The Competition Appeal Tribunal has handed down its judgment in three parallel opt-out collective proceedings concerning rail Boundary Fares, dismissing the claims. In this article we explore the judgment’s clarifications regarding the scope of the prohibition of abuse of dominance, as well as the broader implications of the judgment for the UK’s collective proceedings regime.

Key takeaways

The judgment provides guidance on the scope of abuse of dominance under UK competition law. The Tribunal emphasised that competition law “is not a general law of consumer protection” and that while the concept of exploitative abuse by “unfair” conduct should develop to reflect new patterns of commerce, that concept “is not unlimited”.  

Expanding on the above, the judgment explains that the prohibition of abuse of dominance does not create an obligation on a dominant company to organise or conduct its business to achieve the best possible outcome for its customers. In the words of the Tribunal, “where the allegations concern systemic conduct, the fact that the dominant company could have carried out a particular aspect of its business better, or in a different way that would have benefitted consumers, does not mean that this conduct crosses the line to constitute abuse.”

In particular, the judgment noted the following:

1. there is no duty for a dominant entity actively to assist all its customers to pay the lowest price or to buy the optimal product for their needs; and
2. a dominant entity does not have an obligation actively to promote or advertise a product that will benefit some of its customers, if the product is otherwise made sufficiently available and its existence is not concealed. 

Background 

Mr Justin Gutmann (the class representative) brought standalone collective proceedings on behalf of a class of rail passengers on an opt-out basis against certain train operating companies: South Western Railway (SWR), London & South Eastern Railway (LSER) and Govia Thameslink Railway (GTR). 

The claims concerned so-called “Boundary Fares”. These are extension, or add‑on, rail tickets used with a Transport for London (TfL) Travelcard, covering the journey from the outer edge of the zone to which the Travelcard applies to the customer’s destination. The class representative alleged that the train operating companies abused their dominant position by not making Boundary Fares sufficiently available, and/or failing to take reasonable steps to make customers purchasing tickets aware of Boundary Fares. He alleged that this resulted in TfL Travelcard holders buying point-to-point rail tickets for their full journey instead of Boundary Fares, and thereby being charged twice for the part of the journey already covered by their Travelcards.

The claims were certified in October 2021, and appeals against certification were dismissed by the Court of Appeal in July 2022. Our previous articles on the certification and Court of Appeal judgments discuss these judgments in more detail.

The allegations of abuse

Mr Gutmann’s claims were purely “standalone”, meaning that they did not “follow on” from an underlying regulatory decision, and required the class representative to establish liability. He advanced two principal allegations:

1. the defendants failed to ensure there was general customer awareness of the existence of Boundary Fares (the lack of awareness allegation); and

2. the defendants failed to make Boundary Fares sufficiently available for sale through their principal sales channels and through third party retailers (the lack of availability allegation),

   each of which impeded customers’ ability to purchase Boundary Fares and thereby avoid being charged twice for parts of their journeys.

The class representative claimed that these practices constituted unfair trading conditions within the meaning of section 18(2)(a) of the Competition Act 1998, which prohibits dominant companies from directly or indirectly imposing unfair prices or other unfair trading conditions.

The Tribunal’s findings

The Tribunal assessed and rejected both allegations, considering two contextual factors:

• regulatory context: the defendants operated within a closely regulated framework overseen by the Department for Transport (DfT), and each defendant had a detailed franchise agreement concerning the operation of its rail franchise with the DfT. However, neither the Secretary of State for Transport nor the Office of Rail and Road ever told the defendants to promote Boundary Fares more actively or to sell them through particular channels; and
• lack of benefit: the defendants did not derive commercial benefit from the alleged conduct, as they did not receive payment in relation to Travelcards that were not actually used on their services and so were not being “paid twice” as alleged by the class representative. While proof of gain is not a legal prerequisite for abuse, the absence of benefit was relevant to whether the practices had legitimate justifications.

Allegation 1: lack of awareness

The Tribunal found the evidence the class representative relied on in support of this allegation to be “wholly unsatisfactory”. Notably, no survey of Travelcard holders was adduced to evidence a lack of awareness, despite the class representative having the resources to do so. In contrast to cases such as Michelin, where obscure discounting practices were deliberately used, the Tribunal found no evidence of any policy by the defendants to obscure Boundary Fares or to keep customers unaware of them. In fact, there was evidence of staff training on Boundary Fares, and no suggestion that staff withheld information when relevant to a purchase.

Importantly, the Tribunal clarified that “a dominant company has no duty under competition law actively to assist all its customers to pay the lowest price or to buy the optimal product for their needs”. And “if a dominant firm makes a product sufficiently available to customers, and does not conceal its existence, it does not have a special responsibility to promote or advertise that product so as to increase customers’ awareness of it.”

Allegation 2: lack of availability

Across the defendants’ three principal sales channels - ticket offices, ticket vending machines (TVMs) and online - the Tribunal concluded that, while systems could have been improved, the overall selling arrangements did not amount to unfair trading conditions:

1. At ticket offices, Boundary Fares were made available by all defendants.
2. For TVMs, availability varied. Where Boundary Fares were not offered, the Tribunal accepted the defendants’ justifications. For SWR and GTR, the rationale was the need to upgrade or replace TVMs. For LSER, the decision not to offer Boundary Fares via TVMs was based on objectively justified fraud prevention concerns given the prevalence of ungated stations.
3. Online, none of the defendants sold Boundary Fares during the relevant period. However, the Tribunal accepted evidence of technical and integration constraints and the comparatively limited role of train operating company digital channels for much of the claim period.

As to sales via third party retailers, the Tribunal found that the defendants did not have the contractual ability to require the most significant third-party retailer (Trainline) to sell Boundary Fares, and that the market presence of other third-party retailers was insufficiently material for any alleged omission to amount to an abuse. In short, there was no basis to conclude that the defendants’ conduct via third party channels created unfair trading conditions amounting to an abuse of dominance. Notably, however, the Tribunal found that if there had been a clear contractual obligation with Trainline to sell Boundary Fares, the defendants should have pressed to enforce it. 

Finally, the Tribunal found that the absence of availability of Boundary Fares for certain other ticket types (e.g.  advance fares and season tickets) did not amount to an abuse. It considered that a failure to create a product which would be of “marginal benefit” to a small portion of customers did not amount to an abuse of dominance, as a company which failed to create such a product could hardly be said to be failing to engage in normal competition or to be exploiting customers.

Settlement with Stagecoach

As summarised in our previous update, the Tribunal had previously approved a settlement between the class representative and Stagecoach, a former defendant in these proceedings. Stagecoach initially made up to £25m available to class members who submitted a valid claim by 1 January 2025. However, only “an extremely disappointing” 7,290 claims were validly submitted by class members, with a total claim value of £216,485. Per the terms of the settlement, this meant that the amount Stagecoach had to make available was reduced to £10.2m, and the class representative could apply for an order to allocate up to £9,983,515 (£10.2m minus the £216,485 successfully claimed by class members) of undistributed damages towards his costs, fees, and disbursements. 

Prior to a stakeholder entitlement hearing in September 2025, it was agreed that £3.8m of the unclaimed pot would be distributed to charity, leaving c.£6.2m to be divided between the legal and financial stakeholders that supported Mr Gutmann’s claim (his lawyers, funder and ATE insurer). However, as noted by the Tribunal in its resultant judgment, the stakeholders were "far apart on their respective claims to entitlement" and "there seemed to the Tribunal to be an air of unreality in the positions taken by the stakeholders as to what sums that would be reasonable and proportionate for each of them to be awarded out of that sum". Concluding its judgment on stakeholder entitlement, the Tribunal noted that there were "lessons to be learned, if not already learned" in the management and settlement of collective proceedings. Importantly, the Tribunal noted that in the future “far more work needs to be done on the likely level of uptake at the stage of settlement approval, and in appropriate cases at the earlier certification stage”.

Wider implications 

The judgment highlights the level of scrutiny the Tribunal will apply to claims that push the boundaries of competition law – particularly those involving allegations of abuse that might arguably be better construed as consumer protection issues. In short, absent strong and compelling evidence to support a finding of abuse, a claim will fail. 

Looking forward, distribution plans are likely to attract greater and earlier focus from the Tribunal – possibly at certification stage, and certainly before approval of any collective settlement – to avoid disappointing levels of take-up by class members. 

Finally, the judgment also serves as a reminder that the Tribunal will consider the cost-benefit of collective actions throughout the proceedings. Upon certification of Mr Gutmann’s claims, the Tribunal found that the cost-benefit of these proceedings was a factor that weighed slightly against certification but did not sway its overall assessment. However, in concluding its final judgment, the Tribunal noted that if it was wrong in its rejection of all aspects of the alleged abuse, such that some could be sustained, that would nonetheless lead to a significant narrowing of the class and a reduction in the potential amount of damages – factors that might warrant revoking certification of the claim.