Complaint Against Green Commute Initiative Escalated to Trading Standards & Court Claim Filed

QrizB

Okell said:
I'd be interested to know (1) how much of the £3k salary sacrifice the OP is trying to reclaim via court, and (2) whether GCI are suing him for the loss of their bike.

Also (3) whether GCI have informed HMRC of the breach of the C2W scheme rules and OP (via their employer) is now liable for the unpaid income tax and NI.

CycleClaimant

Herzlos said:

Your salary, pre-tax, was reduced by £3000, but depending on how much tax you pay it may have only cost you as little as £1500. 

Your insurance payout would also be either to clear the outstanding finance on the bike (the final payment you'd make to buy the 5 year old bike) or the current value of the bike before it was lost. Unless you had a new-for-old policy you'd only be entitled to maybe half of what you paid but the important factor here is that you didn't own the bike so unlikely to see any money anyway. 

So whilst I fully empathise that it's a crap situtation to be in, and that GCI should have rejected the sale if they'd noticed that the bike you were buying wasn't legal. 

They'd have *some* liability but it also sounds like you knew at the time it wasn't fully road legal and didn't query it. But I don't think it'd be reasonable for GCI to be giving you the retail value for the bike because (a) you didn't actually pay retail for it and (b) you still got 2 years of rental of it, as per the agreement. I'm not sure what you could reasonably expect from them in terms of a good will gesture - possibly clearing the outstanding finance and/or a discount on a new, compliant e-bike? 

I appreciate you taking the time to break down the situation. A couple of points worth clarifying, as I think it helps show why I've taken this path.

My claim is for the full contract value of over £3,000. This is because the full gross amount was paid to GCI for the goods. If I were only refunded the net cost I paid from my payslip, the supplier (GCI) would be unjustly enriched by keeping the tax benefit that I was legally entitled to.

Regarding the insurance, my insurer explicitly asked me to find a like-for-like replacement, which is now valued at around £3,500, and confirmed they would have paid this if the original bike had been compliant. The two years of use you mention is irrelevant; my claim is for the total financial loss that directly resulted from GCI's breach of contract.

Finally, on the point of me knowing it wasn't "fully" road legal - there is no such thing as "partly" road legal. A bike is either compliant or it is not. My genuine understanding was that the bike was completely compliant, an understanding based on my good-faith reliance on the formal approval process of the expert scheme provider.

My claim isn't seeking a "goodwill gesture." It is seeking full compensation for the direct financial loss caused by the supplier's admitted professional negligence, and I don't think that's unreasonable at all.

CycleClaimant

Okell said:

On reflection I'm inclined to agree with the OP that the hire contract between GCI and the OP is covered under s6(1) of the CRA, but I'm not necessarily persuaded that the supply of an illegal bike is a breach of the CRA, as the OP selected the bike himself knowing that it had 2 power modes, but was under the mistaken understanding that if he only used the "legal" power mode the bike was not illegal.

He misunderstood the legal position and was wrong.

It could be argued that the bike was not of satisfactory quality under s9(3)(a), but again I'm not sure if GCI would argue that the OP had enough knowledge about the bike (ie two power modes - one legal and the other illegal) that he should have understood that it was only fit for the purpose of riding on private land.

Having said that, it does seem odd that GCI apparently authorised the supply of an illegal bike - even if the OP selected it himself...

I'd be interested to know (1) how much of the £3k salary sacrifice the OP is trying to reclaim via court, and (2) whether GCI are suing him for the loss of their bike.

You're right, I did misunderstand the complex point of EAPC law regarding the bike's dual-mode capability. My entire claim is based on the fact that I, as a layman, relied on the formal approval process of the expert scheme provider (GCI) to catch exactly that kind of technical non-compliance.

Their duty of care in this is confirmed by two key pieces of evidence:

1. Their own website publicly states that "the final decision as to whether it's suitable for the scheme is down to Green Commute Initiative."

2. Their Managing Director has admitted to me in writing that their system is designed to reject non-compliant bikes, but that their process failed.

To answer your questions:

1. I am reclaiming the full financial loss from my salary, which is over £3,000. My claim is for the breach of a contract of that value.

2. No, GCI are not suing me. It would be an extraordinary position for them to take, given that the bike was only uninsurable due to their own admitted professional negligence.

Herzlos

That seems fair. 

I don't think *your* loss is £3,000 though. But if you're propsing that they refund your payroll, and thus you pay the approriate tax/NI on it, then no-one would be gaining financially. 

CycleClaimant

Herzlos said:

That seems fair. 

I don't think *your* loss is £3,000 though. But if you're propsing that they refund your payroll, and thus you pay the approriate tax/NI on it, then no-one would be gaining financially. 

That's a fair, logical sounding point. It's something I considered and was worried about before looking into it further.

While my "out of pocket" cost from my payslip was less than the £3k+, the purpose of a court award for breach of contract is to put me back in the financial position I would have been in if the contract had been properly performed.

If the contract had been performed correctly, I would have a bike worth over £3k. The fact that I used a legitimate, government approved tax incentive to acquire it doesn't reduce the bike's value or the value of my loss.

Imagine you have a 50% off voucher for a specific shop. You buy a £100 kettle for £50. The kettle is faulty and breaks. The shop can't just refund you £50, because that doesn't make you whole. You no longer have the kettle, and your one-time voucher is gone. The value of your loss is £100, as that's what it costs to get the item you were promised.

The tax saving was my "voucher." GCI's negligence has effectively wiped out that benefit and the asset it secured. The court's role is to compensate me for that loss. If it were ever determined that tax was retrospectively owed because GCI administered a non-compliant scheme, the liability for that tax would fall squarely on them as the expert provider, not on me.

Herzlos

I guess putting you back in the same position would be a new voucher for the £3k for you to go and purchase another bike.

The kettle argument doesn't hold up; giving you the £50 back puts you back into the position you were immediately before you bought the kettle, regardless of what the kettle costs. 

QrizB

Herzlos said:

I guess putting you back in the same position would be a new voucher for the £3k for you to go and purchase another bike.

OP has had three years use of the bike; the three-year-old bike that was stolen was worth considerably less than £3k. (GCI have set a value of £1 for the bike at the end of the scheme, which OP has agreed with. As the bike was about halfway through the scheme, it might have a residual value of about half the purchase price.)

Exactly what OP is entitled to (if, indeed, the judge decides they're entitled to anything) remains to be seen.

silverwhistle

That's something I was wondering about. If the bike had been insurable would the  value supplied by the insurer's have been subject to the depreciation factor normally applied to these cases?

On the subject of different bike specs, that's an interesting one. My Van Moof bike is made for both the European and US markets and as such had two available maximum assistance speeds: 20 and 15.5. Both used to be available and then the bikes were restricted on a geolocation basis and the software was subject to an OTA update. Shame really as I have a narrow 20mph stretch in a local village and it would be good not to hold traffic up by going along at 16mph.. It's a heavy bike and often laden with shopping/allotment gear and I certainly can't keep up with the lightweight bikes who _can_ do 20mph..

Herzlos

OP mentioned his insurance was new-for-old even for a 3 year old bike, so I think he's trying to argue that if the bike he was sold was legal he'd be getting a new bike. 

I still think he's only really entitled to be put back into the position he started in either before the agreement (no bike, full refund via payroll and adjustments for tax/NI) or the position he was in before it was stolen (with a 3 year old bike). 

CycleClaimant

Herzlos said:

I guess putting you back in the same position would be a new voucher for the £3k for you to go and purchase another bike.

While I would be open to a new voucher, a court is highly unlikely to order such a complex remedy. The standard and most appropriate remedy for a breach of contract claim like this is a monetary award for the damages suffered, which is what I have claimed for.

The kettle argument doesn't hold up; giving you the £50 back puts you back into the position you were immediately before you bought the kettle, regardless of what the kettle costs. 

You've misunderstood the analogy. The point is that my loss wouldn't just be the £50 cash; it would also be the loss of the single-use 50% off voucher that was consumed in the transaction. To make me whole, I would need to be put in a position to acquire the £100 item I was promised. The tax saving was my "voucher" in this scenario.