Parking Eye issue 17k court claims

Umkomaas

If somebody went on Dragons' Den asking for investment in a that kind of business model, what would Duncan Bannatyne say?

I think he'd say 'I'm in', after all, the loss-leader court strategy is about scaring the crap out of anyone else caught in their net, to pay up - in case they too receive court papers.

£9m a year profit would be irresistible to any of the dragons; they'd be fighting with each other to get their snouts in the trough. Do dragons have snouts?

:rotfl:

arabesque_101

bargepole wrote: »

As the claims are almost always for under £200, and only in very rare cases are full costs awarded to the claimant, that means that with court fees, PE are losing around £100 for every case they win, and £400+ for every one they lose.

Parking Eye don't take these individual cases to court to win money on these cases. They do it to win a reputation - so that the hundreds of thousands that receive a PCN from Parking Eye pay immediately without fuss because they have heard that thousands of these cases have been to court.

One if their accountants is doing sums and working out the right percentage to take to court so that their business earns the highest possible revenue overall. They are watching these figures and looking for the sweet spot. The spot where they are earning the maximum revenue of paid PCN's versus costs of doing their business. Taking people to court is just considered one of their costs of doing business. The retail industry has "loss leaders" whereby a business will advertise one product for a loss to get customers through the door to buy products that generate a profit. Taking a loss in one area of a business can generate larger overall profits. It is only the bottom line that a company cares about.

bargepole

arabesque_101 wrote: »

Parking Eye don't take these individual cases to court to win money on these cases. They do it to win a reputation - so that the hundreds of thousands that receive a PCN from Parking Eye pay immediately without fuss because they have heard that thousands of these cases have been to court. ...

Yes I'm sure that's right, but the figures from DVLA data requests, and PE's published accounts, suggest that only around 30% of their fake PCNs are paid, and the court claims will only account for around 7% of non-payers.


When they started issuing in bulk just over a year ago, they were claiming a 90% win rate with claims which went to a full hearing. That has since dropped to under 60%, although it may be rising again now, following the Beavis ruling.


They are taking a big gamble by letting that case go all the way to the Court of Appeal, with eminent QCs arguing for both sides in what is likely to be a 50:50 outcome. A ruling against them will put a severe dent in their business.


Another fact is that a surprisingly high percentage of cases end up as default judgments, this is where either no defence is submitted, or the defendant doesn't turn up to court. PE then have to pay an additional £100 for the court bailiffs to enforce judgment, and many of the people are either untraceable or have no worthwhile assets.

arabesque_101

The other figure to factor into their win/lose rate is the change in figures month on month and year on year.

If only around 30% of Parking Eye's PCNs are paid, this can be put down to all the information on forums pre-POFA that says to ignore the things. There are far more posts saying to ignore, and more press articles saying to ignore compared with those saying to appeal, given that we are not yet 2 years out from the introduction of POFA. And its just not the posts and press articles, it is the folklore out there being passed around in pubs "ignore that thing, I got one three years ago and ignored it and it went away". As more and more people understand that they can no longer ignore, more and more may end up paying.

Do you have the percentage figure of paid Parking Eye PCN's from one year ago, and from two years ago?

bargepole

arabesque_101 wrote: »

... Do you have the percentage figure of paid Parking Eye PCN's from one year ago, and from two years ago?

We can only make assumptions by comparing the number of DVLA data requests with PE's published turnover figures in their accounts.


The ratio in 2011/12 is virtually identical to 2012/13, which includes revenue up to the end of August 2013.


The next set of accounts, up to Aug 2014, may be more revealing.

arabesque_101

OK, I see.