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