Today, the Court of Appeal has dismissed the appeals brought by the train operating companies responsible for the South Eastern and South Western rail franchises (the “TOCs”) against the CAT’s judgment in Gutmann v First MTR South Western Trains Limited and Ors  CAT 31.
In its judgment, the CAT certified two applications for opt-out collective proceedings against the TOCs in relation to alleged abuses of their dominant positions in connection with the sale of “Boundary Fares”, a type of extension ticket for use in conjunction with a TfL Travelcard.
The class representative, Mr Justin Gutmann, alleges that the TOCs abused their dominant position by failing to make Boundary Fares sufficiently available, or to use their best endeavours to ensure a general awareness among their customers of Boundary Fares, with the result that many Travelcard holders paid twice for part of their rail journeys. The class consists of an estimated 3 million London rail passengers. The claims have an estimated total value of £93 million across the two claims.
The TOCs had appealed the CAT’s judgment principally on the basis that many and varied individual issues of causation and therefore liability made the claims unsuitable for inclusion in collective proceedings. They argued that the CAT’s approach of allowing issues of liability to be considered in aggregate undermined the TOCs’ right of defence. Further grounds of appeal concerned the level of scrutiny the CAT should apply to the expert methodology (and the test in Pro-Sys v Microsoft), the CAT’s assessment of the costs and benefits of continuing the claims, and a rejected application for summary dismissal.
In an important judgment for the development of the collective proceedings regime, the Court of Appeal rejected the TOCs’ appeals. It held that:
A copy of the judgment can be found here.
Philip Moser QC, Stefan Kuppen and Alexandra Littlewood (instructed by Hausfeld & Co LLP and Charles Lyndon Ltd) represent Mr Gutmann.
Fiona Banks (instructed by Slaughter and May) represents First MTR South Western Trains Limited. Tim Ward QC and James Bourke represented First MTR before the CAT.
Paul Harris QC, Anneliese Blackwood, Michael Armitage and Clíodhna Kelleher (instructed by Freshfields Bruckhaus Deringer LLP) represent London & South Eastern Railway Limited.