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.
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?