Ukpc - sorry another question

debs1505

Some bed time reading for you

Genuine Pre-Estimate of Loss
NEW REPONSE – 15.09.2014

Introduction
It is confidently argued that the parking charge in question should be fully enforced by the independent appeals service. UK Parking Control Ltd (UKPC) is entitled by common law to be fully compensated for the genuine pre-estimate of loss stemming from the appellant’s breach of contract.
The Charge Represents a Genuine Pre-Estimate of Loss
It will come as no surprise to read that the burden of proving that a clause is a penalty clause, not representing a genuine pre-estimate of loss, lies upon the person who seeks to escape liability under it (Robophone Facilities Ltd v Blank [1966] 1 WLR 1428, 1446, per Diplock LJ). This sound interpretation of the law has also been endorsed by both Professor Richard Hooley of Cambridge University and Allen and Overy LLP (2008).
Nevertheless, in order to assist POPLA in resolving this dispute as effectively as possible, UK Parking Control Ltd has provided a redacted breakdown of the greatest potential loss stemming from the breach of contract.
Since the breached clause provides for liquidated damages, the specific loss caused to UK Parking Control Ltd for this particular breach is not at issue. Lord Dunedin in Dunlop Pneumatic Tyre Company Co Ltd v New Garage & Motor Co Ltd [1915] AC 79 explains that quantifying the loss from a single breach in such cases as these would be ‘impracticable’ and that it would be ‘quite reasonable’ to estimate damage from a single breach at a single figure. The greatest potential loss for a breach has been provided, since it is certain that whether liquidated damages represent a penalty or compensation should be assessed in relation to whether the sum is ‘extravagent and unconscionable by comparison with the greatest loss that could be proved’ (emphasis added) (Clydebank Engineering and Shipbuilding Co Ltd v Don Jose Romas Yzquierdo y Castenda [1905] AC 6, per Lord Davey and Parking Eye Ltd v Beavis and Wardley [2014] 3JD05152-69, per HHJ Moloney QC).
It is hoped that the Assessor can appreciate that the provision of a full breakdown would highly prejudice the commercial interests of UK Parking Control Ltd. However, the redacted version’s heads of costs mirror those recommended by Mr Recorder Lowe QC in James Paul Mayhook v National Car Parks [2012] 1CM00569, para 66. Further, the full version of the breakdown has been reviewed and commended by Steve Clark (Head of Operational Services for the British Parking Association) and our lawyers. It is also strongly doubted that a full breakdown would assist the Assessor any more than the redacted version, since POPLA is understandably ill-equipped to cast judgement on each specific cost involved in effective parking management by hundreds of British Parking Association members.
As aforementioned, the heads of costs chosen in the provided breakdown have been judicially endorsed. The site-based costs include (but are not limited to) the cost of producing the charge itself with accompanying weatherproof wallet, which directly relates to the breach. The costs involved in validating the parking charge include checking that the registration plate matches the vehicle in question, which directly relates to the breach. The appeals’ costs would obviously not be incurred but for the breach. These costs include the telephone costs of the call centre, employee costs to review the appeal and legal fees. POPLA costs are also directly attributable to the breach. They include the preparation of evidence packs, which are completed by employees of different pay grades and takes time to complete. Payment costs include the bank and employee costs involved in processing the payment of parking charges issued for breaches. In line with the Protection of Freedoms Act 2012, DVLA costs include requesting from the DVLA the Registered Keeper details of the relevant vehicle, which was parked in breach of contract. Written communication costs include the cost to produce and send initial notices to the Driver/Registered Keeper and final notices, which are required to follow up on payments of charges. If charges remain unpaid, a debt recovery company will be employed to obtain compensation for the breach on our behalf. Costs involved under this head include employing the debt recovery company’s services and preparing sufficient information to allow the external company to pursue the debt. Legal action costs include the cost of preparing cases to take a number of people to court per year. UKPC has started taking more people to court and anticipate we will continue to take more in the future. As a result, we have sat down with our lawyers and advisors to try and estimate the likely costs involved in doing so.
It should be noted that for relevant costs an aggregate has been calculated and an average applied, where costs differ depending on the breach in question. This is well-established practice when calculating certain costs in determining liquidated damages for breaches. Largest Conceivable Loss is not factored down to take account of the likeliness that each individual event will occur. It is nevertheless included to heed Lord Davey’s emphasis on making a comparison between the charge and ‘the greatest loss that could be proved’ (emphasis added) (Clydebank Engineering and Shipbuilding Co Ltd v Don Jose Romas Yzquierdo y Castenda [1905] AC 6, per Lord Davey and Parking Eye Ltd v Beavis and Wardley [2014] 3JD05152-69, per HHJ Moloney QC). Factored Loss is, however, factored to take into account the likelihood of each event occurring. Grand Total of costs has been split into two subtotals to reflect the typical costs incurred by UKPC when payment of the charge is made within 14 days of issuance and when payment is made afterwards. As a result, Subtotal 1 reflects the typical costs incurred for charges which are paid at the discounted rate for early payment, whereas Subtotal 2 reflects the typical late payment costs.
Many costs, however, have not been included. Court costs would likely be sought to be recovered at court, which is why it has been omitted under legal action costs. Though it could be argued that including the following costs is commercially justified, we have taken the view not to, since these costs are incurred independently of breaches occurring: head office rent rates, wages of employees not directly dealing with parking enforcement, signage on site, warden training, hiring costs, company insurance, membership to the ATA, installation of ANPR equipment, installation of pay and display equipment, warning flyers, iWarden software, employee uniform and employing area managers.
The Predominant Purpose of the Charge
The predominant purpose of this charge is to compensate UK Parking Control Ltd for the predetermined loss caused by the breach of contract. The provided breakdown of costs firmly evidences this notion. Another major purpose is to ensure the effective management of parking areas by the operator. It is superfluous to say that another effect of the charge is to deter parties from breaching the contract. Potentially having to compensate another for breach of contract would naturally create some deterrent effect.
However, to say that deterrence is the predominant purpose of the charge would be wholly unfounded. Even if this unsubstantiated assertion were to be entertained, high judicial authority has stated that even this does not preclude the charge being enforceable. In the recent Court of Appeal case of Talel el Makdessi v Cavendish Square Holdings [2013] EWCA Civ 1539, Clarke LJ says that despite the predominant purpose of a charge being to deter, a clause can still be upheld if there is a ‘commercial justification’ for it. Further support for this approach can be found in the combined wisdom of the EU and Parliament in the Unfair Terms Regulations 1999, which effectively strike a balance between the commercial interests of the receiving party and the fairness towards the paying party.
The clause in question is unambiguously commercially justified. As aforementioned the charge represents a genuine pre-estimate of loss and is compensatory in nature. It is also agreed with HHJ Moloney QC that the supply of parking is a ‘limited and valuable commodity’, thus commercially justified for a clause to deter parties from breaching the contract. It is further agreed that, in the present context, the deterrence factor is thus an ‘entirely legitimate and acceptable one’, where ‘ordinary principles of compensation for breach have no application’ Specifically, HHJ Moloney QC was minded to look at the profit margin of Parking Eye Ltd when deciding the commercial justification of the clause. Though UK Parking Control Ltd will not release its profit margins for reasons of commercial sensitivity, comparing its figures with that of those revealed by Parking Eye Ltd, it is certain that the judiciary would accept the level of profitability the company maintains (Parking Eye Ltd v Beavis and Wardley [2014] 3JD05152-69).
Conclusion
UK Parking Control Ltd urges the Assessor to find in its favour for the solid reasoning which has been provided. Considering the detailed and thorough response provided by UKPC, it would be appreciated that any finding against UKPC is accompanied by detailed and thorough reasoning for making such an adverse finding, supported by judicial authority.

debs1505

Just re-read their appeal and the keeper of the car has 2 different names! One spelt correctly and the other incorrectly (which still reads as a surname you can find in the telephone directory, not just a jumble of letters)!!

fairway76

This is interesting - are they then saying that the largest conceivable loss from a parking charge is £60?

If so, why do they charge £100 at some "free" car parks?

neil.net

Have a look at http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCEQFjAA&url=http%3A%2F%2Fwww.aoseminars.com%2Ffiles%2Fseminar_24%2FPenalty_Clauses.doc&ei=eVU6VeLvBpHvat3KgZAG&usg=AFQjCNFgaYevB4FV2AXANKc03H0eTwYY-g&bvm=bv.91665533,bs.1,d.ZWU



Open the file (it's a word document), you will see that UKPC have simply copied and amended the final paragraph of section 3 of the introduction:

It will come as no surprise to learn that the burden of proving that a clause is a penalty clause, not representing a genuine pre-estimate of loss, lies upon the person who seeks to escape liability under it (Robophone Facilities Ltd v Blank [1966] 1 WLR 1428, 1446, per Diplock LJ)

If you look at the footer of the title page it says

These are only lecture notes. They do not contain definitive advice. They should not even be used as the basis for giving definitive advice without checking the primary sources.

So where is the endorsement...? Maybe something to include in your POLA reply...?

debs1505

neil.net wrote: »

Have a look at http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCEQFjAA&url=http%3A%2F%2Fwww.aoseminars.com%2Ffiles%2Fseminar_24%2FPenalty_Clauses.doc&ei=eVU6VeLvBpHvat3KgZAG&usg=AFQjCNFgaYevB4FV2AXANKc03H0eTwYY-g&bvm=bv.91665533,bs.1,d.ZWU



Open the file (it's a word document), you will see that UKPC have simply copied and amended the final paragraph of section 3 of the introduction:

If you look at the footer of the title page it says

So where is the endorsement...? Maybe something to include in your POLA reply...?

Well spotted!

Do I need to do a popla reply? Or do you mean if the appeal is denied?

neil.net

You can respond to UKPCs "evidence" pack and rebuke any points they have made, and email it to POPLA. The Dunlop case and it being "impracticable" to calculate losses is also (I believe) a red hearing too. The Dunlop case involved an issue where a customer could potentially cause in-direct losses, hence why it would be difficult to ascertain the losses in that instance. PPC's costs and losses should be much easier to identify since they will relate to their operations and activities.

debs1505

Wel, letter from popla stated we would hear outcome "on, or soon after, 30 April". Almost two weeks "after" said date haven't heard anything!

ColliesCarer

Would email them and ask the reason for the delay

debs1505

WE WON!!!

I'm unable to copy as and paste, but basically the letter from popla says

"The operator does not have the authority from the land owner to issue car parking notices...."

Thank you to everyone for all the help supplied :T