Unfair Parking Contracts

Many NHS and similar public authority car parks are now run by commercial parking companies. However, the terms and conditions of their parking and subsequent enforcement of them is, in my opinion, unfair and unenforceable.

Take, for example, the terms and conditions governing the pay-and-display parking at my local hospital, Queen Alexandra Hospital. These are displayed near the pay-and-display ticket machines (see picture above), or at regularly spaced intervals up lampposts in the pay-and-display parking areas (see picture right).

It is not obvious with whom a visitor to the hospital is contracting for car parking services. The display next to the ticket machine mentions 3 parties: Carillion, Portsmouth Hospitals NHS Trust and, right at the bottom with the least prominence, Parkshield. Parkshield also give themselves the official sounding trading name of PCP Parking Enforcement Agency, but do not be fooled. There is nothing official about this “Enforcement Agency”; it has no statutory powers of enforcement. It is merely Parkshield Collection Limited, a private limited company formed on 12 December 2011, being a service provider at the end of a contractual chain with Portsmouth Hospitals NHS Trust or the landowner of the parking spaces.

Parking without a parking ticket in Queen Alexandra Hospital is not an offence under the Road Traffic Regulation Act 1984 or Traffic Management Act 2004. The Civil Enforcement of Parking Contraventions (England) General Regulations 2007 do not apply. However, Parkshield and many other private operators dress themselves up as being official. They will often use the same terminology as under these Acts and their regulations, particularly in the use of terms such as “penalty charge notice” and regarding an appeals process and their enforcement powers.

The Parkshield terms and conditions themselves are not exactly well written. It would be difficult to state that these were “expressed in plain, intelligible language”, but to the extent that this means there is any doubt, the interpretation most favourable to the visitor must prevail (see reg 7 of the Unfair Terms in Consumer Contracts Regulations 1999). The terms and conditions appear to be made up of the following:

• an obligation to pay and display a ticket purchased at the machine, at the scale of charges shown
• an obligation to pay £60.00 within 14 days if any of a set of terms and conditions are breached. These are listed under the heading “TERMS”:
  1. Failure to obtain/purchase & display face up a valid ticket for the correct period/tariff.
  2. No parking in excess of the time period paid for.
  3. No parking on hatched lines, in roadway or in reserved or permit only spaces.
  4. No parking in disabled parking spaces without displaying a current disabled badge.
  5. Failure to park within a lined bay.
  6. No staff parking.
• an obligation to pay a ‘standard charge’ of £100.00 reduced to £60.00 if payment is received within 14 days from date of issue, with additional unspecified card processing fees

I am particularly interested in the obligation to pay £100.00 (or the discounted £60.00). I believe that this obligation is either a straight forward penalty, and thus enforceable under English contract law, or is an unfair term under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs), and so not binding.

Penalty

It is settled law that a penalty is unenforceable under English contract law. So what is a penalty? If a provision is intended to deter a party from breaking a contract and is not a genuine attempt to provide compensation to the innocent party for breach, then it is more likely to be considered to be a penalty, following the most recent case law on penalties (Murray v Leisureplay PLC [2005] EWCA Civ 963). It is clear from Parkshield’s terms and conditions that the parking charge of £60 or the standard charge of £100 only applies if there is a breach (“contravening the terms and conditions stated”).

Imagine that you bought a parking ticket at the QA, but that it slipped off the dashboard, or that you were 5 minutes late getting back to your car. Would £60 (or £100, if you held out on receiving a penalty charge notice) be appropriate compensation for Parkshield where there had been no loss other than possible cost of issuing a penalty charge notice (ticket not displayed, but available for proof of payment) or £5.20 (maximum difference in time bands in scale of charges)? I would argue that that it would be excessive, and therefore a penalty.

Unfair Term

Even if Parkshield were able to claim that their charge of £60 or £100 was not a penalty, would the term be unfair under UTCCRs? Clearly no visitor can negotiate the terms of their parking; this is a take it or leave it deal. The visitor, or consumer, is therefore being required to agree to a “contractual term which has not been negotiated” which is certainly “to the detriment of the consumer” (reg 5(1) of the UTCCRs). As to whether this term would be unfair, perhaps the indicative and non-exhaustive list of terms which may be regarded as unfair at Schedule 2 to the UTCCRs can assist? “Terms which have the object or effect of- … (e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation;” – gotcha. Under UTCCRs, an unfair term is not binding on the consumer.

Enforcement

I don’t know how Parkshield goes about seeking to enforce its terms and conditions, but if they were to send me a parking charge notice, I’d be inclined to politely refuse their demands until they could show a legal basis for them. In the end, if they got as far as serving a statement of claim (issuing court proceedings), I’d apply for the case to be heard in the Small Claims Court (as way below the £10,000 threshold). In a Small Claims Court neither party is liable for the legal costs of the other, no matter who wins the case. At worst, I’d have to pay the £100 plus Parkshield court fee (about £35).

Note: This is my own take on Parkshield and similar parking companies’ terms and conditions, and is posted here for discussion only and not for anyone to rely upon as legal advice. In particular, I am no expert on Small Claims Courts and whether a defendant’s application to have a small claim transferred to that Court would always be successful.

There is more that could be analysed about this typical scenario. How is it that Parkshield can get registered keeper information from DVLA? Upon what legal basis is a registered keeper deemed to have entered into the contract to pay the excess £60 or £100?