A Chorley-based parking company has been awarded £350,000 damages from a supermarket giant following a court ruling.
Buckshaw Village-based ParkingEye Ltd sued Somerfield for terminating a contract to monitor its car parks.
ParkingEye Ltd put in automated systems at 17 Somerfield stores to record vehicle registration numbers and catch out over-stayers.
After culprits’ names and addresses were dug up from the DVLA, they were hit with £75 “penalty tickets”.
ParkingEye was entitled to keep the cash collected so the company “had an incentive to operate the ‘fine’ system aggressively”, top judge, Sir Robin Jacob, told London’s Appeal Court.
He added: “This it did - too much so”.
Increasingly tough letters, bearing police-style “chequered edging”, were sent demanding payment from motorists and Sir Robin said one “semi-literate” missive – the third in the cycle and sent out by a debt collection company – contained “serious falsehoods”
That letter threatened motorists with legal action if they failed to pay and a fourth, worded “in the same crude fashion”, warned of the impact of court judgments on individual credit ratings and ended with the words: “This is your last chance.”
When Somerfield Stores Limited found out what was happening, it terminated its contract with ParkingEye in March 2006.
However ParkingEye’s response was to sue the supermarket chain for its lost revenue.
In March last year, a judge rejected Somerfield’s arguments that ParkingEye had been dishonest and intent on operating the contract unlawfully from the outset and awarded the company £350,000 damages.
The judge ruled that ParkingEye had not appreciated the “legally objectionable aspects” of the third letter and that, had they been pointed out, its wording would have been changed. Earlier letters issued directly by ParkingEye, despite being “dressed up” like police-issued documents, did not contain falsehoods or make false representations.
Attacking that decision at the Court of Appeal, Somerfield’s lawyers pointed to the falsehoods in the third letter and claimed ParkingEye had always had the intention of “using illegal means where necessary” to induce motorists to pay. However, ruling against Somerfield, Sir Robin rejected its plea that the whole deal had been “tainted by illegality” and that ParkingEye’s intentions had been “so imbued with moral turpitude” as to make the contract unenforceable.
“Such a conclusion would be unduly sanctimonious”, said the judge at London’s Civil Appeal Court with Lords Justice Laws and Toulson.
The ruling means that Somerfield will now not only have to pay £350,000 to ParkingEye, but also very substantial lawyers’ bills run up in the dispute. ParkingEye was “not in a position to comment”.