The case of ParkingEye v Barry Beavis is to be heard at the Supreme Court this week. The legal arguments for both sides are now in the public domain, as reported on
MoneySavingExpert.
Mr Beavis's case
The Consumer Association Case
ParkingEye's case
The Prankster has identified a large number of legal and factual errors in ParkingEye's case. It is too late for them to file a new skeleton argument. Hopefully ParkingEye will correct these during oral arguments so that they do not deliberately deceive the judges.
4. There is good reason for contractually enforcing a simple fixed payment
parking charge that has the dual function of deterring overstaying at a city
centre car park, and funding the management of free car parking for
consumers.
There is no apparent basis in law for a charge for breach of contract funding other other heads of cost not related to the breach.
5. There is a public interest in car parking space on private land being provided
and properly managed. Consumers benefit from free car parking in busy city
centre areas while they shop. Spaces are more readily available to shoppers
because car parks are not congested by other motorists’ misuse. Parking
bays can be effectively reserved for disabled consumers that genuinely need
to park their cars close to the shops they are visiting.
The statements are true but do not relate to the instant case, or any ParkingEye ANPR controlled car park. ParkingEye do not protect disabled bays from misuse because their car parks are controlled remotely by ANPR, which only times entry and exit. There is no proof ANPR results in effective management, and in fact it generates huge numbers of complaints and problems.
6. The effective management of car parking space is also important to the
commercial interests of landowners and the retail businesses that the car
park serves. It is in their commercial interest that there is a reasonable
turnover of potential customers. A car park that is full of cars driven by
commuters, or other long stay motorists, may result in their customers being
unable to find a space and so shopping elsewhere.
There is no evidence to support this. Two customers staying for two hours each may spend more or less than one customer staying for four hours. Certain types of retailers will be disadvantaged by time limits, such as restaurants and coffee shops. While retailers may be disadvantaged if commuters or non-customers stay all day, this is not what happened in this case. Mr Beavis was a customer. The evidence introduced earlier in the case (
ParkingEye v Somerfield) shows that long-stay commuters leave after around 4 weeks of an ANPR regime. After that, ParkingEye are left to target genuine customers. There is no evidence targeting genuine customers benefits retailers, and plenty of evidence to suggest it drives customers away; in ParkingEye v Somerfield the ParkingEye contract was cancelled due to ParkingEye targeting genuine customers. In the 2001 PE v Somerfield judgment the drop-off ratio is discussed (para 650 onwards). The long stay abusers move on after around 4 weeks, and parking charges issued drop off by 65-69% .The difficulty is that the parking ‘problem’ is now solved, but ParkingEye continue to need to make a profit.
7. The amount charged for overstaying should not be set “much higher than is
necessary to achieve” the objective of deterring breach. 2 Setting a
reasonable amount will depend upon all of the relevant circumstances.
There will inevitably be a tipping point after which it can be said that the
charge exceeds what is reasonably necessary to deter breach. However, the
level of the charge in this case was broadly comparable with those that
Parliament considers reasonable to deter motorists from parking badly or
overstaying.3 The Courts below were correct to conclude that a charge set at
a similar level was reasonably necessary to deter the same conduct in a
private city centre car park.
The test is not whether charges are in line with the maximum allowed by government regulations for any kind of parking offence, but whether they are in line with the amounts actually charged by councils for that particular offence. Different amounts are charged for different type of offences. The Traffic Management Act requires authorities to have two levels of penalty charges which relate to the seriousness of the contravention. Chelmsford has adopted the higher contravention price band at £70 (£35) and the lower contravention at £50 (£25). Parking overstays fall within the lower band and are therefore charged at £50 (£25). It is therefore self-evident that charges of this level work to deter parking contraventions. It is also greater than ParkingEye’s average cost per ticket issued of £18 (established in the Moloney hearing) and so this still allows ParkingEye to fund a profitable business. Other parking companies set charges at council levels and run profitable businesses (eg Total Parking Solutions ) What TPS cannot do, of course, is afford to pay £1,000 a week to the landowner. Where will this end? Will parking charges have to rise to £200 because the next winner of the contract bids £2,000 a week? The courts came to the wrong conclusion because they were not informed that the charge was not in fact set at a similar level to the levels councils set to deter similar behaviour.
8 If parking charges were capped at the market hourly rate for parking in the
area, they would simply not deter. In a city centre car park near a commuter
railway station, charging the market rate would in fact encourage overstaying.
The commercial interests of the landowners and retailers in having a
reasonable turnover of customers would be frustrated.
There is no need to cap parking fees at the market hourly rate. Other car parks, also run by ParkingEye, achieve deterrence by using higher rates. Motorway service stations, for instance, charge around £12 after 2 hours free stay. Lower charges can and do work at car parks around the country.
Consumers are now well protected in this area. In enacting the Protection of
Freedoms Act 2012 Parliament encouraged civil car parking enforcement,
but balanced that by creating a regulatory framework that protects
consumers. There are statutory obligations in relation to parking charge
notices and consumer information. Operators are required to be accredited
members of a Government approved trade association. They must observe
codes of conduct on charge levels, discounts, procedure, signage and the
appropriate pursuit of charges. The operators are required to fund an
independent appeals service that is free for all affected motorists to use.
POFA 2012 has nothing to do with protecting consumers, and merely makes a keeper liable for a parking charge in certain circumstances. Parking operators are not required to comply with POFA, and may have chosen not to, such as Excel, VCS, Smart Parking, CP Plus, Highview and many others. The act does not require operators to be accredited members of an approved trade association (ATA) and parking companies such as Ace Securities and Proserve have operated since POFA came into force without being members of an ATA. (This has recently changed as the result of a judicial review, but was instigated by the DVLA due to complaints and has nothing to do with POFA). The operators are not required to fund an independent appeals service due to anything in POFA; this is a requirement the DVLA have imposed. There have been several well publicised small claims court cases where ParkingEye have recharged the independent appeals service to the motorist, and recent minutes of BPA meetings show they are reconsidering allowing a recharge. Neither the DVLA not the ATAs (the BPA and the IPC) take regulatory responsibility for enforcement of their own rules, so although there are numerous reports of breaches, nothing actually happens. As for statutory obligations on consumer information, the parking signs actually fail the current legislation, but as this was enacted after the parking event, they were not in play at the time.
The Independent Parking Committee have recently removed access to their appeals system for keepers. When a windscreen ticket is issued, only the driver can appeal. The keeper will get notification after 28 days they are liable for the charge, but by this time the appeal window has already closed.
11 (d) If the word ‘deter’ carries its ordinary meaning of discourage ordissuade, it is likely that the term that was upheld in Dunlop wasdesigned predominantly to deter breach. The clause applied thesame fixed amount for tampering with trademarks, selling tosuspended agents and exhibiting or exporting tyres without consent.Dunlop intended to deter, discourage or dissuade these practices. Itis very difficult to see how the clause could, in any meaningful sense,be regarded as attempt to quantify recoverable damages inunforeseeable circumstances. Indeed, the House of Lords upheldthe term because losses were virtually unquantifiable.
In the Dunlop case, Dunlop’s business model was not such that they wanted a substantial amount of agents to breach the contract on a regular basis. They genuinely wanted to stop all breaches. ParkingEye on the other hand, rely entirely on breaches to fund the business, which leads to the inescapable conclusion that they design their systems to generate a number of these breaches, rather than trying to eliminate them altogether. This contrasts with other parking companies who are able to manage car parks while generating substantially lower numbers of penalty charges, by helping the motorist instead of viewing them as a cash cow.
12 The trial judge found factually that the term was expressed fully, clearly,
legibly, openly and given appropriate prominence. No advantage was taken
of any weakness in the consumer’s position. This was a simple and familiar
provision. Notices had been given in accordance with the legislation. In
balancing rights and obligations, the consumer received the relatively
valuable privilege of two hours free parking in the city centre.
The ‘relatively valuable’ privilege of free parking could have been purchase for a few pounds in nearby car parks. It is hard to see why it was ‘relatively valuable’.
It is also noteworth that although '
Notices had been given in accordance with the legislation', since the date of the parking event legislation has now changed and that ParkingEye's signage must now comply with the
Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013
This means that regardless of the outcome of the Beavis case, consumers can use clause 13(1) of the act to show they are not bound by any distance contract if the correct information is not displayed. The Prankster has examined the signage in the Beavis case and concludes it would not be compliant if the event happened today.
13 In Aziz v Caixa d’Estalvis de Catalunya13 the CJEU adopted the reasoning
of the Advocate General that a term that was “intended to encourage
observance of the agreement” should be regarded as fair if it was not much
higher than was necessary to achieve that aim. It is submitted that the
scheme of the 2012 Act envisages that private parking charges will operate
as a deterrent. The £85 sum is proportionate to the aim to be achieved.
“
a term that was “intended to encourage observance of the agreement” should be regarded as fair if it was not much higher than was necessary to achieve that aim”.
Clearly, the charge of £50/£85 is much much higher (double in some cases) than that needed; local council of £25/£50 work. POFA 2012 envisages parking charges will be levelled. However, the government guidance on POFA expects that they will be set at a genuine pre-estimate of loss, and not higher.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/9155/guidance-unpaid-parking-charges.pdf
5.3 . It does not create any new form of liability for parking charges or provide a route
to claim parking charges which were not lawfully due in the first place
3.4 Before the Protection of Freedoms Act a private landholder could only
seek liability against a vehicle driver to recover unpaid parking charges,
and therefore needed to be able to identify who was the driver of the
vehicle that incurred the parking charge. A landholder could make a
request to DVLA for details of the registered keeper but there was no
requirement for the registered keeper either to say who was driving the
vehicle or to accept liability him or herself. This allowed both the vehicle
driver and the registered keeper to avoid liability and meant that
landholders, on certain occasions, found it difficult to manage parking by
ticketing alone.
3.5 Schedule 4 of the Protection of Freedoms Act addresses this situation. It allows, providing certain conditions are met, the landholder to pursue the registered keeper of a vehicle for unpaid parking charges if the registered keeper refuses or is unable to identify the driver at the time the parking charge was incurred. This is often referred to as “keeper liability”.
16 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.
It is clear then that POFA was not intended to support arbitrary charges such as in the instant case, but only to allow genuine costs to be recovered. ParkingEye are trying to re-interpret POFA 2012 after the event.
15 The procedures introduced by the 2012 Act broadly mirror those followed by
local authority enforcement of parking tickets. Schedule 4 of the 2012 Act
prescribes the procedural conditions that must be satisfied in order to claim
parking charges from the registered keeper of a motor vehicle. Those
conditions include requirements for the content of tickets and notices,
including appropriate time periods, discounts for early payment and the
availability of an internal and independent appeals process.
This is a total fallacy.No independent appeals service is
required by the act; however, if one is available, the notices must refer to it.
POFA is only about establishing keeper liability. If the contents of tickets, notices, time periods or any of the other items noted fail the conditions, then that charge is still valid, but only the driver is liable. Many parking companies, as already noted, have decided not to be POFA compliant, and to just pursue the driver and not bother with the keeper.
It is also noteworthy that the keeper of the vehicle is not the
registered keeper, as ParkingEye state. The act defines the keeper as the person who keeps the vehicle.
16 Private car parking operators such as the Respondent can only function by accessing information held by the Driver and Vehicle Licensing Agency (‘DVLA’). It is Government policy that the DVLA should only disclose information18 that may lead to the identification of the registered keeper to a member of an Accredited Trade Association (‘ATA’).
This is a recent policy, and was not in place at the time of the parking event. Recent FoI requests on the DVLA have established this policy only began in late 2014. This was then challenged by Mr Duff, who lost in a judicial review.
18 The British Parking Association (‘BPA’) is an industry membership body
established in 1968 that is approved by the DVLA. It runs an accredited
Approved Operator Scheme (‘AOS’), which includes standards for signage,
ticket or notice wording, charge levels and the conduct of enforcement.22
The procedures adopted by the Respondent for the enforcement of this
parking charge conform with the AOS code of practice.
The procedures adopted by ParkingEye most certainly do not conform with the AOS code of practice. In particular, the code of practice in force at the time required parking charges to be capped at a genuine pre-estimate of loss, which was established in the Moloney hearing to be around £18 per ticket issued (although ParkingEye of course suffer no direct loss)
Although this did not happen in the instant case, ParkingEye have a long record of dodgy behaviour, including poor signage and charging motorists when no contravention has occurred. They seemingly possess a 'get out of jail free' card for their failure to be sanctioned either by the BPA or DVLA.
19 The regulatory scheme under the 2012 Act also requires the private parking
industry to fund an independent appeals service that is free for a consumer
to use. The Parking on Private Land Appeals (‘POPLA’) is an “independent
adjudication or arbitration” arrangement 23 that is similar to the parking
appeals system operated by local authorities. It was established on 1st
October 2012 by the BPA at the request of the Government and is wholly
funded by the private parking industry.
This is incorrect. The scheme does not require the industry to fund an appeals service, and there is no mention of this in the Act. The Act only requires the operators to direct motorists to an independent appeals service if one exists
21 The Court of Appeal found that the provisions in the 2012 Act:
“strongly support the conclusion that Parliament considered it to be in
the public interest that parking charges of the kind now under
consideration should be recoverable, provided that they had been
brought clearly to the attention of the motorist at the time he made use
of the car park.”
There was no evidence that Parliament had this in mind at all. All evidence is actually the opposite, As already shown, the guidance to the act expects charges to be set at a genuine pre-estimate of loss, not an arbitrary amount.
More recently Parliament has actively opposed the type of regime ParkingEye have operated at hospitals, and are
running a consultation to investigate the dodgy practices in the parking industry.
22 The trial judge found that this framework supported a policy of enforcing
tickets of this kind. He stated that the 2012 Act:
“set out to regulate abuses by privately-run car parks. In particular, it
prohibited clamping and its associated charges. But so far as enforcing
payment of private parking charges was concerned, it positively
encouraged it by conferring on the private operators similar rights and
powers in respect of registered keepers to those previously enjoyed by
the local authorities. It laid down detailed provisions in that respect; but
although charges similar to those in issue here were common before
the Act was passed, it made no attempt to prohibit or regulate them, as
it well could have done, if this was thought to constitute an abuse like
clamping.”
This is also an incorrect interpretation of the Act, for the same reasons. Recent government actions support this. In August 2014 they issued guidelines to hospitals decrying the use of operators like parkingeye, who fund themselves through ‘penalty charges’
https://www.gov.uk/government/publications/nhs-patient-visitor-and-staff-car-parking-principles/nhs-patient-visitor-and-staff-car-parking-principles
Contracts should not be let on any basis that incentivises additional charges, eg ‘income from parking charge notices only’.
32 The Appellant and the Intervener both pose the question of where the
line might be drawn if the touchstone of a penalty is no longer whether the
sum payable constitutes a genuine pre-estimate of loss. The Respondent’s
answer is this: where a contractual term has a legitimate purpose in
deterring breach, the sum payable should be proportionate41 to what is
required to achieve that purpose. This approach also has the advantage that,
in certain circumstances it may be that no sum over and above likely
contractual damages would be proportionate.
As already established, this level is £25/£50. Councils charge this amount and it works. Many parking companies, including ParkingEye, are already using the Beavis result to attempt to justify charges higher than £85, such as £100, and even £120.
If £25/£50 is the benchmark, where is the limit? £85? £100? More?
In summary, there is evidence that £25/£50 works, but ParkingEye have introduced no evidence to support their assertion a higher amount is needed.
34 Those cases are analogous to the present case. The damage sustained by
the Respondent in the case of a single motorist, such as the Appellant,
overstaying the permitted 2 hours free parking would be difficult to quantify,
as at the time of the making of the contract. However, if the Respondent
continuously failed to limit free parking to 2 hours, its contract with the
landowner is likely to be terminated on the grounds that it had committed a
material breach of the contract of service. Obviously, it would not occur on
the first occasion. But eventually, when the landowner was faced with a
permanently full car park, it (the landowner) would be likely to terminate the
contract.
There is no evidence the ‘carmageddon’ scenario would occur. In Scotland POFA 2012 does not apply. There are therefore very few court claims involving parking because only the driver is liable. Yet carmageddon has not occurred in Scotland. Other countries in the EU do not allow private parking companies access to keeper data. Yet parking problems do not occur there either.
There is a different and equally viable interpretation of the facts in that the landowner and ParkingEye have found a clever way to monetise a free car park in a way that avoids (legally) payment of VAT, and achieves a similar income to a fee paying car park (PE v Somerfield, p576 establishes that around 0.4 parking charges per space per week are generated), but without the inconvenience of having to get planning permission or paying higher rates.
Since ParkingEye suffers no direct loss, the courts would be better off considering the actual costs incurred by ParkingEye, rather that the possibility they may lose their contract, which surely fails the test of remoteness. These are the costs involved in enforcement. These were shown in the Moloney hearing to be £18 per ticket issued, on average. In this instant case, ParkingEye offered Mr Beavis to settle for £50, and detailed their actual costs to be £2.50 DVLA, £2.50 postage, £30 unspecified administration chagres, and £15 court fee. This was a Without Prejudice Save To Costs document, but as ParkingEye themselves submitted it as evidence, they have lost any privilege.
It should be noted that although ParkingEye have lost a large umber of contracts, in all reported cases this is not because of motorists overstaying, but because their enforcement regime is bad for the retailers business. ParkingEye v Somerfield is a good example of this, as is B&Q, fistral beach, and many others.
38(c) Without the charge there is likely to be congestion in the car park.
There was no evidence submitted to back this up.
38(d) Such charges are commonplace and this particular charge was not
exorbitant.
They are only commonplace with other private parking companies, thus becoming a self-fulfilling prophesy.
HHJ Moloney himself commented on this, wondering that just because one set of pirates established a charge without basis, it did not mean that other pirates were justified in also setting the same charge.
39 Deterrent parking charges have been encouraged by Parliament within the
scheme of the 2012 Act as being an acceptable alternative deterrent to
clamping. Recital 13 to the Directive is therefore likely to be relevant. It
provides that “statutory or regulatory provisions of the Member States which directly or indirectly determine the terms of consumer contracts are
presumed not to contain unfair terms…”
This is an incorrect reading of POFA 2012. There is nothing in POFA which encourages 'deterrent charges' and the guidelines explicitly state charges should be confined to a genuine pre-estimate of loss.
40 It is submitted that the 2012 Act is a statutory provision falling within recital
13. The Respondent levied the charges in good faith in light of the provisions
of the 2012 Act such that the contract term imposing the charges should be
presumed to be fair.
The Act does not speak to the level of charges at all, but the guidelines show the instant charge is well above the level expected.
41 Both the Appellant and the Intervener rely upon the Respondent’s business
model as showing bad faith because it is argued that the Respondent may
profit from a motorist’s unintended overstay. The trial judge carefully
considered the way that the Respondent operated the car park. There is no
suggestion that it was operated unfairly, deceptively, oppressively or in bad
faith. This is not a case where consumers were being cheated by bad
practice.
This is not the case because there is a secret clause to allow genuine shoppers to overstay, as long as they spend a minimum amount. This is obviously unfair. Had Mr Beavis known of this he could have appealed and got his charge cancelled, and he could have made sure he spent the minimum amount and kept receipts.
This clause has always been redacted in the copy of the contracts shown to the court.
This is therefore an offence against consumer regulations.
The Consumer Protection
from Unfair Trading Regulations 2008 defines a commercial practice as unfair if (4)(a)
it is a misleading omission under the provisions of regulation 6;
42 The Court of Appeal held that the Respondent’s business model was notrelevant.46 In our submission that was the correct conclusion when there wasthe manifest absence of bad practice or faith. If the business model changedso that the Respondent passed to the landowner the parking charges andreceived a fee for its management of the car park, there would be nodifference to the motorist as regards the payment of the parking charge.
This is not the case. In cases where this business model is adopted, there would be a significant different to the motorist. There would no longer be an incentive to issue parking charges; and every incentive to create car park management which makes it almost impossible for motorists to overstay. Other car park operators work in this way. In cases where ParkingEye get fired and other operators take over, both motorist and landowner satisfaction increase.
44 The important practical benefits to the consumer include:
(a) two hours free parking in the town centre;
(b) close proximity to the stores he wishes to visit;
(c) avoiding the inconvenience of having to drive round the town centre
looking for a parking meter or another car park; and
(d) because of the Respondent’s car park management regime, a
greater probability that he will immediately find a vacant parking
space in that car park
These are all low value benefits compared to the charge.
46 Those words assist the Respondent. In providing car parking facilities, the
Respondent is supplying a service “of a public nature”. A court considering
the term ought to take account not just of the interests of the Appellant and
Respondent, but also of the collective interest of all potential users. The
reality is that the absence of this term would be to the detriment of shoppers,
retailers, the landowner and the Respondent since it is more likely that there would be a lack of parking spaces because of overstaying or of nonshoppers
using the car park.
There was no evidence submitted that there would be a lack of spaces if shoppers spent more time on site. This may or may not be the case, but was not shown.
50 The Court in Aziz suggested that the relevant assessment should be
“whether the seller or supplier, dealing fairly and equitably with the consumer,
could reasonably assume that the consumer would have agreed to such a term in the individual contract negotiations.” It was the Appellant’s evidence
that he had used the car park on previous occasions. In all the
circumstances the Respondent could reasonably have assumed that the
Appellant would have agreed to the £85 overstaying charge in individual
contract negotiations.
This is absurd logic. Nobody in their right mind would expect a motorist would agree to this is they had the ability to negotiate.
53 That reasoning was accepted by the CJEU, which stated that the relevant
question is whether the term is appropriate for securing the attainment of its
objectives and does “not go beyond what is necessary to achieve them
It has already been established the charge is much higher than that necessary to achieve the aim, and that the council charge of £50/£25 would achieve this.
54 Parliament has provided within national law57 that parking charges may
constitute a legitimate deterrent. In considering the fairness of the term, the
question should be whether the sum of £85 (reducing to £50 for early
payment) “is higher than is necessary” to prevent overstaying.
This is an incorrect reading of the Act. Parliament is currently undergoing a consultation due to the huge number of complains due to rogue parking operators issuing floods of tickets since POFA 2012, the lack of regulation in the sector.
https://www.gov.uk/government/consultations/parking-reform-tackling-unfair-practices
The government is still analysing the feedback
“the question should be whether the sum of £85 (reducing to £50 for early payment) “is higher than is necessary” to prevent overstaying.”
This is indeed the question, and the answer is that it is higher than needed, as council charges in the area show.
57 An £85 charge is enough to ensure that the majority of motorists are careful
to leave within the allotted two hours’ period and is also within the range of
equivalent parking fines levied by local authorities.
£85 is clearly too much, and is absolutely not within the range levied by local authorities in that area for parking overstays
One common argument which ParkingEye used in the past but have not in this case is that the charge is fair because it is lower than the maximum allowed by the BPA. It is instructive to remember that that limit was set in a meeting of the parking companies, and essentially is what they thought they could get away with. The minutes of the
2012 BPA meeting which decided this clearly show this.
Happy Parking
The Parking Prankster
