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When passengers purchase a fare and travel by rail they are in effect entering into an agreement with the train operating company (TOC). The terms of this agreement, which define the rights and duties of both passenger and TOC, are set out in the National Rail Conditions of Travel and the individual Passenger’s Charter of the TOC.

A passenger’s entitlement to compensation depends on the train company they are travelling with. This is because train companies subscribe to different compensation schemes, namely the Passenger’s Charter, Delay Repay or Delay Repay 15 schemes.

Almost all TOCs now operate a version of Delay Repay. Under the original Delay Repay, a passenger is entitled to compensation if a train is delayed by more than 30 minutes, which is offered irrespective of the cause of the delay. Under Delay Repay 15, eligible passengers can claim 25% of the cost of a single fare for delays between 15 and 29 minutes. Under the Passenger’s Charter, compensation for individual journeys is only offered after one hours’ delay and may not be offered if the reason for the delay is outside the industry’s control.

It is generally agreed that Delay Repay 15 is relatively generous for single/return fare passengers, but it has taken time to introduce. The Government has stated its intention to explore the roll out of Delay Repay 15 in this Parliament, but historically it has taken many years to introduce new compensation schemes.

It could be argued that Delay Repay favours long-distance passengers. This largely relates to: commuters not being compensated for repeated poor performance below the Delay Repay thresholds; and the claims process being prohibitively time-consuming. Of the £80 million paid out in compensation in 2017/18, around 40% was paid by the two long distance operators on the East and West Coast main lines. This is despite the two franchises only accounting for 21% of total passenger revenues.

Previously, under the Passenger’s Charter scheme, season ticket holders were compensated by way of an annual discount upon renewal. This was typically a 5% or 10% discount on the season ticket if one or both punctuality and cancellation targets of the train operator were not met. This is no longer the case under Delay Repay as they are refunded on the same basis as single/return fare passengers.

Both the standard and enhanced Delay Repay compensation schemes have regularly been touted as being more generous to passengers. This is true for many, but there is evidence in this paper to suggest that the shift to Delay Repay from the Passenger’s Charter has left many season ticket holders worse off. Govia Thameslink Railway season ticket holders, for example, would have received considerably more compensation since the start of the current franchise under the older compensation regime than under Delay Repay.

There is also evidence in this paper to suggest that the shift from the Passenger’s Charter to Delay Repay has had a positive impact on some train operator’s revenues. This is because the compensation paid out under the Charter following a single year of poor performance can be enough to eclipse several years of compensation paid out under Delay Repay. Further investigation would be required to make a more authoritative assessment of the revenue impact for the wider franchising system.

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