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Why charges imposed by Private Parking Companies are unenforceable.
JayL
Posts: 1 Newbie
Why charges imposed by Private Parking Companies are unenforceable.
Unlike fines, which are issued by Local Authorities or the Police and are governed by Statuary Law, charges imposed by PPC’s come within the remit of contract law.
Contracts are determined to exist in English Law under the principle of Offer and Acceptance.
Basically, the PPC offers parking facilities according to terms, often that you agree to pay a fee or that you only park for a specified period of time. By entering the park, you are able to negotiate with those terms (consideration), and choose to comply or leave. Therefore, signage is key: signage establishes the conditions of the offer enabling you to decide whether or not to enter into a contract. No, or inadequate, signage, equals no contract.
The offeror (the parking company) made an offer and the offeree (the driver) expresses acceptance by parking. In the eyes of the law, this constitutes a contract.
A PPC requests payment of a charge when they allege that you breached the terms of the contract. (You being the driver!). You may have overstayed a maximum stay period, or you failed to pay and display. For this, the PPC will claim that you owe them a sum of money, varying from anything like £50 to £100+.
These are unenforceable as Private companies have no legal authority, unlike the Police or Local Authorities, to impose fines or penalties. According to contract law, all that an individual/company is entitled to claim from another for a breach of contract are damages.
The purpose of damages is to reinstate the claimant to a position that they would have been in had the contract been performed properly. Therefore, if you parked without payment for one hour, with one hour’s parking costing £1 according to the PPC’s terms, you owe £1. To get around this nagging issue, PPC’s argue that they stipulate what damages a consumer is liable to pay, for non-compliance with the terms of a contract, on their signage: “failure to comply with terms (etc) will incur a penalty charge notice being issued of £X”. It is legal for contracting parties to stipulate predetermined damages.
However, such provisional damages are NOT enforceable according to contract law where those damages are deemed to actually be penalties; because private individuals/companies cannot issue penalties to another (the logic is simple, if private individuals/companies could issue penalties to another, I could make up a rule stating that no-one is to enter my driveway between 7 and 10am, then sue the postman if he did). Penalties, in the legal sense, were defined by the Law Lord in Dunlop Pneumatic Tyre Ltd v. New Garage and Motor Co Ltd 1915:
‘The essence of a penalty is a payment of money stipulated as in terrorem of the offending party...’
And in deciding whether or not stipulated damages between contracting parties are actually penalties, the judge wrote that:
‘It will be held a penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach.
'It will be held to be a penalty if the breach consists only in not paying a sum of money, and the sum stipulated is a sum greater than the sum which ought to have been paid.'
‘There is a presumption (but no more) that it is a penalty when a single lump sum is made payable by way of compensation, on the occurrence of one or more or all of several events, some of which may occasion serious and others trifling damage.’
The extortionate charges imposed by PPC’s clearly, therefore, amount to penalties as they reflect, in no way whatsoever, any damage caused by a parties non-compliance with contractual terms. As mentioned, if you f ailed to pay £1 to park for one hour, then what you owe is £1. It is for this reason that it is safe to ignore their requests for ridiculous sums of money, as their requests are de facto penalties, and as such, are illegal and unenforceable.
It is also for this reason that a PPC's threat of court action can be ignored. They do not act in accordance with English Contract Law and they know that their claims will be unsuccessful in county court. Their threats of sending bailiffs to remedy the debt, following warnings from “solicitors” or "debt collectors", are also empty; bailiffs can only act on court orders and the solicitors or debt-collectors are as bogus and inept as the PPC itself. (If a PPC did have the audacity to send someone to your home, DO NOT let them into your home and forcefully tell them to leave as you owe nothing, and inform them that failure to leave will result in the Police being called for trespass.)
Just to be sure, the law in practice can be seen in Excel Parking Services v Hetherington-Jakeman, 2008. In this case the judge decided that the motorist had indeed entered into a contract with Excel Parking Services but quashed their request for over £300 on the basis that the sum was indeed a penalty, being exorbitantly high in comparison to any losses, and because the companies’ tactics were engineered to intimidate and frighten the consumer into paying. So rest assured, PPC's don't do court.
Do not fold, either, when a PPC provides “evidence” of your contravention of the rules by way of photographs (designed to intimidate and look professional) that record a car entering and leaving a park. This is pointless. No offence has been committed, only an alleged breach of contract and these pictures do not prove who was driving the vehicle at the time (the driver being liable where private companies are concerned!). Therefore, the photographic evidence is totally pointless. Moreover, the judge in Excel Parking Services v Hetherington-Jakeman pointed out that for all he knew, such photographic evidence could have been doctored by the company, and it is indeed possible for companies to do this.
Besides the fact that PPC charges are penalties, thus unenforceable, they can also be deemed unenforceable on the grounds of unfairness (unconscionability). In Earl of Aylesford v. Morris 1875 the presiding judge decided that there is always unfairness ‘presumed or inferred from the circumstances or conditions of the parties contracting [when there is] weakness on one side, usury on the other, or extortion...’ The Unfair Terms in Consumer Contracts Act, 1999, stipulates in Section 5(1) that a contract is unfair where ‘it causes a significant imbalance of the parties rights and obligations arising under the contract to the detriment of the consumer’ and Schedule 2, Regulation 5(5), category 1)e) of the same Act defines that a contract is unfair by ‘requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation’. Also regarding unfairness, the Consumer Credit Act 1974 stipulates in section 138 (1) a) that a contract is unfair when it ‘requires the debtor or a relative of his to make payments which are grossly extortionate’. PPC charges fall within this category of unconscionable conduct.
I apologise if this is repetition of information available elsewhere on this (brilliant) website/forum but it’s designed to ease any worried-minds out there by showing that it is perfectly legal to ignore these illegal and unenforcable charges issued by private companies. I studied contract law some time ago, and all of the above is vouched for in any good academic text book on English Contract Law. Knowledge is power, and being aware of the legal situation gave me the confidence to ignore these scammers. Any reader, please do the same!!!! (Apologies to the more seasoned posters too, who will know all of the above. It's just that I know people get worried about these things when they receive their first charge from a private company and knowing the legal situation is always assuring!)
Oh, and should a PPC become particularly earnest in their pursuit of an alleged debt, it is always worth knowing about Section 40 of the Administration of Justice Act 1970:
1. A person commits an offence if, with the object of coercing another person to pay money claimed from the other as a debt due under a contract he-
- harasses the other with demands for payment which, in respect of their frequency, or the manner or occasion of making any such demand, or of any threat or publicity by which any demand is accompanied, are calculated to subject him or members of his family or household to alarm, distress or humiliation;
- falsely represents, in relation to the money claimed, that criminal proceedings lie for failure to pay it;
- falsely represents himself to be authorised in some official capacity to claim or enforce payment; or
- utters a document falsely represented by him to have some official character, or purporting to have some official character which he know it has not.
2. A person may be guilty of an offence by virtue of sub-section (1) (a) above if he concerts with others in the taking of such actions as is described in that paragraph, notwithstanding that his own course of conduct does not by itself amount to harassment.”
Unlike fines, which are issued by Local Authorities or the Police and are governed by Statuary Law, charges imposed by PPC’s come within the remit of contract law.
Contracts are determined to exist in English Law under the principle of Offer and Acceptance.
Basically, the PPC offers parking facilities according to terms, often that you agree to pay a fee or that you only park for a specified period of time. By entering the park, you are able to negotiate with those terms (consideration), and choose to comply or leave. Therefore, signage is key: signage establishes the conditions of the offer enabling you to decide whether or not to enter into a contract. No, or inadequate, signage, equals no contract.
The offeror (the parking company) made an offer and the offeree (the driver) expresses acceptance by parking. In the eyes of the law, this constitutes a contract.
A PPC requests payment of a charge when they allege that you breached the terms of the contract. (You being the driver!). You may have overstayed a maximum stay period, or you failed to pay and display. For this, the PPC will claim that you owe them a sum of money, varying from anything like £50 to £100+.
These are unenforceable as Private companies have no legal authority, unlike the Police or Local Authorities, to impose fines or penalties. According to contract law, all that an individual/company is entitled to claim from another for a breach of contract are damages.
The purpose of damages is to reinstate the claimant to a position that they would have been in had the contract been performed properly. Therefore, if you parked without payment for one hour, with one hour’s parking costing £1 according to the PPC’s terms, you owe £1. To get around this nagging issue, PPC’s argue that they stipulate what damages a consumer is liable to pay, for non-compliance with the terms of a contract, on their signage: “failure to comply with terms (etc) will incur a penalty charge notice being issued of £X”. It is legal for contracting parties to stipulate predetermined damages.
However, such provisional damages are NOT enforceable according to contract law where those damages are deemed to actually be penalties; because private individuals/companies cannot issue penalties to another (the logic is simple, if private individuals/companies could issue penalties to another, I could make up a rule stating that no-one is to enter my driveway between 7 and 10am, then sue the postman if he did). Penalties, in the legal sense, were defined by the Law Lord in Dunlop Pneumatic Tyre Ltd v. New Garage and Motor Co Ltd 1915:
‘The essence of a penalty is a payment of money stipulated as in terrorem of the offending party...’
And in deciding whether or not stipulated damages between contracting parties are actually penalties, the judge wrote that:
‘It will be held a penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach.
'It will be held to be a penalty if the breach consists only in not paying a sum of money, and the sum stipulated is a sum greater than the sum which ought to have been paid.'
‘There is a presumption (but no more) that it is a penalty when a single lump sum is made payable by way of compensation, on the occurrence of one or more or all of several events, some of which may occasion serious and others trifling damage.’
The extortionate charges imposed by PPC’s clearly, therefore, amount to penalties as they reflect, in no way whatsoever, any damage caused by a parties non-compliance with contractual terms. As mentioned, if you f ailed to pay £1 to park for one hour, then what you owe is £1. It is for this reason that it is safe to ignore their requests for ridiculous sums of money, as their requests are de facto penalties, and as such, are illegal and unenforceable.
It is also for this reason that a PPC's threat of court action can be ignored. They do not act in accordance with English Contract Law and they know that their claims will be unsuccessful in county court. Their threats of sending bailiffs to remedy the debt, following warnings from “solicitors” or "debt collectors", are also empty; bailiffs can only act on court orders and the solicitors or debt-collectors are as bogus and inept as the PPC itself. (If a PPC did have the audacity to send someone to your home, DO NOT let them into your home and forcefully tell them to leave as you owe nothing, and inform them that failure to leave will result in the Police being called for trespass.)
Just to be sure, the law in practice can be seen in Excel Parking Services v Hetherington-Jakeman, 2008. In this case the judge decided that the motorist had indeed entered into a contract with Excel Parking Services but quashed their request for over £300 on the basis that the sum was indeed a penalty, being exorbitantly high in comparison to any losses, and because the companies’ tactics were engineered to intimidate and frighten the consumer into paying. So rest assured, PPC's don't do court.
Do not fold, either, when a PPC provides “evidence” of your contravention of the rules by way of photographs (designed to intimidate and look professional) that record a car entering and leaving a park. This is pointless. No offence has been committed, only an alleged breach of contract and these pictures do not prove who was driving the vehicle at the time (the driver being liable where private companies are concerned!). Therefore, the photographic evidence is totally pointless. Moreover, the judge in Excel Parking Services v Hetherington-Jakeman pointed out that for all he knew, such photographic evidence could have been doctored by the company, and it is indeed possible for companies to do this.
Besides the fact that PPC charges are penalties, thus unenforceable, they can also be deemed unenforceable on the grounds of unfairness (unconscionability). In Earl of Aylesford v. Morris 1875 the presiding judge decided that there is always unfairness ‘presumed or inferred from the circumstances or conditions of the parties contracting [when there is] weakness on one side, usury on the other, or extortion...’ The Unfair Terms in Consumer Contracts Act, 1999, stipulates in Section 5(1) that a contract is unfair where ‘it causes a significant imbalance of the parties rights and obligations arising under the contract to the detriment of the consumer’ and Schedule 2, Regulation 5(5), category 1)e) of the same Act defines that a contract is unfair by ‘requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation’. Also regarding unfairness, the Consumer Credit Act 1974 stipulates in section 138 (1) a) that a contract is unfair when it ‘requires the debtor or a relative of his to make payments which are grossly extortionate’. PPC charges fall within this category of unconscionable conduct.
I apologise if this is repetition of information available elsewhere on this (brilliant) website/forum but it’s designed to ease any worried-minds out there by showing that it is perfectly legal to ignore these illegal and unenforcable charges issued by private companies. I studied contract law some time ago, and all of the above is vouched for in any good academic text book on English Contract Law. Knowledge is power, and being aware of the legal situation gave me the confidence to ignore these scammers. Any reader, please do the same!!!! (Apologies to the more seasoned posters too, who will know all of the above. It's just that I know people get worried about these things when they receive their first charge from a private company and knowing the legal situation is always assuring!)
Oh, and should a PPC become particularly earnest in their pursuit of an alleged debt, it is always worth knowing about Section 40 of the Administration of Justice Act 1970:
1. A person commits an offence if, with the object of coercing another person to pay money claimed from the other as a debt due under a contract he-
- harasses the other with demands for payment which, in respect of their frequency, or the manner or occasion of making any such demand, or of any threat or publicity by which any demand is accompanied, are calculated to subject him or members of his family or household to alarm, distress or humiliation;
- falsely represents, in relation to the money claimed, that criminal proceedings lie for failure to pay it;
- falsely represents himself to be authorised in some official capacity to claim or enforce payment; or
- utters a document falsely represented by him to have some official character, or purporting to have some official character which he know it has not.
2. A person may be guilty of an offence by virtue of sub-section (1) (a) above if he concerts with others in the taking of such actions as is described in that paragraph, notwithstanding that his own course of conduct does not by itself amount to harassment.”
0
Comments
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A reasonable summary.
However. The inclusion of references to Excel v. Hetherington-Jakeman (I will not italicise it) is, IMHO, a mistake as it plays into PPC hands by helping to perpetuate the myth they started, that county court decisions establish some form of precedent which of course they most certainly do not.
Reference to s.138 Consumer Credit Act 1974, in the situation of a PPC case, is somewhat irrelevant as that section refers only to "credit bargains" and in any event was repealed by the Consumer Credit Act 2006 (s.140A). It is appreciated that this was probably included as an illustration as to the meaning of unfairness in the context of a contract.
Whilst s.40 Administration of Justice Act is frequently quoted I am unaware of any TS action to enforce it even though it has been obliquely (and sometimes not so obliquely) referred to by judges in PPC cases. Being aware of it is on ething. Being able to obtain or oblige an enforcement of it is an entirely different thing.My very sincere apologies for those hoping to request off-board assistance but I am now so inundated with requests that in order to do justice to those "already in the system" I am no longer accepting PM's and am unlikely to do so for the foreseeable future (August 2016).
For those seeking more detailed advice and guidance regarding small claims cases arising from private parking issues I recommend that you visit the Private Parking forum on PePiPoo.com0 -
I would also add the court case where OPC got ripped to pieces earlier this year.0
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