/ Travel & Leisure

Tim Loughton MP: is it time to overhaul the rail compensation process?

delayed passengers at train station

When your train is cancelled or delayed do you always claim? Or are you put off by the process? Guest Tim Loughton MP explains why he thinks the current system doesn’t work and passengers deserve better.

There are two types of compensation operating on our train network. And neither of them seem to work.

Compensation systems

The first is what I consider to be the Kafkaesque compensation arrangements between train operating companies (TOCs) and Network Rail, such that the former is compensated by the latter for poor performance as a result of infrastructure problems.

Extraordinarily, the train companies aren’t required to automatically pass on the compensation they receive in this way to the passengers who actually suffer the inconvenience and loss.

The Social Market Foundation calculated last year that the train operators raised £107m from Network Rail for delays, while passengers received just £26m of that.

The second is that directly paid out by the train operators to the passenger when they are liable for delays and cancellations caused by staffing problems, rolling stock breakdown and so forth.

The problem is that it depends specifically on passengers lodging a claim, which can be very bureaucratic. The take-up rate for claims is very low.

While recent events on Southern have changed that a fair bit, it comes from a low base. ​In 2014, the Office of Rail and Road (ORR) calculated that only 11% of passengers always or usually claim compensation.

Subsequently, that has increased to around 35%, but it is still a minority. So passengers don’t claim, and the train operators benefit.

Added to that, all train operators have different schemes and methods of compensating, and there is no industry benchmark. That is hardly an incentive to run an efficient service.

Time to overhaul the system

So, I proposed legislation in Parliament to overhaul the compensation system and create a much tougher financial impact on TOCs, and a fairer and easier way of compensating passengers.

Every time a train is late, cancelled or overruns a station, a penalty fine will be paid into a central pot independent of the train operator and before passengers have to claim.

Passengers would then be able to claim directly from that pot, but in a much more straightforward way.

Advances in technology have rendered the existing compensation arrangements for passengers bureaucratic and unwieldy. Moves have been made to introduce more technology that should simplify the process and deliver compensation.

The power should be with the customer to claim rather than with the TOCs to give out, which I am afraid is how the current situation is perceived. Particularly when we hear from consumer groups, such as Which?, that TOCs aren’t providing enough information on passengers’ rights as set out in the Consumer Rights Act.

Technology exists to allow passengers to download an app, track arrival at stations, automatically lodge a compensation claim where appropriate and then get compensation paid directly into a bank account, all without any paperwork having to be lodged.

By automating the claims process, it will also reduce administration charges for the train operators.

If we can shift this part of the train network puzzle toward delivering for the customer perhaps it will spread to the rest of the sector, which for too long has been operating in favour of the TOCs.

This is a guest contribution by Tim Loughton MP. All views expressed here are Tim’s own and not necessarily those shared by Which?

Have you tried claiming for a train delay or cancellation? How simple did you find the process?


“all without any paperwork having to be lodged”

But you still have to prove you were on the train you are claiming for, and that you had a ticket. Fine if you’re on booked trains or use a smartcard. Otherwise, and that includes the vast majority of trips, you have to send your ticket in, or a scan of it. Which train you were on is taken on trust. You can easily claim for a train you weren’t on. Fraud can and does occur, and I don’t see how an app can prevent that.

The basic problem with compensation for infrastructure delays is that Network Rail is penalised for the number of ‘delay minutes’ attributed to their faults, but this has no connexion to the numbers of passengers that actually suffered a delay and claim any compensation. The train operating companies [TOC’s] are therefore receiving much more in NR’s delay compensation than they are having to pay out. The surplus should be returned to Network Rail and Tim Loughton’s proposal of a central compensation pot would make that easier to achieve. There is a considerable ‘delay minutes attribution’ bureaucracy within the railways structure where the TOC’s and NR negotiate and argue over who caused what to whom and how long it lasted; anything that takes some of that cost and parasitic activity out of the system would be a good thing too.

What we don’t want is a process that takes even more money away from Network Rail than is justified by issuing automatic compensation to everyone on a delayed train whether they want it or not. People just going from one station to the next might be slightly delayed but not especially inconvenienced so will probably not make a claim. There are very few products or services that are 100% perfect and, up to a point, I am prepared to accept and not claim for moderate disruption as part of the experience. It’s the same on the roads; the wind can blow a tree down but you can’t claim for it if it causes delay. If people don’t build in some contingency for their journey plans then they are not being realistic. If one has an important appointment then it is prudent to set off earlier than otherwise.

It might be argued that my approach is unfair on commuters who suffer problems day after day and deserve compensation. I feel that to some extent this is reflected in season ticket prices which are very cheap compared with normal fares. Commuter services are an inefficient use of track and trains for two brief periods a day and to a large extent it is the overwhelming demand for commuter travel that causes many of the delays in the first place.

P.S. Nice picture of the concourse at London Liverpool Street station, taken from the central overhead Departures indicator, possibly on a delay day, showing everyone looking anxiously at the screens to see when their train will go and from which platform. Mrs W and I can occasionally be found on the seats under the small direction sign in the middle of the picture looking in completely the wrong direction and waiting for the first off-peak return train to Norwich. I notice the distinct absence of city suits and ties nowadays. It was bowler hats and rolled umbrellas when my father went there every day in the 1950’s.

Tony Harvey says:
1 April 2017

I was delayed for about two hours travelling from Dover to Stratford late last December. A very friendly and helpful on board manager handed me a claim form and advised that I could also claim online if I preferred. I chose to use the physical form. The first thing I noticed was, having duly enclosed the ticket and folded the form in the manner described to take advantage of the pre-glued edges, that the ticket could easily fall out of the non-glued sides.
“Clever of them” I thought, and reached for the selotape. It is now April fool’s day and I still have received neither compensation nor acknowledgement!

I travel regularly between Harrogate and London. Sometimes the train is delayed and I arrive late. If the delay and the cost of the ticket warrants it. I fill in an online form accompany it with a scan of my ticket(s) and submit it. I receive an immediate acknowledgement and a couple of weeks or more later a cheque for the amount claimed. I think this is something Virgin East Coast has got right!

Ian Sanderson says:
1 April 2017

When I came back from York to London on Sunday 19th March, there was a lineside fire in the Darlington area delaying trains from Scotland (i.e. fast trains York to London) by up to an hour and a quarter. In the event my booked train was 58 minutes late at Kings Cross. The train conductor gave info on claiming by internet for delays over 30 mins over the tannoy. I found the form on the Virgin web site, scanned my ticket, filled the form and submitted my form within 2 days. Got an immediate automated reply and two days later an personalised email saying they would pay half my fare into my bank account within 14 working days, which they did.
(Virgin East Coast)

Karen says:
1 April 2017

We’ve had to claim a couple of times for travel on the Leeds-London route and had no issues. I do vaguely remember receiving vouchers as part of a claim a few years ago, but when I explained these were no good they eventually settled in cash – Virgin do seem to have got this compensation scheme right. With smartphones making it easier to photograph tickets and receipts rather than needing to scan or photocopy them I would imagine the majority of people will find the Virgin Rail scheme fairly user friendly if documents are needed as evidence.

Anneliese Fothergill says:
2 April 2017

I have claimed for delays on the virgin east coast website. Process is easy and you receive an email acknowledge with payment to follow. Big thumbs up to virgin.