Fermiboson
Member
There is something to be said about the use of duress in obtaining an out of court settlement, which may fall foul of the common law principle of lawful act duress, in which a party entering into a settlement (or more generally contract) utilises its superior position to make illegitimate (but legal) threats, leaving the other party with no reasonable alternative than to waive legitimate rights. The keystone case in the commercial world is PIAC v Times Travel UK Ltd (Appellant) [2021], where a litmus test for the principle was considered: exploiting the fact that a party had knowledge of some criminal matter to obtain an advantage in negotiations, or using unconscionable methods to weaken the position of the other party, hence causing the counterparty to enter into an unconscionable agreement. The argument, I would imagine, would be that the TOC used the knowledge of the one instance of travelling without a valid ticket to obtain a much higher payout than could be defended in court, and deliberately refused to make investigations that could reveal evidence advantageous to the counterparty. This settlement offer is also made in bad faith as any reasonable person would conclude given the emails and third party retailer evidence etc. that such a claim could not be defended in court.
A slightly closer case, Al Saif Group v. Robert Thomas Cable [2022], ruled that the use of threats of criminal prosecution alone did not amount to an act of duress and did not invalidate out of court settlements already signed. In the case, it was ruled that the threat of prosecution must be one where “undue process” was threatened. It is not immediately clear how this would apply in our context (is the refusal to accept clear and convincing evidentiary standard regarding the railcard undue process? Was any threat made to prosecute under a more severe charge such as fraud which the TOC knew could not stand?), but it is abundantly clear that lawful act duress is a very high bar. The court goes on to find that the threat of prosecution must have been “particularly terrifying or oppressive”, which does not help.
Ultimately, none of this is likely to ever matter unless someone were to try to bring a class action lawsuit of some sort, which in itself is already hard enough never mind the high burdens of proof of all the possible avenues of misconduct. Will also note that the historically much more successful avenue of misrepresentation in out of court settlements likely does not apply here, given that the TOC did not lie about anything - they never claimed the railcard records were not in their possession, they were entitled to pursue a prosecution under the stated terms, OP’s friend did actually use an invalid railcard once, etc.
Disclaimer: Not a lawyer, nor a law student. Talking out of my ass (with consultation from law students and some books).
However, the counterargument would go (as it did somewhat similarly, and successfully, in the named case) that the TOC genuinely believed the amounts were due and were not convinced beyond their own evidentiary standard that a valid railcard was indeed present. It would be rather hard to prove the intention of bad faith.
A slightly closer case, Al Saif Group v. Robert Thomas Cable [2022], ruled that the use of threats of criminal prosecution alone did not amount to an act of duress and did not invalidate out of court settlements already signed. In the case, it was ruled that the threat of prosecution must be one where “undue process” was threatened. It is not immediately clear how this would apply in our context (is the refusal to accept clear and convincing evidentiary standard regarding the railcard undue process? Was any threat made to prosecute under a more severe charge such as fraud which the TOC knew could not stand?), but it is abundantly clear that lawful act duress is a very high bar. The court goes on to find that the threat of prosecution must have been “particularly terrifying or oppressive”, which does not help.
Ultimately, none of this is likely to ever matter unless someone were to try to bring a class action lawsuit of some sort, which in itself is already hard enough never mind the high burdens of proof of all the possible avenues of misconduct. Will also note that the historically much more successful avenue of misrepresentation in out of court settlements likely does not apply here, given that the TOC did not lie about anything - they never claimed the railcard records were not in their possession, they were entitled to pursue a prosecution under the stated terms, OP’s friend did actually use an invalid railcard once, etc.
Disclaimer: Not a lawyer, nor a law student. Talking out of my ass (with consultation from law students and some books).
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