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🚆 Why your train refund just went to charity

🚆 Why your train refund just went to charity

Idin Sabahipour
June 10, 2026

Together with

EDITOR’S RAMBLE 🗣
TOGETHER WITH GOWLING WLG 🤝
FEATURED REPORT 📰
IN OTHER NEWS 🗞
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STUFF THAT MIGHT HELP YOU 👌

If you take just one thing from this email...

In 2024, Stagecoach South Western Trains settled a lawsuit over charging their passengers too much. They agreed to pay up to £25 million in compensation. Under the law governing these kinds of collective actions, any money that goes unclaimed can't go back to the company – it has to be redistributed to legal advice charities instead.

Fewer than 1% of eligible passengers ever came forward, because no one had ever run a settlement like this before and most people had no idea they were owed money. So, as a result, this week £3.9 million of unclaimed money was distributed across 16 charities.

EDITOR’S RAMBLE 🗣

I read an interesting story this week.

The FCA has written to Premier League clubs warning them about their crypto sponsors.

Source

A lot of these crypto businesses and trading platforms aren't authorised to operate in the UK. So when their logo ends up on the shirt of an English team, in front of millions of fans, people could assume the club is vouching for their legitimacy (it isn't).

As the FCA put it, a logo on a shirt only means one thing: that crypto firm paid to be there.

Fans who start using an unauthorised firm have basically no protection if it goes under. Normally, when you deal with an FCA-authorised firm, you've got some protections if things go wrong (like a complaints service called the Financial Ombudsman, or the Financial Services Compensation Scheme, which can repay you if the firm collapses).

With an unauthorised firm, none of that applies – and the clubs themselves could be on the hook.

The FCA said that taking money from an unauthorised firm "may constitute criminal property" – so a club banking the sponsorship cash could be handling the proceeds of crime without realising it.

The FCA wants every club doing proper due diligence before signing these deals – and it's told a few of them directly that it isn't happy.

For example, Kraken, which sponsors Spurs, shows up on the FCA's register (through its parent, Payward). OKX, whose logo sits on Manchester City's sleeve, doesn't. You can search the FCA’s register here if you’re interested.

It’s not simple to check though. Because being "on the FCA register" doesn't mean the sponsor's products are regulated – Kraken's registration only covers money-laundering checks, and its crypto services still carry no Ombudsman or compensation-scheme protection.

So maybe more clubs will end up asking their lawyers to help them vet incoming sponsors next year.

– Idin

TOGETHER WITH GOWLING WLG 🤝

Can 750 words get you a one-week paid internship at a global law firm?

That’s the challenge set by Gowling WLG in their ESG Essay Competition. This year’s question explores a real issue affecting the firm’s clients right now:

To what extent are ESG standards and regulations becoming more fragmented and how should lawyers support their clients in responding to this shift?

By entering, you’ll be in with the chance to win:

A paid internship in Gowling’s London office (with accommodation)
Experience working alongside lawyers advising on ESG matters
An invite to an exclusive Open Day for the top-placed entrants

Plus, all entrants will be invited to a virtual event to hear application tips directly from the firm.

It’s open to students and graduates of all backgrounds (with the right to work in the UK).

FEATURED REPORT 📰

🚆 Why your train refund just went to charity (the £3.9 million no one claimed)

What’s going on here?

In 2024, a legal claim against Stagecoach South Western Trains, a UK train company, ended with the company agreeing to pay up to £25 million for overcharging passengers.

But this week, it was announced that fewer than 1% of the passengers who were owed money had come forward to claim it. So the unclaimed money would instead be used to fund a £3.9 million grant programme for UK legal advice charities.

This isn’t uncommon. In a few recent opt-out class action cases, the people who suffered the loss never actually got the money.

What is an opt-out class action?

A class action lets lots of people who each lost a small amount of money in the same way sue a company together, in a single case. The law calls that group a “class” – and it saves them all from bringing thousands of tiny claims one by one.

Most of these group cases are “opt-in”. That means you only become part of the case if you actively sign up to join it.

But one type of case works differently. In the Competition Appeal Tribunal – a special court that handles certain business disputes – cases can be run on an “opt-out” basis. Opt-out means that if you're one of the people affected, you're in the case automatically, without signing up or doing anything at all. This applies to one specific area of the law – competition law.

🤔 What is competition law?

Competition law (also called antitrust in the US) is the set of rules that keeps markets fair. It stops companies from doing things like teaming up to fix prices high or using their size to overcharge customers.

Take Netflix. If it bought up all its rivals, it could keep hiking prices, knowing you've got nowhere else to stream. When a company abuses that kind of power, the customers who overpaid can sue in the Competition Appeal Tribunal under Chapter II of the Competition Act 1998.

There are three main benefits to opt-out class actions:

💸 Alone, most people would not bring a claim. If someone has only been overcharged by a few pounds, the refund is usually too small to justify the time, cost, and effort of suing. Without a group claim, the company that acted badly may simply keep the money.
🤝 Bundled together, the claim becomes worthwhile. If there are millions of affected customers, lots of small losses can add up to a very large claim. That makes it more realistic to challenge the company.
🧲 Opt-out includes people automatically. Customers do not need to sign up at the start of the case. This means the claim can represent far more people, which should make the case stronger and, in theory, help more affected customers receive compensation.

How do Competition Appeal Tribunal cases work?

These cases come in two basic types 👇️

	⚡ Follow-on cases	🏗️ Standalone cases
What is it?	This is when a regulator has already found that a company broke the law. The claim doesn't have to prove any wrongdoing – it only fights over how much money should go back to the people harmed.	This is when no regulator has ruled on a company's conduct. Whoever brings the claim has to prove the company broke the law from scratch, and then work out the bill – which makes it riskier and far more expensive.
Example	The Mastercard case, where the European Commission (pre-Brexit) had already ruled that its card fees broke competition law.	The Stagecoach South Western Trains case, where the person suing would have had to show that the overcharging was first unlawful, and then determine compensation.

When the regime was set up, everyone expected follow-on claims to dominate – they're the easy ones. Instead, around 90% of cases today are standalone.

Each standalone claim is run by one person who sues on everyone's behalf – the class representative. A class representative can be a shell company, a consumer body, or an individual. For example Justin Gutmann – a professional class representative – brought the Stagecoach South Western Trains case above. That's why these cases show up with typically a single name on them, like Justin Gutmann v Apple.

What started as a way to make small losses worth fighting has become a major business. UK opt-out claims are now worth tens of billions of pounds, and the investors behind them spend roughly £500 million a year just on legal bills.

Who pays the legal bills?

Class actions are extremely expensive. A case can run for years and cost tens of millions of pounds before anyone receives compensation.

That is why many rely on litigation funders – outside investors, often hedge funds, who pay the legal costs in return for a share of any recovery. Claimants pay nothing upfront and owe nothing if the case loses; the funder carries the risk, and if the case wins, recovers its costs plus an agreed return.

It also means public-interest claims are being paid for by private investors who expect to make a profit. And since PACCAR, there has been serious uncertainty over exactly how those investors are allowed to be paid.

🤔 What happened in PACCAR?

In 2023, the Supreme Court looked at a common type of litigation funding agreement. Under these agreements, the funder was paid a percentage of the damages if the case succeeded.

The Court ruled this counted as a “damages-based agreement”. Because they hadn't followed the strict rules in the Damages-Based Agreements Regulations 2013, many became unenforceable.

Funders then changed their contracts. Instead of taking a percentage of the damages, many now ask for a multiple of what they spent – for example, two or three times their costs.

But that workaround is still being tested.

Why aren’t these cases actually benefitting customers?

These claims are brought to benefit regular consumers. But the money often does not reach them. There are three main reasons.

⚖️ Some cases lose, or settle for much less than expected. In 10 years of these cases, only one has ever reached a trial verdict – the claim against BT, the telecoms company, over its landline prices – and consumers lost. (The Tribunal agreed BT's prices were high, but not unfair enough to breach competition law.) Every other case has either settled or is still slowly moving through the courts. And settlements can come in far below the damages claimed: more than £100 billion has been claimed across all these cases, but only a few hundred million has actually been won.

💸 The funder may get paid before consumers see much. In the Mastercard case, the litigation funder Innsworth was reportedly set to receive around £68 million out of the £200 million settlement. The 44 million consumers the case was meant to help were left with about £45 to £70 each.

🙅 You are included automatically, but you still have to actually claim the money. If the case wins or settles, you usually still have to notice the announcement, find the claims website, and apply before the deadline. Most people never do. In the Stagecoach South Western Trains case, fewer than 1% of passengers came forward.

🤔 Why does the unclaimed money go to charity?

Because in opt-out competition cases, unclaimed damages do not go back to the company. Under s.47C of the Competition Act 1998, money left over after the claims process must be paid to the Access to Justice Foundation, a charity that funds other legal aid charities.

In the Stagecoach South Western Trains case the Foundation has allocated the unclaimed money to 16 legal advice charities.

How can you use this in your applications?

Here are some ways to use this story in your applications — whether you're aiming for the claimant firms that bring opt-out class actions (like Leigh Day) or the firms that defend them (like Freshfields, HSF Kramer and Slaughter and May).

Insight	Why it’s important	How to use it in your applications
Winning a class action doesn't mean consumers get paid	The Mastercard claim settled at £200 million after once being valued at £14 billion, leaving shoppers with £45 to £70 each. In the Stagecoach South Western Trains case, under 1% of passengers actually claimed what they were entitled to from the settlement, so most of the money went unclaimed and ended up funding legal-advice charities instead.	When explaining why litigation or competition law interests you – especially to a disputes-heavy firm – point to the gap between the headline claim and the actual payout. How wide that gap ends up is much of what the litigation actually fights over: claimant lawyers push to close it, and defence lawyers work to widen it. You can talk about that tension to show you understand what the work really involves.
Litigation funding is a business, not a charity	Outside investors, often litigation funders, pay the legal bills for a share of any recovery – one funder Innsworth was reportedly set to take around £68 million of Mastercard's £200 million settlement. The funders are in it for the money. But the solicitor doesn't work for them – they work for the client.	When discussing group claims, mention this conflict: funders are profit-driven, but solicitors must act in their clients' best interests. For example, a funder owed a fixed return might prefer a quick settlement that locks in its payout, even if holding out could win the claimants more – and the solicitor has to advise on what's best for those claimants, not what suits the funder. It shows you understand both how the work is paid for practically and where your professional duty sits.
A takeover can create a monopoly that competition law guards against	Competition law stops a company abusing market power to overcharge customers. The same concern comes up in M&A too. When one big company buys another in the same industry, the merger can leave the combined business facing too little competition, which could harm consumers.	In a case study where one company is buying a rival in the same industry, flag that the deal will likely need competition clearance, then suggest building that risk into the deal itself – making completion conditional on the regulator's approval, and agreeing upfront who bears the cost if it's blocked. It shows you can spot the risk and then manage it in the deal terms.

Insight

Why it’s important

How to use it in your applications

Winning a class action doesn't mean consumers get paid

The Mastercard claim settled at £200 million after once being valued at £14 billion, leaving shoppers with £45 to £70 each.

In the Stagecoach South Western Trains case, under 1% of passengers actually claimed what they were entitled to from the settlement, so most of the money went unclaimed and ended up funding legal-advice charities instead.

When explaining why litigation or competition law interests you – especially to a disputes-heavy firm – point to the gap between the headline claim and the actual payout.

How wide that gap ends up is much of what the litigation actually fights over: claimant lawyers push to close it, and defence lawyers work to widen it.

You can talk about that tension to show you understand what the work really involves.

Litigation funding is a business, not a charity

Outside investors, often litigation funders, pay the legal bills for a share of any recovery – one funder Innsworth was reportedly set to take around £68 million of Mastercard's £200 million settlement.

The funders are in it for the money. But the solicitor doesn't work for them – they work for the client.

When discussing group claims, mention this conflict: funders are profit-driven, but solicitors must act in their clients' best interests.

For example, a funder owed a fixed return might prefer a quick settlement that locks in its payout, even if holding out could win the claimants more – and the solicitor has to advise on what's best for those claimants, not what suits the funder.

It shows you understand both how the work is paid for practically and where your professional duty sits.

A takeover can create a monopoly that competition law guards against

Competition law stops a company abusing market power to overcharge customers. The same concern comes up in M&A too.

When one big company buys another in the same industry, the merger can leave the combined business facing too little competition, which could harm consumers.

In a case study where one company is buying a rival in the same industry, flag that the deal will likely need competition clearance, then suggest building that risk into the deal itself – making completion conditional on the regulator's approval, and agreeing upfront who bears the cost if it's blocked.

It shows you can spot the risk and then manage it in the deal terms.

IN OTHER NEWS 🗞

💰 Quinn Emanuel has pushed newly qualified (NQ) lawyer pay in London to a record £189,000. This means the litigation specialist law firm is £9,000 ahead of rivals like Davis Polk, Gibson Dunn and Paul Weiss. The firm also raised pay across all associate levels, with two-year qualified lawyers now on £231,000. Quinn Emanuel doesn't offer UK training contracts, so the move will help them poach qualified talent from other firms.
🤝 Taylor Wessing's UK arm and US firm Winston & Strawn officially merged to create Winston Taylor. The new transatlantic firm launches with over 1,400 lawyers and £1.3 billion in revenue. Talks of the merger came to light late last year, and partners approved the deal in January. There's still no word on pay at the merged firm. Before the deal, Winston & Strawn paid NQs £160,000 – which was well above Taylor Wessing's £115,000.
🍬 US group Ingredion has agreed to buy Tate & Lyle for £3.7 billion, ending the sweetener maker's near-century on the London Stock Exchange. The takeover runs through a scheme of arrangement (a court-approved process for buying a UK company that needs shareholder and High Court sign-off). This deal adds to a run of UK-listed firms being snapped up by American buyers and leaving London. Linklaters is advising Tate & Lyle, and Hogan Lovells is advising Ingredion.

OPEN TABS 🌐

📖 Bookworm: Try to name a famous novel from this heavily blacked-out passage
🧀 Hard currency: This Italian bank accepts Parmesan cheese as collateral
⏳️ Forgotten: Read a Wikipedia article that almost no one has read before

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