How to legally deceive the Supreme Court

The Prankster analyses the submissions by ParkingEye's counsel, Jonathan Kirk QC.

The Prankster has never been to the Supreme Court before and concludes from what he has seen that the job of a QC is to misrepresent the true situation, attempt to justify conclusions without any basis in fact, and to present partial information when the the whole gives a completely different picture.

The Prankster imagines how it would have gone if ParkingEye had employed Jim Carrey from the file Liar, Liar.

Page 101 to 131  

Submissions by MR KIRK

MR KIRK: My Lord, can I start by, forgive me, dealing with the structural questions which is whether this is effectively a contractual term or a matter of breach. I would prefer to deal with that in writing.
LORD NEUBERGER: Very well.

Redefining the charge as contractual would potentially bankrupt ParkingEye. Contractual charges attract VAT, whereas charges for breach of contract do not. ParkingEye states at the initial hearing they make a 7% profit. VAT will turn that into a 13% loss, backdated to when they started, and with financial penalties. Therefore it is not likely either party would welcome the contract being re-interpreted.

In any case the Unfair Terms in Consumer Contract Regulations 1999, regulation 7 provides that if a term is ambiguous, it is to be resolved in favour of the consumer. If  of the best legal brains in the country cannot immediately agree on the nature of the contract, the term is clearly ambiguous.

MR KIRK: And deal with the other questions that arise as a consequence, but I accept that, if it is rightly construed as a term of the contract, that the penalties doctrine has no application and it is likely, subject to the question of intelligibility to fall outside the exception for the adequacy of price in relation to the regulations. Can I start with our position in relation to the doctrine of penalties. We don't ask the court to overrule the penalties doctrine and we obviously approach it on the basis of the more flexible approach reflected in the Court of Appeal's judgment. And in relation to that, it is important to consider the two words "Extravagant" and "Unconscionable" words that are perhaps not in modern usage. It has been expressed that this is not really the language of 21st century English. The question, the first question to address is how were they used in the main case that we have considered from which they came? So, that is Clydebank. If I could ask your Lordships to turn in the main authorities bundle, A, to divider 5, which is the Clydebank case, 851.
LORD NEUBERGER: You will appreciate that we have looked at this more than once in the past few days.
MR KIRK: I appreciate and the purpose is not really to deal with any detail, it is simply to provide the platform upon which I am going to give --
LORD NEUBERGER: Unconscionable and extravagant, 851, yes.
MR KIRK: At 851 we are dealing with the Lord Chancellor's speech. He uses "Unconscionable and extravagant" in the middle paragraph, "Extravagant or unconscionable" in the next paragraph, "Unconscionable or not" in the paragraph after that. And it is clear, if we turn forward to page 858, in the speech of Lord Davey and I will read this passage: "But of course the question whether it is exorbitant or unconscionable is to be considered with reference to the point of time at which the stipulation is made between the parties. That is to say you are to consider whether it is extravagant, exorbitant or unconscionable." I think at some point he goes on to say it doesn't matter which word.
LORD CARNWATH: The following words: "Whatever word you would like to select."
MR KIRK: I am obliged. The question arises, whether you are going to assess whether a term meets a particular test. What does that test really mean? The word extravagant in ordinary English usage, we say, means something akin to far more than is necessary. The word exorbitant, manifestly or grossly excessive mean effectively the same thing. That much is not so difficult to determine from the case law. The question really is what is meant by unconscionable? Not a modern word. How do we address the meaning of unconscionable in the 21st century? So, I would ask that your Lordships turn back to the First National Bank case and to the very famous test of Lord Bingham. Which is found at 7127 in bundle H. It is only where Lord Bingham looks back at good faith, and it is the passage in within the highlighted text that reads: "Good faith in this context is not an artificial or technical concept, nor since Lord Mansfield was its champion is it a concept wholly unfamiliar to British lawyers. It looks to good standards of commercial mortality and practice." We say that, effectively, that is what is meant here. We say that if you combine extravagant and unconscionable, you are really looking at one concept. That is effectively this question: was the amount so large that you would not be acting in good faith to make somebody pay it? In relation to that question, the test is really one which you have to consider all of the relevant circumstances. There are two approaches that have developed or there is one approach that has developed since the Dunlop case. The rigid mechanical approach as it was referred to by Professor Baron and that approach seemed to have, seemed to predominant to sues that word again, up until the commercial justification cases. Our submission is that in relation to the origin of the doctrine, you need to look at when the amount is extravagant and unconscionable and in relation to that to consider all of the relevant circumstances, not simply the question of whether the stipulated amount is greater than the recoverable loss in any particular.

The value question here, the battle ground here, in relation to this particular contract is whether, when you have a situation where there is no recoverable loss, there can ever be, the stipulated amount that is not a penalty. So, the question that arises at the forefront of all of this is whether there can ever be a situation where other interests, non-financial interests, or whether financial interests that are indirect, are sufficient to allow the clause to stand. 

As the Court of Appeal pointed out, this problem can be easily resolved, and there would therefore be no need to change the law. ParkingEye could have in their contract with the landowner a clause which penalises them if overstays occur. This then creates an initial recoverable loss, to which they could add the costs of recovering that loss. 

MR KIRK: There are four potential interests here: the first is the company, the respondent's companies' interest in keeping their contract.

An interesting conjecture, which surely fails the test of remoteness. There have been no known instances where ParkingEye have been sacked for failing to collect parking charges. There have been plenty of cases where ParkingEye have been sacked for over aggressive collection, including ParkingEye v Somerfield, where the landowner had to cough up £300,000 for the privilege of ditching ParkingEye.

LORD NEUBERGER: Yes.
MR KIRK: The second is their reputation, if they allow people to abuse the car park, et cetera.

But of course ParkingEye enforce using ANPR at this car park. There is no manned patrol. There is therefore nothing to stop people parking over marked lines or parking in disabled bays without blue badges. Why would their reputation suffer for one type of  contravention but not another?

LORD NEUBERGER: Yes.
MR KIRK: Then there are two which are more remote. There is the potential landowner's interest, despite the fact that we accept that he is not privy to the contract between the parking company and the consumer.

In the original trial hearing there were two defendants - Beavis and Wardley. The landowner asked ParkingEye to cancel Mr Wardley's ticket but they refused. There is therefore no evidence that the landowner wants all charges enforced. On the contrary, ParkingEye appear to be acting in defiance of the landowner's best interests.

And the fourth, which is, I suppose, the most remote is the overarching interest of people who use the car park, who are obviously third parties, the public, the public interest. 

There is no evidence the public benefit from the parking regulations. They may of course, but this is just conjecture. There is an almost identical car park in Bristol, owned by the same landowner, managed by the same agent, also serving a retail park. It is also in the centre of town, a similar distance from the station. This car park is free and has no regulations. Yet there are no parking problems and always plenty of free spaces.

The landowner tried to introduce ANPR and a maximum stay but the retailers rejected this as it would be bad for business.

An equally valid analysis of the situation, given the lack of evidence submitted by either side, is that the cameras are introduced as a clever way to monetise a free car park, gneerate £1000 a week for the landowner and more for the parking company. This would be to the detriment of motorists and retailers.

The question that arises in this case is whether those interests are justification for the imposition of a stipulated amount that is not extravagant or unconscionable.

No one is arguing that car park management is not needed in all cases. However, there has been no evidence submitted it was needed in this case. And the level of charge we will see later is clearly extravagant to that actually needed.

LORD NEUBERGER: Is that a convenient moment?
MR KIRK: It is my Lord.
LORD NEUBERGER: Thank you very much. We will resume again at 2.00 pm. The court is now adjourned.

 The Luncheon Adjournment

MR KIRK: My Lords, can I start now by looking at one of the factors that we say is important under both your consideration of the penalties doctrine and also in relation to unfair terms, that is the policy behind the legislation. It has been a matter of discussion earlier. I am now looking back at the Protection of Freedoms Act which is in consumer authorities bundle J, divider 4, and 7309 in the electronic bundle.
LORD NEUBERGER: What page, I beg your pardon?
MR KIRK: 7309.
LORD NEUBERGER: Thank you very much. I have it, yes.

MR KIRK: And we can see that chapter 2, "Vehicles left on land", is the second chapter in part 3, which is entitled protection of property from disproportionate enforcement action. If I ask them that we turn to the criminal offence, which is at 7315, section 54.
LORD NEUBERGER: Yes?
MR KIRK: It is not only made an offence to immobilise or clamp a motor vehicle, but it is made an offence to remove or restrict the movement of such a vehicle by any means. So effectively, a private landowner cannot clamp, cannot tow, cannot move a motor vehicle.
LORD NEUBERGER: Yes, we have the point.
MR KIRK: There is an exception for barrier car parks in section 54.3, but that is not the point I need to make at this stage.
LORD NEUBERGER: Yes.
MR KIRK: If we turn over the page to sections 55 and 56.
LORD NEUBERGER: Yes.
MR KIRK: They are described as alternative remedies in relation to vehicles left on land. Section 55 provides an extension of what were police and local authority powers to remove vehicles from public land and it extends that right over private land. So, effectively the police and/or local authority and several other public bodies have a residual right to remove vehicles that are dangerously parked.
LORD NEUBERGER: Yes.
MR KIRK: The point we make is this, and it is a very simple one, whether you frame the parking charge in contractual terms, whether it is framed in breach of contract, whether it is framed in trespass, if you are only entitled to charge the market rate for car parking, then that will simply not deter.

This is of course, is not true. The parking company can use a contractual term to set a market rate which will deter. This is well-established in other car parks which have a graded charge so the hourly rate becomes more expensive the longer you stay.

There are two nearby car parks, a council car park and a private car park which charge around £5 a day to park. Thus, a rate of free parking for 2 hours but £10 a day after that will drive the desired consumer behaviour. ParkingEye themselves use this model at service stations, where they charge nothing for 2 hours, then around £12 a day after that.

If that works for them in those car parks, why is ParkingEye arguing it does not work in this car park.

Similarly with breach of contract; if ParkingEye were able to establish an initial loss (see earlier for how they could easily do that), then their average enforcement costs per ticket issued were established in the trial hearing as £18 ticket. This amount would be a genuine pre-estimate of loss and therefore not a penalty - as we have just seen, this is more than enough to drive consumer behaviour.

And so, you can glean from that, we say, the policy behind this was to replace a system of self-help with a system of charging for parking in a way that is unauthorised.
LORD MANCE: Why do you assume that this scheme is intended to promote deterrent schemes of parking?

The government guidance to the scheme expects that the charge would be limited to a genuine pre-estimate of loss."Charges for breaking a parking contract must be reasonable and a genuine preestimate of loss"

MR KIRK: Because, my Lord, if you were limited to charging the rate that, for example, the multistory nearby charge, so a rate that you might expect to pay in a city centre, and that was the limit, you could do no more, then everybody's private land would be the subject of, effectively, a right to park where you could park and simply pay a small market rate for doing so.

This is of course, untrue. Different car parks can charge different rates, and these can be manipulated to drive consumer behaviour. A large range of strategies are available to manage car parks which this blasé statement simply ignores.

That cannot have been the policy behind this legislation. If it was the policy then it would have been very easy for Parliament to stipulate that.

And indeed, they did make their intentions clear in the guidelines, as seen earlier.

Since then, they have reiterated their position, both in regard to parking at hospitals, and rogue parking operators in general.

So, we say that whatever the mechanism, that policy is a factor that ought to be considered when one considers all of the circumstances under both penalties and under the regulations. Can I turn to the regulations now. I want to make my submissions by reference structurally to seven questions that arise. They arise both under the regulations and under the penalties doctrine. I want to compare and contrast those seven points. I should say that the 1999 regulations have or are soon to be replaced by the provisions in the Consumer Rights Act, although they are not yet in force and the wording has changed very slightly, particularly in relation to the definition of core terms. But I am going to come to that in due course. I am going to work, in fact, rather than taking the domestic implementation provisions, from the directive if that assists. That directive can be found in the same divider at 7301.
LORD NEUBERGER: Thank you. Yes.
MR KIRK: My Lords, I do not have time to go through the background to the directive, but I will simply say that it is a minimal harmonisation directive. So, it is no part of my submission that the consumer protection afforded by penalties may not exceed the protections afforded in the directive. The first question that I had, that I raise rhetorically, is what factors are to be considered and when are they to be considered? And that is set out in article 4.1. I will read the relevant part: "Without prejudice to article 7, the unfairness of a contractual term shall be assessed taking into account the nature of the goods or services, under which the contract was concluded and by referring at the time of conclusion of the contract to all of the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent." We can see, there, an all embracing test of all the circumstances. We say that that is very, very similar to the approach in the extemporary judgment of the Lord Chancellor in Clydebank. There is no reason within this test to confine ourselves to looking in isolation at the term without reference to all of the existing circumstances. Whether there be other terms that are interdependent, whether there be other contracts that are dependent. There is no good reason, we say, why the same should not apply in relation the penalties doctrine. The time at which it is to be considered under both is at the time that the contract is concluded. And it would seem to us, or in our submission rather, that that is the appropriate test under both. Now, we have been referred, during the course of the hearing, to a variety of other suggested tests. I do not have time to go through each of them, but it would seem clear that at least from the oppression test, as it is applied in Canada, that you would consider all of the circumstances at the point at which you come to enforce the contract and so there is a relevant distinction there that may be important. The second factor that, or factor of comparison, is: do you consider the imbalance in the relationship between the parties? Under unfair terms, yes, you do. But it is not simply a question of a trader being a more significant entity than an individual. It cannot be, otherwise all such relationships would be imbalanced. It is a question, we say, of whether unfair advantage has been taken of that relationship. This question of whether imbalance can be considered under the penalties doctrine was, I think, considered in submissions in relation on behalf of Cavendish. Could I take the court to bundle A --
LORD CARNWATH: Article 3 is not dealing with imbalance between the parties, it is dealing with imbalance between the terms, as my Lord, Lord Sumption, pointed out earlier on.

LORD SUMPTION: The imbalance has to be caused by the terms once they have been agreed. I mean, it may not make a great deal of difference, because if the obligation to pay the £85 is simply the result of a free choice, made by the motorists, his options are not being constricted by the circumstances or the conduct of the landowner, or ParkingEye, then it is hard to regard it as arising from any imbalance.
MR KIRK: I suppose that is the same or a different way of saying that you consider the terms, you consider the relationship when you consider the terms. So, I suppose I am not really saying anything that is different. What I hoped to do was to show the difference in approach between imperial tobacco and Lord Radcliffe's approach in Bridge, so if I can take your Lordships to bundle A, this is divider 3. Page 819.
LORD TOULSON: Which bundle?
LORD NEUBERGER: A.
LORD TOULSON: A, I am sorry.
MR KIRK: Campbell Discount v Bridge, which is a hire purchase arrangement. I think the facts have been dealt with, but the contract as a whole would now fall foul of the Consumer Credit Act, but Lord Radcliffe said, and this is at the end of his judgment: "I do not speculate as to what principles they would have thought applicable to a hire purchase contract in which the hirer, I dare say willingly enough, transacts only with the dealer who is not the agent of the owner and if he signs up at all, signs up to an elaborate fixed menu of stipulations and conditions, which he probably does not bother himself to read and very likely does not or cannot understand." Our submission is that what that shows is that as a factor in considering the doctrine of penalties, the courts were willing to consider the relationship between the parties. The third point of comparison is a question of whether you consider good faith unconscionability.
LORD MANCE: Has anybody ever done a study as to how many of these £85 penalty charges arise from very limited overstays? I mean, I don't know what supermarkets or shops there are here, but if you get caught in a supermarket queue, and you are two minutes over the two hours, you presumably get the parking charge and I imagine you feel quite upset. It is not just the relationship between parking ParkingEye and the consumer, it is all the relationships involved in going to a retail park like this, isn't it?

The Prankster has helped numerous motorists where the overstay was very short - just a minute in one case. Here is a recent quote from LindyLou on MoneySaverOnline

This happened to me. Went over by 4 minutes, went on holiday and by time I got back was over £100. Had used that car park 4 times over 3 months, never seen anything stating what the 'penalties' are. Never been back to that car park or the shops around it. Stockton-on-Tees needs the business but tough, taken my custom elsewhere.

MR KIRK: The nature of the shops was considered during the course of the trial.
LORD MANCE: Yes.

No 

MR KIRK: These are not supermarkets, these are shops -- there is a shoe shop, a Mothercare, there are shops where you would probably not expect to spend a great deal of time there.

Blatantly not true. There are plenty of shops on site  where a great deal of time would be spent. When the BBC visited the site to investigate, only two retailers was in favour of the time limit.The others were either neutral or stated it harmed their business. There are 12 retail units on site, with two new ones being fitted out for Dreams Ltd, and Costa Coffee. The shop managers were asked two questions: a) Have you had many customer complaints about the 2-hour parking limit; and b) Does Parking Eye's enforcement of the 2 hours help or hinder your business?

The results were:

7 said they had lots of complaints, and it drove customers away
2 said it helped, because without it the car park would fill up with non-customers
2 had no manager available for comment
1 was the Nuffield Health Gym, where their customers get 4 hours if they log their registration number.

The manageress at Matalan was particularly vociferous, saying that she could spend all day trying to get charges cancelled, but now she just refers them all to Savills. The PoundStretcher lady said she has actually had customers abandon their trolley mid-shop, because the 2 hours was nearly up.

Many of them said that once customers get hit with a PE parking charge, they usually never return to that site again. Incidentally, directly opposite is a Council car park, which charges £1.20 an hour.

A lot of points have been taken during the course of this hearing that were not factually addressed during the course of the earlier hearings and, in particular, at trial. If that question of one minute, two minutes overstaying had been raised then I would have taken the court to a point that arises -- I will just pass up the British Parking Association code, which is the additional document, it is page 10. There are, as a requirement -- I think it is putting it too high to say a regulatory requirement -- but a requirement of the membership of the approved organisation, the government approved organisation you must have, allow, a reasonable time for people to come in and out. So, nobody is charged, if the system is applied correctly, for staying less than two hours.

Nobody is charged for staying less than two hours, agreed.

People are charged for staying small amounts over that time, and of course, as POPLA pointed out in their recent annual report, motorists can be trapped in a car park due congestion, which is quite a common occurrence. The Prankster has helped many people who complained to ParkingEye they were trapped in the car park, but ParkingEye refused to cancel the charge. 

LORD TOULSON: You mentioned evidence. What evidence was there before the court? We don't have it, do we?
MR KIRK: There was evidence from ParkingEye, a witness statement from ParkingEye, which set out the manner in which this operated.
LORD TOULSON: Right.
MR KIRK: There was evidence from Mr Beavis, the defendant, which concerned a global approach to parking.
LORD TOULSON: Did the evidence from ParkingEye explain the rationale of the calculation which would have led to the £85?
MR KIRK: No.

Although there was no evidence pre-hearing, in the witness stand Alex Cooke for ParkingEye stated that the charge was set by visiting other car parks and seeing what penalties they charged.

LORD TOULSON: No. Right.
LORD SUMPTION: Was the operating scheme, that we have just been referred to, before the court?
MR KIRK: Yes, it was put before the court and in particular reliance was placed on it by the appellant.
LORD MANCE: What does it have to do with the contract? It is not referred to, is it? It is not a contractual document.
MR KIRK: No, it is not a contractual document.
LORD MANCE: Is it referred to? I don't think it is referred to.
MR KIRK: There is a sign which shows --
LORD MANCE: BPA?
MR KIRK: Yes, BPA.
LORD MANCE: But as far as the contract is concerned, it is the document we have, and clause 13, which may or may not be easy to apply to this contract, isn't contractual.
LORD SUMPTION: It is only evidence of what might happen in practice, not what must have happened.
MR KIRK: The issue of short staying was not raised.
LORD MANCE: I was not actually addressing short staying, I was addressing short overstay. And what is a reasonable period? We don't know.
MR KIRK: There was no evidence about that. I do know but I am going to resist that temptation. I should add, though, that we have made submissions about how this area of industry is regulated and I am not going to repeat those submissions. But, this code which effectively binds these operators, because if they don't sign up to it they cannot have access to the information that allows them to run their business, the identities of motorists, is a code that is arrived at if your Lordships look at the foreword on the second page, it is the last paragraph.

This is not correct. The code of practice specifically states that the charge must be a genuine pre-estimate of loss. In April 2013 the code in plave was version 2*.  This states

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 that 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.

As ParkingEye ignored this requirement for years without any penalty despite a multitude of complaints to the DVLA and BPA, the code is hardly binding. As Captain Barbarossa might say, "The code is more what you call guidelines than actual rules."

The DVLA have confirmed in FoI statements that they do not require operators to follow the code and they will still hand out keeper details even if parking companies do not toe the line.

It is this: "I would like to thank those that contributed to this updated code. In particular the members of the advisory panel which include representatives of from both the operators and consumer and motoring organisations including the AA, Citizen's Advice Bureau, Consumer Focus, the RAC Foundation and Disabled Motoring UK."

It was a clever strategy to mention these names, but the Prankster doubts these bodies have much control over the final document. In any case, these were apparently only consulted for the first version, not version 2 which was in force at the time. The DVLA have admitted in FoI requests that they have had no input to the code since the first version. However, even if they had, if you compare the BPA Code of Practice to the dogs breakfast that is the IPC, it is clear there is no control. The IPC do not let keepers appeal windscreen tickets, even though that was a clear requirement of the government.

So, it is a document that is designed in some ways to balance the interests of both consumers and motorists.

This is not a valid conclusion. In particular, these bodies seem to have no control over the level of parking charges, which is the issue in hand.

One of the parking terms that we have not considered in any detail was the parking term in relation to disabled bays. That is a requirement under this code, which I should just flag up before I leave it, which is at page 10.16, "Disabled motorists". It refers in general terms to obligations under the Equalities Act.

This is another clever ploy to make it seem like ParkingEye are considering the interests of disabled motorists. However of course this car park is managed only by ANPR cameras at entrance and exit; there is no manual patrol. There is therefore no regulation of disabled bays and disabled drivers have to take pot luck that nobody has taken their spaces. Rather than respecting the Equalities Act, this would therefore be good grounds for taking action against ParkingEye and the landowner.

But we can see, really, if you have obligations in relation to disabled motoring, it would seem highly unlikely that they could be described in anything other than deterrent terms. You are not saying to somebody, "However you construe the contract you may park in a disabled bay", you are saying, "Don't park in a disabled bay". 

This is a valid point, and explains why the charge must be for breach of contract and not a contractual charge. There can be no valid offer for able bodies people to park in disabled bays. This of course blows away the contractual model recommended by Will Hurley and John Davies of Gladstones Solicitors (and also of the IPC).

Can I then put that to one side and then return to my questions. Do you consider good faith? I have already answered that in relation to penalties before the short adjournment and the answer is in a limited way, you don't really consider it in the same way that you would consider illegality or something of that nature. Under the regulations, you do consider good faith and we have been through that. The points that we would make about this particular term are those that we have set out in our case. But, the challenge, the challenge that has been made to it relates not so much to the term as to the business model. We question whether the unfair terms doctrine is the appropriate mechanism through which to make such a challenge, because there is another mechanism that is open to organisations such as the Consumer Association, that would allow them to consider the commercial practice involved here. If I could ask your Lordships to turn in consumer authorities bundle J to 7295, it is the Consumer Protection from Unfair Trading Regulations, 2008. 7295, J, divider 2. This is the primary legislation that allows regulators such as local authority trading standards departments and the Consumers' Association to take action against unfair commercial practices.

At this point The Prankster notes that all the  ParkingEye employees in court turn green and look as if they very much wish their counsel would shut up.

Commercial practices is defined very broadly. The legislation which implements the European directive, the unfair commercial practices directive, sets out all of the potentially unfair commercial practices and I am not going to go through in detail but just in summary, they are numerous. The prohibition of commercial practice contravenes the requirements of professional diligence and if you turn to 7296, you will see how broad a test this is: "Professional diligence means the standard of special skill and care which the trader may reasonably be expected to exercise towards consumers, which is commensurate with either honest market practice in the traders' field of activity or the general field of good faith in the trader's field of activity." Misleading actions: "A commercial practice that contains false information and is therefore untruthful in relation to any one of a number of matters." Again a commercial practice that could be challenged under this legislation.

Perhaps the most important is the broadest of the commercial practices that can be challenged using this legislation, misleading omissions. Commercial practices and misleading omissions is at 7299. If in its factual context, taking account of various matters, it omits material information, it hides material information, it provides material information in the manner which is unclear, unintelligible, unambiguous and/or timely. And this: "The commercial practice fails to identify its commercial intent unless this is already apparent from the context."

Although the business model put forward it to deter overstays, there was no evidence put forward to support this model, and in fact and equally valid point of view is that the intent of the business model is to generate revenue; £1,000 a week for the landowner and an unspecified amount for ParkingEye. (ParkingEye v Somerfield (eg para 576) reveals they expect to issue around 0.4 Parking charges per space per week. In this context ParkingEye are clearly failing to identify their true commercial intent.

At Avonsmead retail park,  a similar car park, even though there is no parking problem the landowner tried to install ANPR against the wishes of the retailers.

Another case of omitting misleading information is the secret clauses in the Landowner contract. The landowner typically has a genuine shopper clause in their contract with ParkingEye, which is contained in the User Manual section of the agreement. However, this was withheld and not given to the judges. A typical clause would give the landowner the right to cancel if a shopper spent more than £30 on site. (On hospital sites similar clauses give the right to cancel for accident and emergency visits.)

However, this leads to the conclusion that the true intent is not to deter all overstayers, but only overstayers who are not customers. The motorists who park and go off to the train station are not welcome, but shoppers who spend a great deal of time and money on site, are.

But this is simply misleading, and against consumer legislation. Why should a shopper who paid cash and lost their receipt be penalised, while a shopper who uses their bank card is not. Why should a shopper who spends £29.99 be penalised while a shopper who spends £30 is not? Consumers have the right to know these hidden terms and conditions so that they can make sure they keep receipts, use bank cards, or 'spend a penny' if needed.

So, although in a business to business relationship there is great scope for redrafting clauses, it is not quite so easy in a consumer context where you have to be frank about what your commercial intent is.

Quite. But ParkingEye are clearly not coming clean, either with the signage, or with their behaviour in court by not giving the Supreme Court, the highest court in the land, the full picture.

But the point we make here is that if you are challenging a business model, it is not sufficient to simply go under the unfair terms and challenge the unfair term, because what you are really considering is the commercial practice. What they are really saying here is that it is wrong for a business such as this to make profit from parking in the way that they do on this breach model.

The government happen to think it is wrong for a business to make a profit this way, at least in hospitals. Here is what they have to say

Contracts should not be let on any basis that incentivises additional charges, eg ‘income from parking charge notices only’

and

NHS organisations should act against rogue contractors in line with the relevant codes of practice where applicable.

.That, we say, is a broader question which does not relate simply to the individual term as there is between trader and consumer, it may have an impact --

LORD CARNWATH: You could have said that in the Ashbourne case, couldn't you?
MR KIRK: The Ashbourne case is a classic example of how the office of fair trading, as it was, went and used both the unfair commercial practices directive under part 8 of the Enterprise Act and their rights under the unfair terms legislation, to consider a whole host of bad practices.
LORD CARNWATH: But they succeeded under the unfair terms, didn't they, in relation to the misuse as it was seen of the customer's propensity to be overoptimistic; do you say that was wrong?
MR KIRK: I don't say that was wrong, but I am saying in this case, it is not so much the term that is the problem. Because if you take out the parking company, you put the landowner there, then it doesn't seem to be an issue. It is the model, it is the way in which they make their profit. That, we suggest, is more susceptible to challenge on the basis of commercial practice rather than unfair term.

The same problem would occur if the landowner ran the car park directly. In that scenario, the problem that there is no initial loss goes away, but the issue with the level of charge remains. The landowner would be able to charge a genuine pre-estimate of loss, which co-incidentally would be roughly the same as the charges that council car parks impose (by analysing industry figures). They would not be able to charge the penal rates of £85 (or elsewhere £100 or even £120).

LORD HODGE: So, you say in relation to the challenge that we are facing here, we should assess it as if the landowner were doing that which you do, in effect?

MR KIRK: Yes. Yes. I want to be careful that I am not accepting something with which I might find hidden trap.
LORD HODGE: There wasn't intended to be.
MR KIRK: Your Lordships showed an interest in the core terms. To the extent that this is a case in which, certainly for the purposes of my submissions now, we work on the basis of breach. It has been accepted that a default provision does not fall within the core terms and that is primarily based upon the rationale of the decision in First National Bank. First National Bank, obviously, involved default interest payment after judgment. I suppose the distinction that there might be between First National Bank and the Abbey National case is that in the Abbey National case it was not found to be a matter of breach, a question of breach, it was found to be a question of a term. So, you could then legitimately go on to consider whether it fell within the exception. Your Lordships expressed an interest, I was merely going to take you to the various tests, if that would be useful, but I don't need to, because of the position or the submissions that I am making.
LORD CLARKE: The test for what?
MR KIRK: The tests in relation to core terms.
LORD CARNWATH: That is not an expression one finds in the regulation.
LORD TOULSON: 4.4 is the regular provision in the regulation, isn't it, in the directive? Sorry, we are on the directive.
MR KIRK: Yes. I should say that the language has changed in the Consumer Rights Act. And so: "The exclusion from the assessment of fairness, a term of a consumer contract may not be assessed for
LORD CARNWATH: But they succeeded under the unfair terms, didn't they, in relation to the misuse as it was seen of the customer's propensity to be overoptimistic; do you say that was wrong?
MR KIRK: I don't say that was wrong, but I am saying in this case, it is not so much the term that is the problem. Because if you take out the parking company, you put the landowner there, then it doesn't seem to be an issue. It is the model, it is the way in which they make their profit. That, we suggest, is more susceptible to challenge on the basis of commercial practice rather than unfair term.

Of course, it is still an issue if the landowner is there

LORD HODGE: So, you say in relation to the challenge that we are facing here, we should assess it as if the landowner were doing that which you do, in effect?
MR KIRK: Yes. Yes. I want to be careful that I am not accepting something with which I might find hidden trap.
LORD HODGE: There wasn't intended to be.
MR KIRK: Your Lordships showed an interest in the core terms. To the extent that this is a case in which, certainly for the purposes of my submissions now, we work on the basis of breach. It has been accepted that a default provision does not fall within the core terms and that is primarily based upon the rationale of the decision in First National Bank. First National Bank, obviously, involved default interest payment after judgment. I suppose the distinction that there might be between First National Bank and the Abbey National case is that in the Abbey National case it was not found to be a matter of breach, a question of breach, it was found to be a question of a term. So, you could then legitimately go on to consider whether it fell within the exception. Your Lordships expressed an interest, I was merely going to take you to the various tests, if that would be useful, but I don't need to, because of the position or the submissions that I am making.
LORD CLARKE: The test for what?
MR KIRK: The tests in relation to core terms.
LORD CARNWATH: That is not an expression one finds in the regulation.
LORD TOULSON: 4.4 is the regular provision in the regulation, isn't it, in the directive? Sorry, we are on the directive.
MR KIRK: Yes. I should say that the language has changed in the Consumer Rights Act. And so: "The exclusion from the assessment of fairness, a term of a consumer contract may not be assessed for fairness under section 62 to the extent that it specifies the main subject matter of the contract or [and these are the key words] the assessment is of the appropriateness of the price payable under the contract by comparison with the goods." Et cetera.
LORD NEUBERGER: Where do we find that?
MR KIRK: I don't think these provisions have been handed up.
LORD MANCE: It is a new Act coming in. Don't worry then.
LORD HODGE: The only major difference between 6.2 of the regulation and what you have read out is the emphasis on appropriateness rather than adequacy.
MR KIRK: There was reference to remuneration, as well. My understanding from there was a law commission report --
LORD TOULSON: I was just turning that up now because what you have just read out had a rather familiar ring to it. It may be from the bill attached to the unfair terms in contracts report, but anyway it matters not.
MR KIRK: We couldn't find the suggestion in the law commission report for the change to the word "Appropriateness", but there is some reference, if it assists your Lordship, in the explanatory notes at 301 to 303, which in summary say that adequate was not a particularly clear word to use and remuneration added nothing.
LORD TOULSON: Anyway, these are yet to be introduced provisions?
MR KIRK: Yes and as I understand it there is no starting point. The only two further matters that I need to address your Lordships upon -- or I do not need to -- are two questions that arose during the first case.
LORD CARNWATH: Before you do that, are you going to say anything about the Aziz test? Is that one of the ones you are covering; whether you could reasonable assume that the consumer would have agreed to such term in the individual contract notion?
MR KIRK: Yes, and the judge had in mind what Lord Millett said in the First National Bank, the trial judge had in mind that test. That is one of the factors you consider. You would in this situation, of course, consider whether the consumer would accept this. But in this case, this was actually very clear that this was a consumer who had used the car park on several occasions, that was the evidence during the course of the trial. It seemed very difficult to say in those circumstances, when you have a term that you knew perfectly well applied, and he repeatedly used the car park, as many others did, that there could be any real basis for saying that he wouldn't have used it had he known or wouldn't have use it had he realised.

This is an obvious fallacy...

LORD MANCE: That is not quite the same. Would have agreed to in individual contract negotiations postulates, a blank sheet of paper and them sitting down either side of a table and one of them saying, "Now, this is what I want", and the other then having an opportunity to comment; driving into a retail facility and everything going well the first few times, seems to me a different kettle of fish.

...Easily spotted by Lord Mance

MR KIRK: Yes. We would simply say if you consider the circumstances of this case --
LORD SUMPTION: If you assume that there is a difference between what the motorist actually agreed to and what he would have agreed to in a negotiated contract, then you must surely also be assuming that in some way the situation is such that the motorists choices are contradicted. Otherwise, it is difficult to see why there should be a difference; why would he not park someone else where ex hypothesis the charges were lower or different or whatever? So, doesn't it ultimately boil down to the question, whether the consumer's choices have been in any way constricted either by the conduct of the other party or by the circumstances in which they find themselves?
MR KIRK: Yes. I am not sure I could argue with that. The whole rationale for European consumer law and, perhaps, a rationale that we can find in our own common law, is not to make decisions for consumers or protect them from their bad decisions, it is so that consumers can make informed decisions where they are not taken advantage of. This is a situation where it would be very difficult to say that a consumer was being taken advantage of when the signage was so clear and in accordance with what you might ordinarily expect.

Another obvious fallacy. The customer is being taken advantage of because they have no bargaining power. The test is, if they had bargaining power, would the contract be different?

LORD TOULSON: They are two different matters, aren't they? There is the requirement for clarity and understanding, core terms, even core terms have to pass that test. A quite separate matter is the substance of it. And of course, if people are presented with the contract of adhesion and everybody in the market is following the same term, then the customer has no choice wherever he goes, but the Aziz postulate is looking at it in a rather different way. Which is if you were starting with a blank sheet of paper and if you were in a position to influence this term, whether it is something where your lawyer would say, "Well, hang on, this is not right, this needs some justification".

MR KIRK: Yes, I suppose the justification in this situation is the fact that this is a free car park where you get two hours free, you balance that against the risk that you might overstay and be found to have to pay the £85 or £50, in fact.

Which leads us back to the fact that as the loss is £0 (and the indirect loss £18), this is an unenforceable penalty.

LORD MANCE: Going back to the context, we are told in the statement of facts and issues, this car park is located adjacent to Chelmsford railway station in a retail park. Without having been to Chelmsford for many decades, I would wager a pretty fair bet that you would be most unlikely to be able to park free near Chelmsford railway station, outside this.
LORD NEUBERGER: Being a wager it is definitely unenforceable.
LORD MANCE: Can one take judicial notice of that sort of consideration.
LORD NEUBERGER: We just have.
MR KIRK: Certainly, a big factor in this case was the overall justification that if you don't have something that deters people from abusing a parking space --

And in fact there are two nearby car parks where parking is £5 for all day parking. Therefore the deterrence level needed would be something like £10 to drive consumer behaviour to park elsewhere. ParkingEye use this model at motorway service stations where there is 2 hours of free parking, but around £12 per day after that. As this model works in motorways, there is no reason why it cannot work here.

LORD MANCE: Everyone will park there for free.

LORD NEUBERGER: Lord Mance must be right, must he not? Seriously, we all know there are areas around the country, near shopping centres, where parking is a very desirable feature. Near a railway station, even more so and you normally have to pay for the first hour as well as subsequent ones.
LORD TOULSON: My difficulty with all this is it comes back to the point you indicated earlier that before the court, there was no evidence to explain the rationale of the £85 or how it was arrived at in relation to this car park. One rather suspects it may be that ParkingEye has a standard rate and that is what it has in all its car parks. That may be right and may be wrong, but the fact is that we are all now engaging in our own speculations as to what might be a justification of £85 at this particular location, aren't we?

An extremely good point and Lord Toulson hits the nail on the head. This is all speculation and no good evidence is provided by either side. 

MR KIRK: That was a function of the way in which the term was attacked in the County Court. The approach in the County Court was to look globally at the ParkingEye business and say, "You make too much profit, you are profiting", and there was a factual finding in relation to expenditure and profit and I think it is found in the pleadings at 6906 --

And of course the reason for this is that the case started in the small claims court for a random claim in a random car park, and so the rules of evidence were such that hardly anything was submitted. A large numbers of small claims cases against ParkingEye motorists have asked for evidence to be provided or witnesses to be present for cross-examiniation (ParkingEye regularly give false information in witness statements, and a number of these are on file, including the iniital witness statement for the very first Beavis hearing). Almost invariably judges have ruled agains thses requests stating it is against the ethos of the small claims court.

LORD TOULSON: The only material I get from the first instance judgment he had was, a comparison with local authority parking rates and the company's balance sheet.
MR KIRK: Yes.
LORD TOULSON: That was it.
MR KIRK: That was it.
LORD TOULSON: Right.
MR KIRK: There was general evidence about what their costs were and how they were attributed the lion's share in fact to the administration and installation of the operating system. But there was no detailed analysis, primarily because we were not saying that the breach caused a particular loss. If there had been that approach then I accept that it would have been appropriate to deal with each of the items in detail.

In the first hearing the costs were argued to be an average of  £18 per ticket issued, which was calculated by dividing the total business costs from the accounts, by the number of tickets issued (obtained by FoI from the DVLA). Although this exact figure was not mentioned in the judgment, HHJ Moloney did confirm the charge was in no way a genuine pre-estimate of loss.

My Lord, those are my submissions, unless I can assist your Lordships further.
LORD TOULSON: Can I ask one question, I think we were told that the regulations referred to in the contractual document are simply what is on the face of the document.
MR KIRK: Yes, your Lordship is right.
LORD TOULSON: Parked within marked bays, do I understand that correctly, that somebody parks and is not squarely within a marked bay, that gives rise to a £85 charge.
MR KIRK: Yes.

No. The site is managed by ANPR cameras and so there is no possibility of detecting this type of violation.

However, this does beg the question; if a motorist parks over a line, or in a disabled bay without a blue badge, they are breaching the contract but there is no possibility of them getting a parking charge. Presumably then, the landowner is accepting the fact that the deterrent element is in the signage alone. No actual charge is needed. But if no actual charge is needed for these types of transgressions, why is a charge needed for overstays? If a deterrent of £0 is sufficient in some cases, why is a deterrent of £85 needed in others? If ParkingEye is at risk of losing their contract if they do not enforce overstays, why are they not at risk for not enforcing parking in bays and in disabled spaces.

LORD SUMPTION: Presumably on the basis that you are effectively occupying the space of two cars.
LORD TOULSON: You might not be, I mean one is not allowed to give evidence, but you have a sort of car park where one moves slightly and all the cars along the line are all slightly over the white line, you get 10 of those that is rather good for ParkingEye because you have 10 times £85.

The end result is, 10 cars still park, no harm is done to anyone, and as ParkingEye do not enforce this kind of breach, no charges are issued. 

MR KIRK: My Lord, I am not going to give evidence, but it was not an issue that was raised.
LORD TOULSON: It wasn't, but we are looking -- no, all right. Thank you.
MR KIRK: I am conscious that I don't want to overstay.

Because it will cost me £85? 

LORD NEUBERGER: Thank you very much, Mr Kirk. Mr de Waal. 

Happy Parking

The Parking Prankster

*Ignore the fact the link says version 3. It is version 2.