Approaching 1 October 2012, on 6th June 2012 the parking companies held a meeting and decided on an upper limit of £100 for their Parking Charges. The minutes of that meeting are available here.They make interesting reading. Essentially, £100 was chosen because that was the maximum they thought they could get away with and still retain credibility. As a side note, the BPA did mention
The BPA is not able to establish a defacto ‘cap’ for PENs, which must always be a ‘genuine preestimation of losses incurred as a result of breach of contract’.
The parking companies accepted the new £100 cap, but immediately came unstuck once the new independent appeals service, POPLA, came into force. The huge problem was that across the industry, the average cost to the parking company per ticket issued was, and is, around £20. The cost of a ticket which is paid up immediately is even lower - around £5. This meant that POPLA routinely rejected all parking tickets if the charge level was queried, because a charge of 5 times the amount lost is not allowed under the laws of the country.
To keep some control of the situation, the British Parking Association banned POPLA from putting this as a reason to appeal on the POPLA website, because this would mean almost all parking charges would be cancelled. Instead, they required motorists to do some research, and to specifically query that the charge was not 'a genuine pre-estimate of loss' rather than just stating the charge was too high. They also required each individual motorist to raise the point, so that even if a charge was found to be too high and therefore breaching the British Parking Association code of practice, future appeals for the same operator and car park would still not be allowed unless they uttered the magic words.
The Government required POPLA to report all breaches of the code of practice back to the British Parking Association. However, this would have caused huge numbers of referrals leading to all the parking operators to be banned, so this requirement was quietly shelved.
This left companies like ParkingEye in something of a dilemma. They wanted to keep their charges at £100 and not drop them to £20, but to do so they needed some way to come up with a figure of £100 for their losses.
Of course, the correct way to do this would first be to estimate the losses, and then set the parking charge to that amount. Doing thing the other way round left ParkingEye with an insurmountable problem, because, as we will see later, their allowable losses are at most £20, and probably a lot less.
Their first attempt was to state the loss was the average loss to the shops on site caused by loss of a space.
ParkingEye operate the car park for and on behalf of the landowners. The amount charged represents an average loss to the Rheidol Retail Park applicable to the use of the car parking facility for longer than the allotted period. To put in economic terms, there are diminishing marginal returns, beyond the free fixed stay period which beget increasing marginal costs. Costs may include the cost of upkeep of the parking area, business rates, insurance, health and safety assessment and the car park management (provided by ParkingEye).The time limit set is based on the use profile of the average user (e.g. the purpose of the visit, how long they stay, how much they spend with the retailers) and time limits and the Parking Charges are calculated to provide a free tariff at the point of use of the service for those abiding by the terms and conditions of parking. Where motorists use the car park for more than the allotted free stay, there is often nil or minimal spending at the retail outlets, (e.g. where the motorist parks and leaves the site, using it as a free park and ride or free parking for accessing other amenities, not connected to the retail park), meaning there is a significant shortfall and costs outweigh the marginal return, hence the motorist must supplement this by payment of a Parking Charge. If the driver has spent money in the retail outlets at the site, they may qualify under the genuine shopper exemption operated by the landowner.
Ironically, this was ParkingEye's only ever genuine attempt at a pre-estimate of loss. As they collect parking charges on behalf of the landowner, it is the landowner's loss which is important, not ParkingEye's. However, it was a complete failure because losses would not occur unless trhe car park was full, even if it was,they would not approach £100. And finally, losses to retailers are not losses to landowners.
Their next attempt was to state their average cost per ticket was £57. Sometimes they stated it was £53. (Sometimes they stated both in the same case). The document evolved over time and eventually became a 6 page filibuster, which was mostly misdirection and irrelevant, as well as containing a significant number of lies, misinformation and partial information quoted out of context. There were only 2 paragraphs of real significance amongst the rainforest.
We have calculated the outstanding Parking Charge amount as a genuine pre-estimate of loss as we incur significant costs in managing this car park to ensure motorists comply with the stated terms and conditions and to follow up any breaches of these. These costs include (but are not restricted to); Erection and maintenance of the site signage, installation, monitoring and maintenance of the Automatic Number Plate Recognition systems, employment of office-based administrative staff, membership and other fees required to manage the business effectively including those paid to the BPA, DVLA and ICO, general costs including stationery, postage etc.
The average payment by motorists who have been issued with a Parking Charge by ParkingEye is circa £63. Circa 84% of this payment (circa £53) covers ParkingEye's costs. This information has been taken from ParkingEye's company accounts and are publicly available
This was no better. Most of these costs are general running costs of the business and therefore not allowable costs as they are not caused by the breach. However, the real point of the 6 page document was to misdirect the judge away from the fundamental issue that the charges were collected on behalf of the landowner, and therefore it is the landowner's loss which is significant. To get away with this, ParkingEye had to redact large areas of the contracts they showed to judges, so they would not become aware of this.
Of course, the misdirection also tries to stop the judge wondering why, if the loss is £53, the required payment is almost double that, or £100.
However, the figures contain a fundamental lie. Following the above invitation, ParkingEye's 'publicly available' accounts were obtained; a freedom of information request was also made on the DVLA to find out how many tickets ParkingEye issued during their accounting period. This showed the average cost per ticket issued was somewhat under £20, not the £53 claimed. This is of course in line with the industry average of around £20, calculated by analysing POPLA evidence packs.
Caught out in the lie, ParkingEye tried to bluster their way through and finally admitted that the average was not for all tickets issued, but only for all tickets paid. This of course meant that they were expecting motorists to pay for other motorists. The £100 covered the £20 from your ticket, but also 4 more £20s from motorists who had not paid up. This goes against conventional legal wisdom - the person causing a breach only has to pay for the costs caused by their breach, and not the costs of other transgressors.
ParkingEye were now stuck between a rock and a hard place. Their costs could not be justified by current interpretation of the law, so they needed that interpretation to change. Enter Mr Beavis.
Mr Beavis unwisely ignored the letters from ParkingEye (the charge would have been cancelled by POPLA) and ParkingEye eventually filed a claim - one of the 1,000 to 2,000 they file on a weekly basis.
The first hearing was adjourned because not enough time was allowed.
A senior judge then took over the case*. ParkingEye cases were clogging up his courts, and, according to him, he wanted some way to automatically strike out defences and award claims to ParkingEye so that hearings did not need to take place.
The second hearing was adjourned due to a well-documented hoax phone call.
In the third hearing, ParkingEye wheeled out one of the top lawyers in the country, Jonathan Kirk QC, and his sidekick, David Altaras. Although ParkingEye had lied to judges up and down the length of the country, Mr Kirk was not about to compromise his career by doing the same and lying that the cost per ticket was £53. He did not challenge the defence figures that the cost per ticket issued was under £20, and came up with a different argument.
ParkingEye's loss was £85 because that was the charge to the motorist. If the motorist did not pay then ParkingEye would get sacked by the landowner, thus losing the right to charge £85. Therefore, they would lose £85.
Now, if that was all the top legal brain in the country could come up with, any fool could see ParkingEye were in trouble. No judge was going to swallow that. (And in fact ultimately HHJ Moloney agreed the charge was not a genuine pre-estimate of loss.)
Something else was therefore needed.
Cue, 'commercial justification'.
Mr Kirk argued that the higher figures were needed to deter motorists and that there was therefore commercial justification for charging this amount.
The trouble with this argument is that all higher case law went against this. In higher case law 'commercial justification' had never before applied to consumer contracts, and contracts imposed without the change of negotiation. Only in contacts which had actually been negotiated between parties of equal powers and with legal representation was commercial justification allowed.
In all higher case law, commercial justification was explicitly disallowed for the purposes of deterrence.
In all higher case law, commercial justification only applied to a small part of the figure, and was not used to inflate it by 400-500%.
Additionally, no evidence was put forward to justify that the figure needed to be as high as £85 to achieve deterrence. Other car parks around the country work perfectly well when the figure is between £20 and £30.
Despite these inconveniences, Mr Kirk was able to convince HHJ Moloney that commercial justification applied. He is after all, one of the top lawyers in the land. So important in fact, that he is also advising Trading Standards on the level of charges parking companies should be allowed to charge motorists. (No conflict of interests there then! Move along, nothing to see here)
HHJ Moloney himself admitted he was troubled with his decision. Barry Beavis, chip shop owner with a free lay representative to help, had faced two top lawyers, money no object. In his judgment HHJ Moloney explicitly stated that had there been a level playing field for legal representation, the verdict may have gone otherwise.
This brings us to the Court of Appeal Hearing due to be heard tomorrow.
Mr Beavis now has substantially bigger guns on his side, with one of the country's other top lawyers acting for him, Sa'ad Hossain QC. The Consumer Association (Which) have also chipped in. They are worried because if the interpretation of the law was to change so radically it would open the door for any business to charge what it liked for penalties simply by structuring itself in a way that depended on the penalty income.
It will be interesting to see what the actual legal arguments put forward on the day turn out to be. Whatever way the result goes, the way car parks in this country are managed is due to change fundamentally. It will either be a free-for-all feeding frenzy by the operators, or car parks will have to be managed in a way beneficial to all parties, with charges at a fair level, and contracts which encourage fleecing the motorist and adopting dodgy tactics outlawed. The Prankster has previously published a list of the dodgy tactics used by ParkingEye. The Prankster believes these tactics are a direct result of ParkingEye only taking money if a breach of contract occurs.
The Parking Prankster
* The original hearing by HHJ Moloney was ParkingEye v Beavis and Wardley. However, Mr Wardley decided not to appeal.