parliament, got fed up of this type of behaviour and clamped down. Airlines suffered the same fate.

One thing that would be interesting in the road area - on approach to the m6 tool there are signs stating "m6 toll clear". If you use this information to take the road, and you are delayed, do you get your toll back, and do you get to claim consequential losses?

 

[CarlSilva]

At no point does Which refer to a specific provision of the Consumer Rights Act and, having browsed through the latest revision of that statute, I can't see a single mention of any entitlement to claim consequential losses.

This bit here propbably. http://www.legislation.gov.uk/ukpga/2015/15/section/54/enacted

54 Consumer’s rights to enforce terms about services
(7)Those other remedies include any of the following that is open to the consumer in the circumstances—

(a)claiming damages;

 

[lejog]

Indeed AFAIK rights to consequential losses are based on common law and are not specifically mentioned in legislation.

Also Schedule 2, Clause 2 includes the following as a contract term which may be unfair

A term which has the object or effect of inappropriately excluding or limiting the legal rights of the consumer in relation to the trader or another party in the event of total or partial non-performance or inadequate performance by the trader of any of the contractual obligations,

The NRCOT seems to be in breach of this by explicitly excluding consequential losses.

 

[miami]

The NRCOT seems to be in breach of this by explicitly excluding consequential losses.

But the NRCOT states:

This section and section 32 do not affect rights and remedies you would otherwise
have under the Consumer Rights Act 2015, unless the law allows this.

 

[EM2]

At the minute, there are a huge number of failures of trains, track and other infrastructure, and staff. If a train is cancelled because there is no driver, how can that possibly be anything other than the company failing to deliver the service reasonably?

But what is a reasonable contingency for the TOC to have? A number of spare drivers equivalent to the number rostered? A number of spare trains equivalent to the number in use?

 

[HH]

Despite my previous post, I'd be wary of signing a contract with a supplier who flatly refuses any level of consequential loss. As has been posted previously insurance against such losses is available at a modest price for companies who have a track record of delivering successfully.

That wasn't what I was talking about. What I was referring to is the inability of railway companies to pass insurance claims onto other rail companies, even if it were their fault. So, if NR track buckles in the summer, causing huge delays to trains which involved consequential loss claims against the TOC, the TOC would not be able to pass these on to NR.

 

[HH]

Consequential loss only applies where the supplier has not acted with reasonable care and skill. Events outside the railway's control would not count. Events within the railway's control, such as defective rails, may well do. The TOCs already have these arrangements between themselves and with Network Rail, and they profit handsomely from them, so I don't get what the wibbling about "compensation culture" is all about.

The TOCs are compensated by Schedule 8 for the loss of revenue arising from delays. They are NOT compensated for claims by passengers. They used to be able to claim a share of passenger compensation from Railtrack, but that disappeared - it was effectively a money-go-round because they had to pay RT a fixed charge called Schedule 8 ACS to compensate RT for having to make these payments!

 

[Tetchytyke]

Everyone will argue that they took reasonable care and skill, but my car is still knackered.
So where do I claim my consequential losses?

This sort of scenario is already covered by other consumer protection legislation. If the garage sell you something and it breaks before it should have then they are on the hook for it, regardless of whether they installed it in good faith or not. They may or may not have comeback against their suppliers, but that's not your concern.

And if it was over £100 and you paid for it on your credit card, your credit card provider is also jointly and severally liable for it, even though they had no influence or say in the matter at all.

Now suppliers and credit card companies don't like this, of course they don't, and many suppliers will attempt to direct you back to the manufacturer for repairs to faults. But that's not what the law says should happen. If a product isn't fit for purpose it doesn't matter why, the supplier is on the hook for repair, replacement or refund.

 

[Tetchytyke]

The TOCs are compensated by Schedule 8 for the loss of revenue arising from delays. They are NOT compensated for claims by passengers.

That's arguing about semantics, they receive compensation from Network Rail or the other TOCs for delays. Part of that compensation is for lost revenue and part of it is for consequential losses- such as passenger Delay Repay claims or additional staff costs- that arise from the delays.

And we know that the TOCs profit handsomely from this compensation, the TSSA reckon they profit to the tune of £140m a year.

ETA: Consequential losses have to be reasonable and directly relevant to what happened. A claim for £1m because you missed an important trade meeting is highly unlikely to be successful- even if you were late to the meeting due to the train, you'd need to show that it was certain you'd get the money and that you'd mitigated your losses. A trade deal that fell through because you were an hour late for a meeting would be unlikely to meet this; if the deal was that certain, a teleconference or a re-arranged meeting should have still allowed the deal to complete. But if I left four hours for my flight and I missed it because of a signalling failure related to a software fault, then it'd be much easier to show that the airline ticket change fee was a reasonable consequential loss.

 

[HH]

... Virgin couldn't arrange a spare driver in 6 hours, because they cut provisioning to the bone to increase their profit.

You are kidding me, right? Virgin have a huge spare ratio. If every TOC had the same level of cover then there would be thousands more drivers required.

 

[HH]

That's arguing about semantics, they receive compensation from Network Rail or the other TOCs for delays. Part of that compensation is for lost revenue and part of it is for consequential losses- such as passenger Delay Repay claims or additional staff costs- that arise from the delays.

And we know that the TOCs profit handsomely from this compensation, the TSSA reckon they profit to the tune of £140m a year.

No, it's not arguing about semantics. It's arguing about facts - and you have yours wrong. They only get compensation from Network Rail and that compensation is only in relation to the effect on their earnings.

Moreover NR do not feel that TOCs are over-compensated; I was slightly surprised by this, but it is the case. TSSA don't have a clue.

 

[Tetchytyke]

No, it's not arguing about semantics. It's arguing about facts - and you have yours wrong. They only get compensation from Network Rail and that compensation is only in relation to the effect on their earnings.

The compensation is a lump sum based on the delay, and is in final settlement for the delay, based on revenue as well as nebulous considerations like "elasticity demand", whatever that is. Given that Delay Repay claims are directly linked to the ticket cost, it's fair to say that the Schedule 8 payments do cover this. A Delay Repay claim for a given train is never going to be in excess of the revenue from that train, is it?

Of course I have no way of knowing what the actual payments are and for what, because the ORR choose to redact this information. We only publicly know what the TSSA have said, really. Whether that's correct or unfair, who knows, the ORR and the RDG refuse to tell us.

 

[All Line Rover]

The NRCOT seems to be in breach of this by explicitly excluding consequential losses.

It isn't in breach. A term excluding liability for consequential losses is not inappropriate.

Contractual terms, for most purposes including that under consideration, take precedence over common law rules.

 

[sheff1]

Delay Repay goes well beyond what any unregulated transport provider gives you (ever claimed for a delay on a bus?)

Yes and I was refunded the cost of the taxi that I was forced to use.

 

[HH]

The compensation is a lump sum based on the delay, and is in final settlement for the delay, based on revenue as well as nebulous considerations like "elasticity demand", whatever that is. Given that Delay Repay claims are directly linked to the ticket cost, it's fair to say that the Schedule 8 payments do cover this. A Delay Repay claim for a given train is never going to be in excess of the revenue from that train, is it?

Of course I have no way of knowing what the actual payments are and for what, because the ORR choose to redact this information. We only publicly know what the TSSA have said, really. Whether that's correct or unfair, who knows, the ORR and the RDG refuse to tell us.

It's not fair to say that normal Sch8 payments cover Delay Repay, because they don't. That is a fact. Schedule 8 is supposed to cover the immediate loss of revenue and the long term loss that is caused by unreliable services. The ORR sets Network Rail an Average Lateness Benchmark. If it doesn't go above that benchmark for the period it pays nothing (and it goes below the TOC pays NR a sum for its "good" performance), so the fact that one train is delayed does not mean that the TOC got any compensation. You really shouldn't comment on this complex matter, because you don't understand it at all.

Delay Repay claims could theoretically exceed the revenue from a given train as for delays of over 2 hours you get back the price of a return ticket, but this is just a red herring.

 

[lejog]

Consequential loss only applies where the supplier has not acted with reasonable care and skill.

Aah I see where a lot of confusion in this thread comes from. This is not true, a supplier has to act with reasonable care and skill, but that does not absolve them from also having to comply with other legal requirements.

 

[lejog]

But what is a reasonable contingency for the TOC to have? A number of spare drivers equivalent to the number rostered? A number of spare trains equivalent to the number in use?

Thats purely a commercial decision by the TOC, managers do have to make decisions balancing often conflicting requirements, its part of their job. Other industries have only been making similar decisions about their business since the 19th century.

 

[lejog]

It isn't in breach. A term excluding liability for consequential losses is not inappropriate.

Well, we'll see when the case reaches court whether this is true. Which's position is stated in post 1.

The current terms of the industry-wide National Rail Conditions of Travel undermine passenger rights by attempting to limit train companies’ liability, and they exploit this to ensure that consumers don’t claim for consequential losses.

This attempt to limit liability is not in line with consumer law. Passengers have the right to claim for consequential losses, and train companies are required to make that clear and not suggest otherwise.