European Court requires rail passenger compensation for delays

Simon Coppen and Ann Metherall explore the interpretation of the European right to rail passenger compensation.

02 October 2013

European Union Regulations require passenger compensation to be paid by train operators where a delay of over one hour occurs (and in other circumstances). Although a UK Government derogation means that those Regulations do not presently apply to UK domestic services, delay compensation is widely paid by the franchised operators under the National Conditions of Carriage and under operator specific passenger charter arrangements. The interpretation of the European right to compensation is therefore of some relevance to operational practices in the UK.

In those member states which have not applied a derogation (which is most of them), some operators have sought to exclude a liability to make a “delay repay” payment under the Regulations where the cause of the delay is beyond their control (“Force Majeure” in legal terms). Seeking to apply this exclusion to the delay/repay compensation rights under the Regulations has just been declared illegal by the European Court in relation to an Austrian operator.

The implications are clear. Where the European regulations apply the passenger is entitled to the specified minimum delay compensation whenever there is a delay and should not have to consider why the delay occurred. In some respects this makes operators a guarantor or insurer for passengers’ experiences. This is a cost to be factored into business models and taken into account, whether in levels of fares, performance regime compensation arrangements with infrastructure managers or financial arrangements with their contracting authorities.

The approach is part of a changing perspective towards consumer rights and against a more business-focused economic analysis of the apportionment of risk implicit in the transaction for the purchase of a railway ticket. Operators should be prepared for further extensions of this trend. In the UK, there is a mix of approaches to force majeure and the prospects of a requirement for a move to a more consumer-focused approach should not be ruled out.

Simon Coppen and Ann Metherall are partners in Burges Salmon’s specialist Rail team.

Key contact

Simon Coppen

Simon Coppen Partner

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