Thursday, 24 April 2014

Cambridge Report - Afternoon Session

This is a continuation of the blog report of the morning session.

Legal Arguments (continue)

After lunch Mr Kirk asked to continue so he could address the problem that ParkingEye had so far not introduced any evidence regarding their costs. Feverish activity had obviously gone on with regard to this during the break, and ParkingEye had come up with a copy of their 2012/13 accounts.

Mr Cooke was recalled to the witness box and asked to explain the accounts.

The turnover for the period was £14.3 million, and the net profit 1.0 million, giving a percentage profit of 7.1%. Mr Cooke stated that all costs were incurred in relation to parking enforcement. There was only one copy of the accounts so HHJ Moloney took a look and then passed it back to Mr Cooke. HHJ Moloney asked whether Mr Cooke would like to take another look and perhaps change his statement. Mr Cooke repeated his assertion that all costs were incurred in relation to parking enforcement.

Mr Cooke stated that the bulk of the income was from parking charges.

Mr Kirk argued that the fees were roughly equivalent to council penalty fees and that other car parks charged the same. He also stated that the body that regulates ParkingEye, the British Parking Association, set a £100 limit on parking charges in their code of practice and that amounts above this limit had to be justified.

Mr Foster asked if HHJ Moloney could read that part of the code of practice out. HHJ did so; the paragraph stated that if a charge was for breach of contract, then it must be a genuine pre-estimate of loss. HHJ Moloney commented that he could see why Mr Foster asked him to read the full clause.

HHJ Moloney commented that this business was run in a different way to ordinary commercial transactions.

Defence Legal Arguments

At 2.30 Mr Foster took the floor. HHJ Moloney warned the defendants that just because he had been tough on the claimants nothing should be read into this. He would be tough on them too.

Mr Foster pointed out there was no contract for parking. It could only be a licence, if anything, and no a contract. He pointed out the contract with the landowner gave no right to grant parking, and that it explicitly stated there was no Landlord and Tenant relationship.

He pointed out that VCS v HMRC was a troubled judgment, that Bruton v London and Quadrant Housing Trust referred to in paragraph 22 was a narrow authority and that issues on trespass were obiter.

HHJ Moloney wondered if car parks would clog up if enforcement was not possible.

Mr Foster pointed out that the pre-estimate of loss calculations were a circular argument.

He pointed out that the case law introduced by Mr Kirk were cases between large corporations, with teams of expensive lawyers in which all the contractual terms had been individually negotiated. They were, therefore, parties of equal standing, and completely different from a 'take it or leave it' contract communicated by signage to a consumer.

He further argued that Consumer Law was moving in the opposite direction to commercial law, with the introduction of statutes such as the UTCCR 1999 to afford greater protection for consumers against rapacious corporations.

Mr Foster conceded that one defendant was not covered by the Equality Act 2010, but did not concede that he should not have been given more time and asked HHJ Moloney to still consider this.

Mr Foster asked HHJ Moloney to refer to the 2008 contract between ParkingEye and GVA Grimly for Corporation Street Preston. He pointed out several clauses, including the statement in page 5 of the user manual that the purpose of the system is to deter motorists from using the GVA Grimly car park for anything other than shopping within the stores. He also referred to page 3 of the contract where ParkingEye defined parking charges as 'the monetary penalty fee'. He pointed out that just because a contract stated a fee was a penalty did not mean it was a penalty. It was, however, instructive.

HHJ Moloney replied that the understood why Mr foster wished to point that out even if the contrat was no longer current.

HHJ Moloney pointed out that he would be reviewing both parties skeleton arguments in depth and that it was not necessary to mention everything. Therefore, a substantial part of both parties cases may not have been mentioned in open court.

There were also periods of Mr Fosters defence where The Prankster failed to record everything, and so this account may not include all arguments.

Wrapping Up

HHJ Moloney stated that if a charge looked like a penalty, quacked like a penalty and swam like a penalty, then it was probably a penalty. He wondered whether it would be necessary to create a class of good penalty and bad penalty to deal with the situation.

He repeated that judgment would be reserved and that he was busy for a week, so it would probably take between 2 and 4 weeks. He would email a copy of the judgement to the claimants who should then forward it immediately to the defendants.

There was then some discussion on appeals and HHJ Moloney stated that as he was the most senior judge on the circuit he would attempt to leapfrog any appeal straight to the Court of Appeal.

Phone hacking

Neither side mentioned the events of the first hearing. Although it has been reported arrests have been made, nothing has been officially stated so far. it is clear though, that whatever the circumstances behind the prank phone call, the end result was that ParkingEye were able to call on their preferred barrister, Mr Kirk, to orchestrate the case for them.

Prankster Analysis

There were a few unsatisfactory elements if this is going to be a test case. It may well be that ParkingEye will later argue this site is not typical and that any judgment will therefore apply only to this site and not to any other.

For instance, ParkingEye argued they were the principal in this case. However, in several other cases The Prankster is helping with, including ones where ParkingEye's Reply to Defence was filed this very week, ParkingEye claim they are agents, not principals, and include a document based on advice from Jonathan Kirk himself to attest to this.

In these cases ParkingEye have a clause in their contract with the landowner (usually 3.11) which confirms they collect charges for breach of contract as agents on behalf of the landowner. They then retain these as payment for their service, generating a VAT only invoice to the landowner as the actual amount has been 'paid'. This clause was either not present in the contract shown to the judge, or if it was, was incorrectly redacted as it would certainly have been relevant.

The Prankster also tips his hat to Mr Kirk's deft insertion of the 2012/13 accounts (year end, August)  into the proceedings. As the parking events occurred many months before the accounts were published (April 2014), they could had nothing to do with the setting of the charges. Jonathan Langham's witness statement of 4 December 2013 states the costings are taken from ParkingEye's company accounts. This would  have been the 2011/12 accounts which were the only ones available at that time; to further demonstrate this, these were the same figures ParkingEye have been using for cases in November 2012.

The 2011/12 accounts paint a different picture. There the profit was 30%, not 7%. Capita acquired ParkingEye in October 2013. They would have presumably been aware of the likely figures in the 2012/13 accounts, and were happy to forecast  a profit for 2013/14 back up to 30%. We can therefore assume the 2012/13 accounts are a blip. When companies are purchased the year of purchase often requires an amount of extra costs and restructuring.

The unconditional acceptance of the 2012/13 year's accounts by the court was therefore a masterstroke by Mr Kirk.

The Prankster also disagrees with Mr Cooke's statement that all the costs in the accounts relate to enforcement charges. ParkingEye also operate pay and display car parks as well as free car parks, and they provide and service the machines. This is revenue generation related, not enforcement charges. Thus a significant percentage of infrastructure and personnel will be involved in the revenue generation side of the business, and these costs cannot be allocated against enforcement. Additionally, ParkingEye state they allocate around 55% of their tickets incorrectly and have to cancel them on appeal. These are costs related to dealing with 'good' motorists, and again cannot be apportioned to motorists who stay to long. Charges for breach of contract can only put you back in the position if no breach had occurred. You cannot therefore be asked to pay extra because parking eye made mistakes and incurred costs in other unrelated cases. Additionally, ParkingEye have a large number of charges where they do not enforce costs for various reasons. Again, charges for breach of contract can only put you back in the position if no breach had occurred. You cannot therefore be asked to pay extra for somebody else's breach of contract where they did not pay. Additional, ParkingEye use their system to provide management information to the landowner. This is advertised on their web site.
Live feeds on customer usage, average length of stay, drop-offs, turnover, parking revenue and more gives you the information to help you plan more effectively
This is therefore nothing to do with enforcement and means that a proportion of the ANPR infrastructure, including servers, communications and back office functions must all be costed against management services to clients and not against enforcement.

Essentially this management information is used to 'portion control' shoppers and force them to speed through the shop as fast as possible for fear of overstaying. ParkingEye can of course also use this information, and some of their contracts allow them to decrease the time allowed so that they can increase the number of overstays if they are not making enough money from a site.

It has been reported that the time allowed at the site in question was reduced from 3 hours at some point to 2 hours. The retailers on site have been reported as not being happy with this. However, as the time is negotiated between the landowner and ParkingEye they are powerless to affect this.

The Prankster also worries that HHJ Moloney was only provided information regarding charges at nearby parking sites. One of his questions was whether a £10 charge would be enough to deter motorists, and if so, then £85 would seem to be unconscionably large. The Prankster is aware of sites which charge £20 (discounted to £10 if paid within 14 days). As these sites do not seem to have a parking problem, it appears that £10 is enough of a deterrent.

The Prankster also worries that the ParkingEye business model was presented as the only possible model, and that parking chaos would ensue if ParkingEye were not allowed to operate. This is not the case and other models also work. For instance, with the £10 charge model, the landowner pays the parking company a monthly fee and makes no profit on parking charge revenue. The parking company does not then rely on penalty charges to make a profit. It therefore has no incentive to issue excessive charges.

Lastly, The Prankster worries that the court did not explore ParkingEye's cost per ticket issued. This has been established at £17 from their 2011/12 accounts and in fact the 2012/13 accounts come out with a similar figure. This establishes the charge of £85 is far too much.

The Prankster also notes that this is the third completely different explanation of pre-estimate of loss ParkingEye have come out with since October 2012. Originally they stated this was the landowners loss due to fewer people being able to shop. Then they changed it to the entire cost of running their business. Now they are saying it is the lost business if the landowner cancels the contract.

We will have to wait for a few weeks to see what HHJ Moloney decides about all this.

Happy Parking


  1. The prankster's analysis leads to a question of why weren't these points raised and asked of Mr. Cooke during questioning.

    1. It is of course easy to be wise after the event. However, on the plus side, should ParkingEye win this will not be as much of a test case as HHHJ Moloney hoped because these points remain to be explored in future hearings.

  2. I'm guessing also, that some of these points could be argued on appeal if the case was dismissed.

  3. Unfortunately the Prankster seems to be swallowing PE's Big Lie that the motorist entered into a contract. As was argued by Mr Foster "there was no contract for parking. It could only be a licence, if anything, and not a contract. He pointed out the contract with the landowner gave no right to grant parking, and that it explicitly stated there was no Landlord and Tenant relationship."

    1. I definitely agree with Mr Foster that there was no contract. I just hope the judge does too. Interestingly Mr Kirk tried to play down this angle and argue that the main point to be decided for the case was the issue of GPEOL. Mr Foster was having none of that and argued that the point of whether there was a contract was equally fundamental.

  4. Being a senior Judge I guess Maloney won't swallow baloney.
    He seemd to grasp the mettle striaight off about their right to take legal action in their own name.
    He must consider it on legal issues as they stand at present. 1st is whether PE has independent rights to make a contract with a driver (Relevant Contract).
    If he agrees that they fail on that very critical bais of non compliance to PoFA they will lose big time.

    As for the matter of whether there should be some new law for agreeing a proportionate level of charging, that doesn't stand a chance. That law exists already in UTCC legislation.

    I'm guessing that loads of other points will be in the court defence statements that he will look at very carefully. I think, guardedly that he won't want to balls this up for it to go further in the appeals process where he could be made to look silly.
    I notice the duck comments too. He seems to have sussed out that bit OK and who better to know a duck than a beak.

  5. The main issue in this case, as identified by the Judge, was the question of whether PE's charges were penalties, and if they were, could there be any commercial justification for allowing them.

    Kirk produced a number of authorities, claiming that this was the 'modern way' such things were decided, as the world had moved on from the Dunlop case in 1915. Our defence argument was that these High Court cases were between large corporations, with teams of expensive lawyers, in which all the contractual terms had been individually negotiated. They were, therefore, parties of equal standing, and completely different from a PPC 'take it or leave it' contract communicated by signage to a consumer.

    We further argued that Consumer Law was moving in the opposite direction to commercial law, with the introduction of statutes such as the UTCCR to afford greater protection for consumers against rapacious corporations.

    HHJ seemed to accept these arguments, but played everything close to his chest throughout, and we now can do no more except wait for the Judgment.

    1. Thanks - I have updated the blog to include this

  6. "We further argued that Consumer Law was moving in the opposite direction to commercial law, with the introduction of statutes such as the UTCCR to afford greater protection for consumers against rapacious corporations."

    To add to that you have the situation where PE are using the threat of the Small Claims Court to try and bully people into paying up. If it does get to court you then have the unequal balance between PE sending a fully qualified legal rep on one side, and the motorist/RK on the other side with no legal training . That goes against the whole ethos of the SCC which was set up to give the average person in the street the means of redressing wrongs without incurring large legal bills.

    1. "That goes against the whole ethos of the SCC which was set up to give the average person in the street the means of redressing wrongs without incurring large legal bills."

      You will find that the reason for the SCC was not to give "the average person in the street" the opportunity to go to court -- instead it was set up in order to minimise costs for the court system in dealing with (mainly money claims and other such related stuff) where a company had to incur huge costs for a proper hearing in order to get an order for a claim which was of very little value, hence blocking valuable court time and resource. So the SCC was born to help companies get judgements a lot quicker and easier.

  7. I think the crux of all this is the very first thing that needs to be considered in POE's status. If they don't have landowner rights or any right of occupation then they can't enter into a contract for the use of the land, ie exactly what PoFA "Relevant Contract" is meant to address.

    Maloney seemed to take this aboard in the Pranksters comment on how he saw this "He pointed out there was no contract for parking. It could only be a licence, if anything, and no a contract. He pointed out the contract with the landowner gave no right to grant parking, and that it explicitly stated there was no Landlord and Tenant relationship."

    Given that he already considers that there is no contract then how can PE possibly issue charges based on contract and expect to win on that basis when the whole matter is put under the most severe scrutiny it's ever faced so far.

    1. My apologies - this was bad writing by me. It was Mr Foster making these statements. I have corrected the blog to make this plain. nevertheless these points will be in front of the judge who will have to decide on them.

  8. Exactly the point that I made earlier. Facilities like free parking & toilets are offered as an incentive to lure in shoppers. Retailers would never try & pretend that the shopper enters into a contract to pee when they use the toilets.

  9. Some time ago I found myself desperately needing the toilet for a pee in a shopping complex near the London passport office. The toilets had a payment machine at the entry and I had no change and whe I say I was desperate I was struggling to hold back. Anyway, vaulted over the stile and did my business in the most disgusting toilet I've been in this side of the middle east.
    Genuine pre-estimate of loss, if ever it was taken up would be 20 pence.
    Maybe PE could set up CCTV's and send out tickets to those who dare to circumnavigate the entry payment......

  10. I'll predict that HHJ rules
    1. Licence, so not contract so claim fails.

    The interesting aspect will be of the then goes on to pass judgement on the other aspects of the case; ie even if it is a contract, do the other contract-related points [GPEOL, etc] fall or stand??

    Unlike POPLA assessors , who stop as soon as they have a single reason to allow an appeal, I feel that HHJ will actually rule on these points and give a full airing to his decisions.

    The next interesting aspect will be how much the ruling will affect other SCC cases, and whether PE will appeal.

  11. and I am wondering about Borehamwood where the time allowed was reduced from 3 hours to 2 and then reverted to 3. Will that form a defence if you get a ticket for staying 2h 30m during the 2 hour period?

    My other thought is if there is now no loss for staying 2h 30m how was there one when the time was 2 hours?

  12. PPC's are desperate to avoid their invoices being identified as penalties. If they do, then they need to pay VAT on them and of course identify this fact on said invoices. This would make their profit model less appealing of course, as any VAT payments would have to come out of their profit cap of £100 per event, meaning in theory that they lose 20% straight away. They would not be entitled to any discount as they would be paying full and not flat rate VAT.

    1. Sorry but you have completely misunderstood this point. Penalties & damages in general are not subject to VAT.

      A contractually agreed charge would be subject to VAT so regular parking charges in a Pay & Display car park are subject to VAT.

      Those PPCs that attempt to claim that the motorist agreed a contractual charge of say £100 for the privilege of obstructing a fire exit or parking outside a marked bay should be paying VAT on these charges as they are providing a service.

    2. Please see

      Car Park Charges
      If the contract under which car parking is supplied allows for an extension of the original terms, for which additional consideration is payable, the liability of this consideration follows that of the original supply. However, where a car park operator makes an offer of parking under clear terms and conditions, setting punitive fines for their breach, the fines constitute penalties for breaching the contract, rather than additional consideration for using the facilities. Consequently, they are outside the scope of VAT.

  13. ny news on this case yet? I posted a comment in the morning blog about this case regarding Parking Eye's failure to protect disabled parking bays (contradicting the evidence they gave in the morning) and their failure to ensure access for emergency vehicles. I am keen to receive a response if possible

    1. 2 weeks are now up so the reply is due any time from now until the next two weeks

    2. Many thanks for your swift response- I look forward to finding out what happens next. I can't thank you enough for all you are doing. I learned today that Parking Eye have agreed to cancel my parking charge following my successful appeal (based on what I have learned here and on MSE). Cheers!

  14. I'm taking a shot at the decision here.
    It's my guess that HHJ Maloney will be aware of the PoFA requirements for bringing a case against a registered keeper, which is what I presume to be the situation here.

    If he doesn't know of PoFA and brings a decision which goes to PE then that would of course lay open a further appeal where that very single issue could be addressed. It would also show some lack of legal knowledge which is something he'll be very keen to avoid having scrutinised in a High Court.

    So, given that he will need to address the PoFA requirements, the first stumbling block would be lack of a Relevant Contract. PE is neither the landowner or has a contract from the landowner to enter into contracts with drivers in its own name. As it says on their signs, it is solely engaged to provide a traffic maximisation scheme.

    There is no authority in that to take any single action but only to operate on behalf of the landowner. So in this case PE are not entitled to take independent action. The Landowner would need to start their own action, for trespass if it incurred a loss or for other proven loss for an overstay.

    That's fail point 1.

    If HHJ goes through all the other aspects he will take note of the amount charged. Even though PE would by this stage have been found not to be the correct party taking action, he can still comment on the charges and I believe he will do so, unequivocally taking the stance that they are operating a system which provides no consideration as required by the UTCCR. Nothing is offered especially since PE aren't in a position to offer the use of the car park anyway and not having the required contract or landowner rights.

    Their business model is not providing any consumer service as such and only goes to penalise those who are deemed to have broken a legally unenforceable contract. Their source of income is not in the provision of a service but from a breach of an implied contract. It's an unsustainable business model. If everyone who got a ticket refused to pay except for one person, that person could not be expected to have to pay for the so-called loss of each other non paying “offender”.

    A genuine pre-estimate of costs cannot possibly be used to ascertain what a loss may be for any incident. It should be a known loss from the incident that is before him in any single hearing.

    He will pick out the normal operating costs as being ordinary business costs such as any business would incur and deride PE for bringing them in as part of a genuine pre-estimate of loss.

    He will make known that it is not for him to decide upon the legitimacy of parking matters and their operational characteristics. He has to apply law which is known and understood at the present. Any consideration of how the parking industry operates is best taken up at a Judicial Review where their Lordships can interpret matters better than a county court and apply the intention of the law as well as the actual drafted legislation.

    He will give clear indication that he dislikes the business model and even though he has found against PE will allow them to take an appeal higher as he understands that their substantive business model relies heavily on the result.

    He will place on hold all further cases in his District until such time as PE take advice on how best to proceed or until they make known they will not go to appeal.
    Personally I do hope they go to appeal as this could have massive implications from a Judicial Review or Crown Court finding

  15. I believe that this case is one where he can tackle the ongoing flood of actions in his, and other courts too.
    He may well be a bit miffed at the time PE are taking up of court time and them clogging up the court system. He will seek to alleviate this problem.

    Allowing PE's action will just make a pathway for other cases, all of which would still have to be heard as each of them will be independent of the findings on any other single case already heard. So the roundabout keeps turning.

    If he does allow the claim then it's more than likely that the case will end there as the costs on a person would be prohibitive to take it to the Supreme Court.

    He will be fully aware though, that if he finds against PE then they will be more likely to go to appeal; something I believe HHJ would like to see before the Supreme Court for a definitive and binding result nationwide.

    Anything less still leaves the field open for a continuance of the court cases going through the system. The refusal of PE's claim would be well substantiated in law. The reasons for disallowing it are many so his own professional and legal standing would be in no doubt.

    He would have passed on a case for appeal knowing that his decision, even if judged to be wrong, could not be criticised.

    Anything less a situation which brought an appeal would be satisfactory in this case.