Train passengers’ unclaimed compensation helps fund £3.8 million boost for legal charity

Millions awarded to Access to Justice Foundation after low passenger uptake of £25 million Stagecoach settlement.

The Competition Appeal Tribunal has said the effort to compensate 1.4 million South Western train passengers “cannot be considered a success overall,” after just 7,290 valid claims were made.

Stagecoach was one of the train companies accused by consumer campaigner Justin Gutmann of failing to make “boundary fares” – cheaper tickets for Transport for London (TfL) Travelcard holders travelling beyond their zones – sufficiently available or well publicised.

The Tribunal has awarded £3.8 million – around 15% of the total fund – to the Access to Justice Foundation, which will use the money to support legal advice and representation for people who might otherwise be unable to afford it.

Gutmann told the Tribunal he was disappointed by the low response but pointed to several likely explanations. The settlement was the first of its kind to reach the distribution stage, meaning passengers were unfamiliar with the process and may have been reluctant to share bank details online – particularly given widespread warnings about financial scams.

The claims also related to journeys made more than eight years ago, when Stagecoach last operated the South Western franchise, making it harder for people to recall details or provide the confirmation needed to submit a claim.

Consumer campaigner, Justin Gutmann, told Consumer Voice:

“The outcome shows why consumer awareness and participation in collective actions really matters. This was the first settlement of its kind, as such class members were somewhat unfamiliar with the process.”

“Although I would have wished for more class members to come forward and claim, almost £4 million went to Access to Justice Foundation. I think that is a fair distribution. I hope this outcome will encourage consumers to come forward and claim their share of any future damages or settlements.”

The Tribunal concluded that while this particular settlement was not a success overall, the experience offers important lessons for how future consumer redress schemes might be designed. It said that at key stages in the process (including when deciding whether to approve a claim and before approving a settlement): “More work in the future needs to be done on likely take-up of settlement amounts by class members and how any damages may be distributed.”

The Tribunal also warned that collective actions must not end up benefiting funders, insurers or lawyers more than consumers.

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What happened in the Stagecoach boundary fares case?

Between October 2015 and August 2017, Stagecoach South Western Trains was accused of failing to sell cheaper “boundary fares” to passengers who already held Transport for London (TfL) Travelcards.

Boundary fares allow passengers to pay only for the part of their journey beyond their Travelcard zones. Instead, many commuters were said to have been charged the full fare from central London, leading to years of potential overcharging on busy routes to Reading, Woking, Guildford, Portsmouth, Southampton, Bournemouth, Salisbury and Exeter.

Consumer campaigner Justin Gutmann, who led the wider boundary fares claim, brought the case on behalf of millions of passengers. He argued that Stagecoach had “systematically disadvantaged” travellers by failing to promote or sell these cheaper ticket options. Last month, the Competition Appeal Tribunal dismissed the broader claim that three train companies abused their dominant market position to overcharge passengers.

How the settlement worked, and why so few passengers claimed

In April 2024, Stagecoach agreed to a £25 million settlement without any admission of liability. Of this, around £2 million was set aside for passengers to claim up to £30 each without providing proof of travel – they simply had to sign a declaration confirming they had made the journeys.

Despite the relative simplicity of this first stage of the claims process, the response from commuters was low. Only £216,485 was ultimately paid out, with the average claim worth £28.

Part of the challenge was identifying and reaching passengers who had travelled on South Western Trains during Stagecoach’s franchise period.

Gutmann told the Tribunal that the disappointing take-up came “despite considerable efforts to improve the process and publicise the settlement.” Those efforts included re-launching the claims website with a more user-friendly design, removing proof-of-residency requirements, and running an extensive advertising campaign on the London Underground.

Even with £450,000 allocated to distribution and media costs, only 7,290 valid claims were submitted.

Unclaimed train refunds fund £4 million justice boost

On its decision to award £3.8 million to the Access to Justice Foundation, The Tribunal concluded: “This will go some way towards mitigating the extremely disappointing distribution rates achieved in this case, which could make a huge difference in facilitating access to justice for the needy and vulnerable.”

The Access to Justice Foundation is a national charity that raises funds and awards grants to organisations providing free legal help to people who can’t afford it – covering issues such as housing, debt, employment and family law. It is also the designated charity for distributing unclaimed damages from collective actions. For the foundation, the Stagecoach outcome represents the largest single award of unclaimed settlement funds it has ever received.

Clare Carter, CEO of the Access to Justice Foundation, said: 

“More than ever, our funded partners are telling us that there’s rising demand for free legal advice. These funds will be distributed to organisations supporting some of the most vulnerable people in our society. We’re immensely grateful to all stakeholders and to the Tribunal for recognising the value of redistributing this money through the Foundation to support access to justice for the UK public.”

While the £3.8 million award will fund legal advice and representation for people who might otherwise be unable to afford it, the case also highlights a wider concern: consumers are still missing out on money that’s rightfully theirs.

Fair compensation is a core consumer right, but people can only benefit from it when they know what they’re entitled to and understand how to claim it. With simpler processes and better public awareness, collective legal actions are powerful tools; not just for holding companies to account, but for ensuring real redress reaches those affected.

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