Thursday, 6 August 2015

Case of the Century

Journalist, Author and Radio Presenter Martin Kelner has reported the parking 'Case of the Century' on his blog. Mr Kelner paid for a ticket, but did not enter his registration correctly. Here, The Prankster analyses some of the legal issues.

The Prankster does not have a copy of the actual signage on site and so his analysis may well be flawed. As Mr Kelner reports the car park is run by Excel Parking the analysis will be based on the signage Excel use in the majority of car parks known to The Prankster.

Here is one from The Peel Centre. As you can see, it a mess of tiny writing and numerous conditions.

The first question Mr Kelner asks is, is it possible to enter into a contract, signing nothing and reading nothing? The answer is that it is, and there are a number of instances of case law which make that clear. As long as the signage is visible, and frequent enough that the motorist is expected to spot it, then the motorist is also expected to read it, and either agree to the contract by remaining parked, or leave. This is called acceptance by 'performance'.

In Mr Kelner's case he purchased a ticket (which would also be acceptance of the contact) and if there was a sign such as the above by the ticket machine, then these would be the terms and conditions. Mr Kelner has therefore entered into a contact with Excel Parking.

However, the parking charge he later received came from Vehicle Control Services. Now, some companies provide services for Parking Companies. Here is a Notice to Owner from Parking Collection Services. Note that they specifically state they are collecting on behalf of AM Parking Services.

Now, The Prankster has not seen the actual parking charge issued by Vehicle Control Services, but he has seen a fair number. Unless it specifically states they are collecting the charge on behalf of Excel, Mr Kelner would be entitled to believe some kind of scam was happening and contest the charge on that basis. After all, if he paid VCS there would be nothing to stop Excel contacting him later and asking for the parking charge, stating that VCS have nothing to do with them.

One point of interest which is not relevant in this particular case is the Protection of Freedoms Act (POFA) 2012, which makes keepers liable for parking charges on private land in certain circumstances. As Mr Kelner has already written in apparently admitting to be the driver this would not apply.

However, if the driver had not been the keeper then this would come into play. VCS do not currently use POFA 2012 and their parking charge notices are not compliant with the act. The keeper could therefore have written to VCS, stating they were not the driver, and that would have discharged their liability. They are under no obligation to state who the driver was. (This would NOT APPLY if the notice was POFA 2012 compliant)

The next point of interest is the requirement to 'enter the FULL and ACCURATE REGISTRATION NUMBER of the vehicle'. As Mr Kelner did not, he has broken the terms of the contract. You, the reader, probably did not know that was a term because it is in the small print of the signage earlier in the blog. However, it is there, and is the first term, top right.

But this then brings us to Lord Denning's so called 'Red Hand Rule'. If onerous terms are included they must be made plain, not hidden away in the small print. As this is an onerous term hidden in the small print, there is a case that it is not enforceable.

The Unfair Terms in Consumer Contract Regulations 1999 also comes into play. We must first decide if this is a core term of the contract - it appears it is not, and that the core terms are the price per hour. This then appears to be an unfair term; the test, according to European Law, is whether the consumer, if they had a solicitor to argue their case, would have agreed to the term. If this is the case then this particular term can be found to be unfair, struck out, and the contract continues without the term. Thus, no extra charge is payable.

We must now revisit whether the contract was accepted or not. For a contact to be in place there must be a meeting of minds. Mr Kelner clearly did not expect to have to enter his correct registration or he would have done so. So it is arguable that no contract was in place. In such cases, he would be a trespasser, and liable to make good any losses to the landowner. As he paid his parking charge, there are no losses.

Excel Parking accepted Mr Kelner's money and therefore it is arguable that they accepted the contract anyway, on Mr Kelner's terms. When this happens in business cases this is know as the 'battle of the forms' and the contract may be deemed accepted on the basis of the last proposed terms. Excel accepted the contract knowing the numberplate was invalid - after all, the ANPR system knew that the vehicle with the entered registration was not in the car park. They could therefore have refused to accept Mr Kelner's money, but did not.

The reputable parking companies have ticket machines that do exactly that - only accept valid registrations. Some will even show you a picture of your car. The bottom-feeders of course, eschew this technology because it cuts down on the amount of parking charges they can issue - large numbers of motorists get their numberplate wrong, transposing digits, entering 'O' instead of '0', or simply forgetting which car they were in.

We now look at the amount of the parking charge, £100. parking charges can be issued for three broad reasons; trespass, breach of contract or a contractual charge. Thus charge is for a breach of the terms and conditions and is therefore for a breach of contract.

There is extensive case law which establishes that a charge for breach of contract must be a genuine pre-estimate of loss. If it is much larger then it is a penaly, and unenforceable. There must be an initial loss, and reasonable charges following up that loss can also be charged. For instance, to get Mr Kelner;s address, the parking company must pay £2.50 to the DVLA, and then post him a letter costing about 0.50p.

However, in this case there is no apparent initial loss as Mr Kelner paid for his ticket. The parking company can also look up their records, and detect that a ticket was paid for at the time of Mr Kelner's entry, that it did not match with any other vehicle, and that it covered the period his vehicle stayed. Any reasonable company would therefore conclude that no harm has been done.

In any case, Excel have filed a large number of calculations of their pre-estimate of loss over the last few years, which establishes their average cost per ticket issues is somewhere between £10-£20. Therefore the sum of £100 is a penalty.

Excel are also under a duty to mitigate their losses. Mr Kelner, having written in and explained the situation, they could make him an offer to settle at their current costs, being the £2.50 DVLA fee, 50p postage and perhaps some other small amount. After all, their signage does give them this option; "Please be advised that correctly issued parking charges notices which are subsequently cancelled will attract a £10 fee".

So, can the £100 charge be saved by legal arguments?

The highest case law on this is ParkingEye v Beavis, heard at the Court of Appeal. The case has since been appealed to the Supreme Court* and judgment is expected to be some time in October. For now then, the highest case law is the Court of Appeal judgment.

The Beavis judgment does not rule all parking charges for all companies in all situations to be valid. The Prankster has already reported on the case of Pace Recovery and Storage T/A Ace Security v 2 defendants, Claim B04YJ644. The parking company discontinued the case because the Beavis judgment ruled their position untenable.

An analysis of the Beavis judgment shows the Court of Appeal laid down the following guidelines; where a charge for breach of contract is substantially more than a genuine pre-estimate of loss, it can nevertheless be saved if the following conditions apply:
a) There is social justification for the charge
b) The charge is no more than that needed for a deterrent
In Beavis, the car park served a retail complex and provided 2 hours free parking. There was social justification because the car park was near a train station and would otherwise be abused; the retailers had a need for turnover of customers; motorists had a need to find a free parking space. None of these apply in this case. There would appear to be little social justification for issuing a charge when the motorist has already paid and simply enters their number incorrectly.

In Beavis the charge was in line with council charges and as council charges are a proven deterrent this was sufficient to deter. In this case, the relevant council charge in Warrington is £25/£50 and therefore the charge of £100 is clearly extravagant or unconscionable, being twice the amount needed.

At this point the Unfair Terms in Consumer Contract Regulations 1999 comes into play again, and according to the Beavis judgment, as the charge level is again not in line with council charges in the area, it is an unfair term and can be struck out.

It appears therefore that there are plenty of grounds for Mr Kelner to successfully challenge the charge.

Lastly, The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 came into play in 2014. (This was after the Beavis case parking date, so this legislation was not considered by the Supreme Court). This contract is clearly a distance contract because the parties involved never meet directly, and communication occurs remotely (via the signage). The information required by these regulations is not present on the signage, and therefore the contract is not binding, according to the regulations...

...except that there is an exemption for parking ticket machines. This is not cast in stone, but is present in the guidance note to the regulations, and therefore would need a strong argument to counter.

If Mr Kelner had purchased a ticket via mobile phone or the web then these regulations would apply, as it would if it were a free car park with not tickets needed. The contract would then not be binding and no charge could be enforced.

Happy Parking

The Parking Prankster

*Presumably this is the second case of the century.


  1. Interesting analysis.

    Few points that I would make however:

    Denning's Red Hand Rule related to clauses that purported to exclude liability for negligence resulting in death/personal injury. These terms are clearly onerous and are now unenforceable as a result of the UCTA 1977. Asking someone to input their vehicle registration correctly is not even close to onerous.

    I agree that the UTCCR would likely have some application, though am far from certain the courts would find in favour of the motorist - it will be interesting to see the approach taken by the SC toward the UTCCR here.

    I'm also afraid I don't see how the 'battle of the forms' applies - Mr Kelner hasn't made an offer containing any terms to Excel. The battle of the forms occurs where two parties each try to contract on their own (usually) standard T&C's and these are later found to conflict. It does require that each party has actually had sight of these terms at the time of contracting however. In this case only one offer has been made, and this was accepted through conduct. You can't introduce terms at a later date that weren't brought to the attention of the other party.

    Finally, I would personally disagree that this contract is a distance contract under the CCR 2013. There is no method of 'distance communication' (by telephone, the internet etc.) involved in the formation of the contract. Both offer and acceptance take place at the 'business premises' (as defined in the Act) of the trader, and it would therefore most likely be an on-premises contract.

    Most of the above is academic however. Even if the CoA decision in Beavis is upheld it is highly unlikely that this particular charge would be enforced by the courts. As you rightly note there is no 'social justification' angle at play - Mr Kelner had paid for his ticket. The amount demanded would, therefore, be extravagant in the circumstances and Excel would only be entitled to a GPEOL resulting from the breach.

    1. This is a common misconception amongst people who have not read the legislation carefully. The definition of a distance contract does not include any reference to the 'business premesis'. It it solely concerned with whether the consumer and trader are physically present in the same place. There is of course a method of distance communication involved, otherwise the trader cannot communicate the contract to the consumer. This is acheived through signage. This is conceptually a similar method of distance communication used by spies - aka dead drop.

    2. My issue is with construing signage as distance communication. A distance contract requires two things: that there is not the simultaneous physical presence of the trader and the consumer AND that there is a form of distance communication used. It does not necessarily follow that if consumer and trader are not both present at the same time, there must be distance communication.

      If that were the case, there would be no need for the legislation to continue by stating “with the exclusive use of one or more means of distance communication”. Stating that distance contracts were ones concluded without the simultaneous physical presence of the consumer and trader would have been sufficient.

      To take one example, a number of supermarkets now operate petrol stations which are ‘Pay at Pump Only’. There is no ‘simultaneous physical presence’ of trader and consumer. Do they need to provide copies of all the information required by Schedule 2 by the pumps? It seems highly unlikely. Where the offer is made (by signage) on business premises, and the acceptance also made on the business premises, I would argue that the proper interpretation is that an on-premises contract has been concluded.

      In truth the wording of the legislation doesn’t fit entirely neatly with either argument, and I am entirely prepared to concede that I may be very wrong on this point. This is largely a result of the fact that the clear focus of this legislation in relation to distance contracts was on online sales, not the strained contractual arrangement relied on in parking.

      Did you have any comments on the other observations that were made which were unrelated to the CCR 2013?

    3. I would agree that the wording of the legislation is unclear and is crying out for either clarification or case law. However, the protections afforded by the act are I would argue, clearly exactly the ones needed in car parking situations. The consumer should be informed about codes of practice, appeal rights and the various other requirements of the act.

      Regarding the battle of the forms, Mr Kelsner made his offer, which was accepted by Excel.

      I disagree that the requirement to enter your vin or face a charge of £100 is not unreasonable; it is not as unreasonable as some others of course. The more unreasonable it is, the more notice has to be give.

  2. All of the above is very interesting, but the whole scam falls apart on basic principles. The signage is in the name of Excel Parking Services, who are a party to the contract. The letter was from Vehicle Control Services (VCS) who are a separate legal entity with a different company registration number, even though both companies' profits go to Simon Renshaw-Smith's slush fund.

    VCS have no locus in the matter, and no basis on which to litigate.

    1. But that does not preclude Excel from litigating in their own name? They are not relying on POFA, so there is no need to send any correspondence at all, let alone a compliant NTK naming the creditor.

    2. Edit: Any correspondence preceding an LBA that is

    3. Presumably the ATA would step in in the operators started to bypass the Notice to Keeper stage and go straight to an LBA...

      ...oh wait, they are members of the IPC. Anything goes then.

    4. LOL. Checking my records some members of the IPC DO go straight to the LBC stage; they wrap up the NTK and LBC in the same letter.

    5. Strictly as a matter of law, if they know who was driving there is no need to issue an NTK at all. They can go straight to LBA stage. Breach of the Code of Practice is breach of soft law and a matter for the respective ATA to deal with (or not) themselves. The courts won't care.

  3. On the notice to owner letter it states on left hand side the reason for letter is for "failure to display a valid permit". This is not one of the conditions mentioned mentioned on the signage for a charge being enforced. so could Mr. Kelner argue that the term and conditions he has breached on the letter is not one of the terms and conditions on signage?

  4. This comment has been removed by the author.

    1. Sorry should have said right hand side of letter

    2. This comment has been removed by the author.

  5. What's the betting that this would never go to court with such a high profile defendant? I don't think that VCS/Excel would like the adverse publicity.