Before the Protection of Freedoms Act 2012 the parking industry was causing a lot of government concern due to rogue clamping operations. Parking charges were whatever the clampers could get away with and ticketing was no better, with a maximum recommended charge of £150.
The government decided to stop rogue clampers; the parking industry replied that there would then be no protection for landowners - as only the driver was liable, everybody would just deny being the driver. The government agreed to make keepers liable for parking charges, as long as more regulation was introduced.
The British Parking Association tightened up their code of practice, and one aspect was to decide just how large a parking charge they could get away with. This was decided in a meeting on 6th June 2012 which is online here. As is evident from the minutes, although lip service was paid to the requirement that a charge for breach of contract "must be a genuine pre-estimate of loss" (P4), the three factors for recommending a £100 cap (P7) were nothing to do with actual costs. A mandatory early payment discount of 40% was required in order to "discourage frivolous appeals" (p4); again, nothing to do with actual costs. A large number of operator comments (P9, P10) showed that in many cases parking charge levels had nothing to do with actual costs.
The Protection Of Freedoms Act 2012, schedule 4, went live on 1 October 2012. Government guidelines on the Act stated:
Charges for breaking a parking contract must be reasonable and a genuine preestimate of loss. This means charges must compensate the landholder only for the loss they are likely to suffer because the parking contract has been broken. For example, to cover the unpaid charges and the administrative costs associated with issuing the ticket to recover the charges. Charges may not be set at higher levels than necessary to recover business losses and the intention should not be to penalise the driver.The British Parking Association Code of Practice agreed with this.
19.5 If the parking charge that the driver is being asked to pay is for a breach of contract or act of trespass, this charge must be based on the genuine pre-estimate of loss thatThe Elephant in the Room
you suffer. We would not expect this amount to be more than £100. If the charge is more than this, operators must be able to justify the amount in advance.
The big problem was that few parking operators had actually set charges by assessing their genuine pre-estimate of loss - many had just set them to the maximum level they thought they could get away with.
POPLA, the independent appeals body, provided a sharp wake up call to the parking industry when motorists started contesting parking charges. As the operators could not justify the charge levels, the appeals were upheld.
ParkingEye's early attempts (May 2013) to justify the charge was admit there was no loss at all to them:
The amount charged represents an average loss to Rheidol Retail ParkOf course, as there was no loss to them at all, the appeal was upheld. It would be a long time before they would admit there was no loss to them again - the ParkingEye v Beavis case. ParkingEye's document did continue a trend though - one of lying to POPLA and the courts. The attempt to pretend Rheidol Retail park suffered any loss whatsoever from shoppers overstaying was a blatant lie which has never been backed by any evidence whatsoever.
ParkingEye's other attempt to justify their charge was to pretend that their costs per ticket issued were rather large.
They also seemed to be unaware of exactly how much their costs were - in Barry Beavis's case ParkingEye at various times claimed their costs were both £53 and £55.
An analysis of ParkingEye's accounts showed that ParkingEye were regularly perjuring themselves in court. Their costs could not possibly be that much. Their average cost per ticket issued could be a maximum of £18, and was probably much less.
Despite their lies, ParkingEye's charges were still rejected by POPLA because they never provided a breakdown of their costs - of course, this was because their costs did not add up to the charge and so they could not. Instead, their document justifying their charges grew from a 5 page document into an 8 page filibuster by May 2014, containing filleted extracts from court cases they had won (remember, in all of these cases they perjured themselves by lying to the court) and fictitious statements, such as their charges had been approved by the DVLA and the Office of Fair Trading. FoI requests to those bodies revealed that ParkingEye were perjuring themselves once again. ParkingEye also lied in that they made a loss on some charges if they were paid at a discount. It is difficult to see how they could keep a straight face when stating they made a loss if they were paid £50, when the costs incurred were a £2.50 DVLA fee, and 50p postage.
Only one paragraph of the filibuster was relevant, in that it actually detailed their heads of cost.
Other Parking Companies
ParkingEye were not the only parking company with this problem of course. Most other parking companies needed to lie to POPLA and the courts to justify their charges. Some were quite outrageous in their lies. Excel Parking, for instance produced different breakdowns almost every month. When POPLA rejected each one, they would brazenly submit a completely different breakdown the next time.
Sometimes a parking company would win a POPLA appeal when a new POPLA assessor made a mistake because they did not yet understand GPEOL. Magically, large numbers of parking companies would then produce identical breakdowns, and would all be hopping mad when the flaws were pointed out and subsequent appeals upheld.
The lead assessor of POPLA, Henry Greenslade, decided to publish a document explaining to parking companies in general terms what was, and was not an allowable head of cost. In a respectable industry, the parking companies would have taken his comments on board and lowered their parking charges until they matched the costs he listed. Sadly, they took a different approach and artificially inflated those heads of costs Mr Geenslade listed to match the level of their charges. They were quite blatant about this, and were happy to submit evidence to POPLA with quite different values for the same heads of costs submitted previously.
The British Parking Association ran courses for parking operators on how to fudge their evidence to get appeals rejected by POPLA. Although members of the public asked to attend the course to ensure fair play, they were refused. The DVLA were asked by motorists to attend, but declined. Hear no evil. It was notable that following the courses the number of fake pre-estimate of loss calculations submitted to POPLA proliferated, but as they were all based on false premises it did the operators no good, and the charges were rejected.
The industry was now in turmoil. For two years parking charges had been proven time and again to not be a genuine pre-estimate of loss, and pressure was growing for the DVLA, Trading Standards and other bodies to take action to curb the rogue practices. The DVLA resisted this - they were raking in huge amounts of cash from the parking companies, and the bonuses of senior members of staff depended on not rocking the boat.
A solution had to be found. If the levels of parking charge could not be justified by law, then the law had to change.
An opportunity finally arose when a senior judge, HHJ Moloney, became alarmed at the number of parking cases in his jurisdiction. Although the BPA had promised government that POFA 2012 would cut the number of parking cases going to court and save the Ministry of Justice money, in fact it had the opposite effect and cases increased from 845 in 2011 to 35,000 in 2014.
HHJ Moloney stated he wanted to find a way of striking out motorist's claims so that judges could automatically rule for parking companies and clear the court backlog and so he arranged a test case, for 2 simultaneous claims; ParkingEye v Beavis and Wardley.
ParkingEye engaged Jonathan Kirk QC to represent them. He was unable to attend the first hearing, but luckily for ParkingEye somebody made a hoax phone call and the first hearing was stayed. The hoaxer had intimate information about the case, enough to fool ParkingEye's substitute counsel ('that David Altaras') that he was ParkingEye's employee Alex Cooke. HHJ Moloney ordered a police investigation into the hoax call. The Prankster has been informed that the phone used to make the call was traced and was purchased using the credit card of a senior ParkingEye employee. The employee was captured on video in the shop. However The Prankster has been unable to verify this and calls on ParkingEye to make public the police report to clear the air. As Jonathan Kirk's chambers were involved in helping ParkingEye employees investigated by police in this affair, The Prankster alternatively calls on Jonathan Kirk's chambers to come clean.
In the next hearing, Jonathan Kirk wisely decided not to perjure himself and instead of trying to claim ParkingEye's costs were £85 per ticket, he admitted they made no loss at all. In order to justify the charge, he therefore claimed 'commercial justification', a meaningless phrase that can be used to justify anything.
As a side issue, Jonathan Kirk QC also presented an over-redacted contract to the judge which hid the fact that ParkingEye were acting as agents. This resulted in the judge incorrectly ruling ParkingEye were acting as principal and so upholding the charge against Mr Wardley, even though the true principal had ordered ParkingEye to drop the charge.
Meanwhile, back with commercial justification, never before had this been used in consumer contracts where the contact was imposed on the consumer- only in situations where highly qualified lawyers for each party had equal bargaining powers. Commercial justification cases were also generally about small extra amounts, such as a 1.5% bank charge. They had never been used to justify the entire amount. Nevertheless, this was the only argument put forward by the claimant and so HHJ Moloney was forced to accept it if he wanted to clear the court backlog. He ruled that the charge was a deterrent and a penalty, but that it was commercially justified nevertheless.
Mr Wardley decided not to appeal, but Mr Beavis did, and he was fast tracked to the court of appeal, missing out the small claims appeal stage.
If ParkingEye expected things to change they were in for a disappointment. POPLA still rejected all their claims because the Moloney judgment was a small claims case and not binding. ParkingEye had more success in court, where a number of judges did not look too closely at Moloney's reasoning and rubber stamped cases through for ParkingEye. Others were more sceptical and stayed cases to await the Court of Appeal verdict.
The Court of Appeal recognised the flaws in Moloney's reasoning, and quietly retired the commercial justification reasoning. However, they swallowed Jonathan Kirk's assertions that problems would arise if ParkingEye were not present hook, line and sinker, even though absolutely no evidence was presented to support this. They invented a new category of allowable penalty, social justification.
Troubled by their own decision, they instantly granted leave to appeal to the Supreme Court, something which is quite rare. Mr Beavis raised the necessary £6,000+ using crowdfunding in one day, which brings us to where we are now.
The Prankster has shown that Mr Kirk's arguments are deeply flawed, often have no basis in fact, and have no evidence to support the more outrageous assertions. Carmageddon beckons? Not.
The question now is whether the Supreme Court will agree or not; whether a deterrent can be set to an arbitrary level, even though a lower level has been proved to work; what level of profit should the courts allow in a 'pre-estimate of loss'? It should be noted that ParkingEye's projected profits for last year are over 30%, and these are entirely funded by parking charges, although they are not officially due to be revealed until September.
What will the Supreme Court rule? Time will tell.
The Parking Prankster
Moloney's attempt to cut court lists failed and there are now more hearings than ever before due to the law of unintended consequences. If the Supreme Court rule in ParkingEye's favour we can expect even more clams; a feeding frenzy of claims going back 6 years would not be out of the question.