Claiming "incidental" expenses back from the railway after their scheduling decisions

Tetchytyke said:

Hmm.

That can be said to apply in situations where a supplier isn't aware that time is of the essence and, therefore, couldn't reasonably be expected to know that a short delay to delivery of the contract would cause serious detriment. Most people can normally wait an extra couple of days for a parcel to arrive. It's why you need to tell retailers if time is of the essence.

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Indeed it is. You can also tell a train ticket seller before buying your ticket that you're getting a train to pick up your son from school and will incur a cost of £10. In the unlikely event the ticket seller accepts this stipulation, it would then form part of the contract.

Tetchytyke said:

Of course, the longer the delay to fulfilment of a contract the more likely it is that detriment will be caused, and so for prolonged delays the defence of "I didn't know" would start to fall away.

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This assertion does not have any basis in law. The CRA does however provide for situations where delivery is delayed, and has a mechanism for the consumer to demand delivery in a reasonable time or cancel.

Tetchytyke said:

I don't see how the same can be said to apply in this situation. A train operating company, acting reasonably, will know or should know that its passengers have places to be and that there will be consequences arising from any delay to their journey. Something as mundane as a late collection fee from a childcare provider, or a missed appointment fee at the hairdresser or dentist, is well within the realm of a plausible and realistic consequence of a delay. And the longer the delay, the more realistic it is that those who have been delayed will experience those sorts of consequences.

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This is a nonsense. Some passengers are going home, some to work, some to leisure activities, some to go spotting, some to see family, some because they like trains. It is not at all true that all of its passengers "have places to be" or that a delay will automatically incur a consequential loss. There might be narrow exceptions like a charter train to a sporting event or (as Watershed alludes to) a train to an airport station, assuming the passenger's timetabled arrival time was in line with their airline's recommendation. But for normal timetabled trains generally, any suggestion that a consequential loss is known to the railway and fits within the test of Hadley v Baxendale is hopeless.

Tetchytyke said:

If we take your reductivist view then nobody could ever claim consequential loss for anything.

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Straw man. (And calling things reductivist is itself reductive.)

Tetchytyke said:

"I didn't know" would trump everything and we may as well just put the Consumer Rights Act in the bin.

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Watershed has already addressed the point of the CRA and I adopt that view.

island said:

Indeed it is. You can also tell a train ticket seller before buying your ticket that you're getting a train to pick up your son from school and will incur a cost of £10. In the unlikely event the ticket seller accepts this stipulation, it would then form part of the contract.

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island said:

This is a nonsense. Some passengers are going home, some to work, some to leisure activities, some to go spotting, some to see family, some because they like trains. It is not at all true that all of its passengers "have places to be" or that a delay will automatically incur a consequential loss. There might be narrow exceptions like a charter train to a sporting event or (as Watershed alludes to) a train to an airport station, assuming the passenger's timetabled arrival time was in line with their airline's recommendation. But for normal timetabled trains generally, any suggestion that a consequential loss is known to the railway and fits within the test of Hadley v Baxendale is hopeless.

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I'd agree - and go a stage further. If I went to an operator and asked to purchase a ticket on the express basis that I would be eligible for consequential loss, I'd expect the operator to refuse. A canny operator might then offer to sell me insurance to cover that risk. But the idea that a £5 ticket would create an open-ended liability to the operator for any claim any passenger might claim to make is just implausible.

35B said:

But the idea that a £5 ticket would create an open-ended liability to the operator for any claim any passenger might claim to make is just implausible.

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I do think this hits the essence of the issue. Would people here be happy with significant fare rises, or increase in public subsidy, in order to handle and payout claims for consequential losses?

Benjwri said:

I do think this hits the essence of the issue. Would people here be happy with significant fare rises, or increase in public subsidy, in order to handle and payout claims for consequential losses?

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5-10% of the ticket cost as an optional insurance policy (which must be purchased at the same time as the ticket) covering up to, say, 4 times the cost of the ticket with no excess but forfeiting the right to Delay Repay when a claim is made.

In my case of the original post, assuming a 5% insurance fee, I would have paid £34.90 + £1.75, so a total of £36.65. I could have claimed the full £10 school fee back, meaning the railway is out by £8.25. However, I would not have been eligible for the £6.50 Delay Repay (which is now safely in my PayPal account) so they would have only lost £1.75. Five other people purchasing the same insurance policy for the same ticket, but not needing to claim, means the railway is in profit.

island said:

Some passengers are going home, some to work, some to leisure activities, some to go spotting, some to see family, some because they like trains. It is not at all true that all of its passengers "have places to be" or that a delay will automatically incur a consequential loss.

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35B said:

But the idea that a £5 ticket would create an open-ended liability to the operator for any claim any passenger might claim to make is just implausible.

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The legal test, as quoted by Island in their post:
These include that the loss must be "of a kind which the defendant, when he made the contract, ought to have realised was not unlikely to result from the breach … the words 'not unlikely' … denoting a degree of probability considerably less than an even chance but nevertheless not very unusual and easily foreseeable".

The test is not that the defendant (in this case, Thameslink) must have known about the circumstances in advance of making the contract. The test, as bolded by me, is that the defendant ought to have realised that the circumstances were "not unlikely" to occur as a result of the breach, that the circumstances would be "easily foreseeable."

A 45-minute delay causing someone to be late for collecting their child from daycare is, in my opinion, easily foreseeable. As are the financial consequences of that- I've never experienced a childcare provider who doesn't charge a late collection fee.

I am genuinely interested in why anyone would think the opposite. "Oh we couldn't possibly have foreseen that someone using a commuter railway had a deadline by which time they had to collect their child from daycare" seems, to me, to be an interesting argument for a TOC to try and make.

As for it being open-ended, no, the legal test is that it has to be reasonably foreseeable. That will, of course, depend on the exact circumstances.

Tetchytyke said:

The legal test, as quoted by Island in their post:
These include that the loss must be "of a kind which the defendant, when he made the contract, ought to have realised was not unlikely to result from the breach … the words 'not unlikely' … denoting a degree of probability considerably less than an even chance but nevertheless not very unusual and easily foreseeable".

The test is not that the defendant (in this case, Thameslink) must have known about the circumstances in advance of making the contract. The test, as bolded by me, is that the defendant ought to have realised that the circumstances were "not unlikely" to occur as a result of the breach, that the circumstances would be "easily foreseeable."

A 45-minute delay causing someone to be late for collecting their child from daycare is, in my opinion, easily foreseeable. As are the financial consequences of that- I've never experienced a childcare provider who doesn't charge a late collection fee.

I am genuinely interested in why anyone would think the opposite. "Oh we couldn't possibly have foreseen that someone using a commuter railway had a deadline by which time they had to collect their child from daycare" seems, to me, to be an interesting argument for a TOC to try and make.

As for it being open-ended, no, the legal test is that it has to be reasonably foreseeable. That will, of course, depend on the exact circumstances.

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I think you are over-emphasising the on the ground consequence, and paying insufficient attention to the ability to predict the loss. If your interpretation were correct, the implication is that it is not unlikely that if they do not run on schedule, any passenger may encounter some form of inconvenience that incurs financial loss. That would, to all intents and purposes, expose any public transport provider to nigh-on unlimited liability for consequential loss, regardless of fare paid. The only plausible conclusion to arise from that would be that TOCs would get much more picky about their business, and either raise prices or move to a model where the purpose and risk of journey were assessed pre-booking, quite likely with some form of "I accept that there is nothing in my journey that may require reimbursement in excess of my fare in the event of delay" wording required prior to booking without paying for insurance.

In saying "the loss must be of a kind which...was not unlikely to result" requires some level of understanding of the level of loss involved. That might be relatively trivial, as in this example. It might be very large, as for example might be the case with someone travelling First Class on a long haul flight.

Given the general presumption against payment of consequential losses, I think the reading of the legislation has to take into consideration the circumstances of the sale, not just the end conclusion. That is in just the same was as the disappointed customer needs to accept that "due care and diligence" isn't a free pass for anything that doesn't work out right, as the examples already discussed make clear.

Ultimately, non-liability for consequential loss is an essential part of commercial practice, to allow companies to sell goods and services at a manageable level of risk.

flitwickbeds said:

5-10% of the ticket cost as an optional insurance policy (which must be purchased at the same time as the ticket) covering up to, say, 4 times the cost of the ticket with no excess but forfeiting the right to Delay Repay when a claim is made.

In my case of the original post, assuming a 5% insurance fee, I would have paid £34.90 + £1.75, so a total of £36.65. I could have claimed the full £10 school fee back, meaning the railway is out by £8.25. However, I would not have been eligible for the £6.50 Delay Repay (which is now safely in my PayPal account) so they would have only lost £1.75. Five other people purchasing the same insurance policy for the same ticket, but not needing to claim, means the railway is in profit.

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Would you actually have bought this though?

Anyway a price of £1.75 might be reasonable if the payout is capped at £10. If the limits are in the thousands - as they really need to be for consequential loss - that's stupendously low. And probably not really much of a function of the price of the ticket but instead a flat fee.

Put another way, insurance companies need to make money. Unless they are mispricing risk, whenever you take out an insurance contract you are making a negative expectancy bet (ignoring weird stuff to do with taxes and long term financial market performance, the latter of which is anyway best considered an opportunity cost). Outside of regulatory reasons the only reason correctly priced insurance is rational for both parties is because the insured is insuring against a cost that either wipes them out entirely or otherwise produces an intolerable burden.

If you consistently insure yourself against £10 costs you are going to be losing an absolute shed load of money. It only makes sense if £10 is said intolerable burden. If it were then traditionally the answer would be rather than sending the kid to after school club you'd send them down the mines. Think it's illegal now though.

Egg Centric said:

Would you actually have bought this though?

Anyway a price of £1.75 might be reasonable if the payout is capped at £10. If the limits are in the thousands - as they really need to be for consequential loss - that's stupendously low. And probably not really much of a function of the price of the ticket but instead a flat fee.

Put another way, insurance companies need to make money. Unless they are mispricing risk, whenever you take out an insurance contract you are making a negative expectancy bet (ignoring weird stuff to do with taxes and long term financial market performance, the latter of which is anyway best considered an opportunity cost). Outside of regulatory reasons the only reason correctly priced insurance is rational for both parties is because the insured is insuring against a cost that either wipes them out entirely or otherwise produces an intolerable burden.

If you consistently insure yourself against £10 costs you are going to be losing an absolute shed load of money. It only makes sense if £10 is said intolerable burden. If it were then traditionally the answer would be rather than sending the kid to after school club you'd send them down the mines. Think it's illegal now though.

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Well that's why it would be optional. In cases where I'm not on a deadline, I don't buy it. In cases where I know a meeting finishes at 1.45 and I need to be back by 3.30, I would at least seriously consider purchasing it.

My proposal was that the claim cap would be 4x the cost of the ticket - so about £120 in my case (or £60 if instead it was capped per leg as it was a return ticket). I'd compare it to concert ticket insurance which is a couple of quid on a ~£40 ticket and covers you in the event of illness or on the day disruption.

flitwickbeds said:

I'd compare it to concert ticket insurance which is a couple of quid on a ~£40 ticket and covers you in the event of illness or on the day disruption.

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Unless you think you are more likely to be ill etc. than the insurance company has calculated this still has negative expected value (i.e. is a bad deal).

It may seem bad that you have to pay a lot in this case but self insuring is always going to be cheaper long term since you don't have to pay any transaction costs (it also saves the hassle of claiming).