Stagecoach agrees £25m settlement in train compensation lawsuit

A settlement agreement that could compensate millions of rail passengers awaits final approval from competition court

Justin Gutmann is representing 2.9 million rail passengers in his claim to compensate Southeastern and South Western customers who he says paid twice when travelling in London.

Stagecoach is one of the train companies Gutmann, a consumer rights campaigner and former Citizens Advice executive, has accused of overcharging customers in his £93 million compensation lawsuit. 

The £25 million settlement agreed by Gutmann and Stagecoach now awaits court approval at a hearing that will take place on 29 April. 

If approved, this will be the biggest UK settlement to be reached since the Consumer Rights Act 2015 made it possible to hold big companies to account for abusing their dominant position without consumers having to foot the bill for legal action. 

Rail passengers paying double

Stagecoach South Western Trains – along with First MTR South Western Trains and Southeastern Railway – has been accused of making customers pay double by not making ‘boundary fares’ easily available. 

Boundary fares allow passengers who own a Travelcard to get discounts on tickets to take them from the boundary of their travelcard to their final destination. For example, if you own a zone 1-4 Travelcard but need to travel between Waterloo and Reading, you should be able to buy a fare from the edge of zone 4. 

Gutmann says the cheaper fares are not easily available online and rarely offered at a ticket office. 

The train companies are said to have breached UK competition laws by charging Travelcard holders twice when travelling on certain routes. 

Gutmann is also claiming £73.3 million in compensation from Govia Thameslink Railway (GTR) – the company who runs Great Northern, Southern, Gatwick Express and Thameslink train lines. Govia is accused of overcharging 3.2 million rail customers in the same way. 

Who is eligible to claim compensation?

The proposed settlement relates only to Stagecoach South Western Trains. Stagecoach was the train company that operated South Western trains until August 2017.

If the settlement is approved by the court, affected customers who travelled at any point between 1 October 2015 and 20 August 2017 could be eligible to claim compensation.

You could be eligible for compensation if you owned a TfL Travelcard during this period and bought a rail fare from a station within the zones of your Travelcard to a destination outside the zones. 

We’ll let you know more about the process for claiming compensation once agreed.

Competition court approval

The Competition Appeal Tribunal must first approve the settlement before any compensation can be claimed. 

This hearing will take place on 29 April where Gutmann must prove to the court why he thinks the settlement is ‘just and reasonable.’

Stagecoach has agreed to the settlement without any admission of liability or fault. The trial against other South Western, Southeastern and Govia Thameslink train companies will begin on 17 June 2024.