Judgment (Stakeholder Entitlement)

The Class Representative (“CR”) and Stagecoach South Western Trains Limited (“SSWT”) (together, the “Settling Parties”) reached a settlement in principle and finalised the terms of their proposed settlement agreement on 27 March 2024 (the “Proposed Collective Settlement”). The CR and SSWT made a joint application to the Tribunal pursuant to Rule 94 of the Competition Appeal Tribunal Rules 2015, for a collective settlement approval order (“CSAO”) in respect of the Proposed Collective Settlement. The Tribunal considered the Proposed Collective Settlement at a hearing on 29 April 2024. In advance of and during the hearing of the settlement hearing, the Tribunal expressed concerns about the proposed settlement and whether its terms were just and reasonable. The Settling Parties agreed upon a revised settlement in principle and finalised the terms of their revised proposed settlement agreement on 30 April 2024 as amended by a side letter dated 3 May 2024. In its Judgment of 10 May 2024, the Tribunal held that the terms of the Settling Parties’ modified proposed settlement were just and reasonable.

On 10 May 2024, the Tribunal made a CSAO. The CSAO was made in the context of collective proceedings combining standalone claims under section 47A of the Competition Act 1998 (the “CA 1998”) for damages for alleged losses caused by the Defendants’ alleged abuse of an alleged dominant position in the relevant passenger rail service market in breach of section 18 of the CA 1998. It was claimed that SSWT (along with the Non-Settling Defendant, First MTR South Western Trains Limited) did not make so-called ‘boundary fares’ or ‘extension tickets’ sufficiently available for purchase for travel on its services and/or failed to use its best endeavours to ensure that there was a general awareness among its customers of boundary fares, so as to enable customers to buy an appropriate fare in order to avoid being charged twice for part of a journey. This is alleged to have resulted in class members being double charged for part of the service provided to them.

In the CSAO the Tribunal approved the settlement agreed between the CR and SSWT, as set out in the Revised Settlement Agreement dated 30 April 2024, and amended on 3 May 2025 (the “Settlement Agreement”). By that agreement, SSWT agreed to make available up to £25 million in damages for Represented Persons, as defined in the Settlement Agreement, allocated to three “Pots” with distinct evidential requirements. The Settling Parties also agreed that SSWT would pay the CR £4.75 million in Ringfenced Costs in respect of his costs, fees and disbursements incurred in the proceedings against SSWT, and a further £750,000 towards the costs of distribution (the “Distribution Costs”). In addition, to the extent that the Notified Damages Sum (i.e. the total amount claimed by class members) was less than £10.2 million (the “Non-Ringfenced Costs Limit”), the CSAO and the Settlement Agreement provided for the CR to apply to the Tribunal for an order to allocate all or part of any undistributed damages (up to the Non-Ringfenced Costs Limit) towards his costs, fees, and disbursements.

The CR has recovered £6,546,968 in costs of which he considers £5,848,96 relates to SSWT. This has already been paid to the CR’s funder, Woodsford Group Limited (“Woodsford”).

On 2 May 2025, the CR made an application, pursuant to the CSAO and Settlement Agreement, for an order for payment of Non-Ringfenced Costs corresponding to the total of his costs, fees and disbursements incurred in his action against SSWT, minus the costs recovered from SSWT to date, or alternatively, for the maximum available (the “Stakeholder Entitlement Application”).

In total, only 7,290 claims were validly submitted by class members, and the total value of those claims is £216,485. A maximum of £9,983,515 was available as Non-Ringfenced Costs, being £10.2 million less the Notified Damages Sum of £216,485.

The Tribunal explained that this case cannot was not a success as the level of uptake by the class of the settlement has been extremely disappointing. The CR has incurred costs of £18,788,166 and only 7,290 valid claims were made by class members, amounting to £216,724.91. This level of uptake fell significantly short of the hoped for 10% to 20% of class members, which on the CR’s estimate of the class size would have amounted to c.140,000 to 280,000 claims. At the CSAO application hearing, the Tribunal expressed scepticism at whether even a 10% uptake would be achieved.

Payment to charity

Whilst the Settlement Agreement did not provide for the Payment to Charity, it was agreed by the CR, CL, Hausfeld, the CR’s Counsel, Woodsford and the ATE Insurers prior to the Stakeholder Entitlement Hearing that the Access to Justice Foundation should receive a payment of £4 million, less the amount of distributed to class members (£216,725). At the Stakeholder Entitlement Hearing Counsel for SSWT confirmed that SSWT was content with the payment to charity. The Tribunal was of the clear view that it is sensible and just, in the circumstances of this case and the disappointingly low level of uptake by class members, that the stakeholders had agreed that the payment to charity should be made.

Remainder of the Non-Ringfenced Costs

Once the payment to charity has been deducted, the sum remaining is £6.2 million. This figure could not possibly satisfy all stakeholder claims and so the Tribunal had to look back and decide what is fair and reasonable bearing in mind the claims made, the sum available and the overall lack of success in these proceedings in terms of outcome for class members.

The Tribunal’s supervisory jurisdiction

The Tribunal, citing the recent judgment of the Court of Appeal in Justin Gutmann v Apple Inc and others [2025] EWCA Civ 459, explained that at the end of the proceedings it must determine costs, fees and disbursements fairly and proportionately and in accordance with the principles of justice.

The Tribunal explained further that it must ensure that collective settlements and distribution plans are fair and reasonable for class members, but the Tribunal must also consider and balance the interests of the other stakeholders and ensure that the collective actions regime operates effectively as a whole.

In the Tribunal’s view, both the contractual documents (Revised Deed of Priority and the LFA) expressly conferred power on the Tribunal to intervene in this case and ensure that the costs, fees and disbursements claimed by all stakeholders are determined fairly and proportionately and in accordance with the principles of justice. Accordingly, the Tribunal explained that its task was to strike the right balance between all the interests involved and reach an outcome that is fair to all stakeholders.

Apportionment of Non-Ringfenced Costs

In the circumstances of this case, the Tribunal considered that it was reasonable and proportionate for the following to be paid out of the Non-Ringfenced Costs:

1. £1.29 million to be paid to CR’s funder, Wooodsford.
    
2. £0.43 million to be paid to the ATE Insurers.
    
3. £4.48 million to be paid to legal stakeholders (solicitors and counsel).