QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| EVENTECH LTD
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THE PARKING ADJUDICATOR
LONDON BOROUGH OF CAMDEN
TRANSPORT FOR LONDON
Mr Martin Chamberlain and Ms Sarah Love (instructed by Transport for London) for the Second Interested Party
Hearing dates: 19, 20 and 21 June 2012
Crown Copyright ©
Mr Justice Burton :
"No person shall cause a vehicle to be in a bus lane in any length of road specified in an item in Column (2) of the table in the schedule to this order during the time specified in that item in Column (3) of that item unless that vehicle was proceeding in the direction specified in Column (4) of that item and is of a type specified in Column (5) of that item."
The Schedule to the Camden Order specifies that the Southampton Row bus lane is available to a vehicle that is a bus, a Dial-a-Ride bus, a pedal cycle or a "taxi". Article 2 of the Order specifies that the word taxi has the meaning given in the Traffic Signs Regulations and General Directions 2002 ("the 2002 Regulations").
"A vehicle licensed under –
(i) s37 of the Town Police Clauses Act 1847; or
(ii) Section 6 of the Metropolitan Public Carriage Act 1869 ["the 1869 Act"]; or under any similar enactment. "
i) As set out in paragraph 9 above, only black cabs can 'ply for hire' without pre-booking.
ii) Black cabs are subject to "compellability", dating from the London Hackney Carriage Acts 1831 and 1853, which requires that where a black cab at a rank or in the street accepts a passenger, the taxi must take the passenger anywhere that he wishes to go, within a prescribed distance or up to a prescribed journey time. There is no such 'cab rank' obligation on a minicab.
iii) Black cabs are instantly recognised by reason of their shape and size and the illuminated TAXI sign. This is because they must comply with the Conditions of Fitness ("CoF"), which contain a number of standards (including the requirement for the illuminated sign). Currently only two vehicle makes comply with the CoF. Minicabs can be of any colour and any design: there are some 700 different makes and models of vehicles presently licensed.
iv) The fares of black cabs are strictly regulated and can only be charged by reference to a taxi meter. Minicabs are free to charge their own fares and are not metered. According to Mr Griffin, the founder and chairman of Addison Lee, Addison Lee's fares are on average 35% cheaper than black cabs: the fare to be paid is quoted when the minicab is booked, irrespective of the duration of the journey, while black cab fares will of course vary depending upon the length of time that the journey takes.
v) Black cabs are required to be adapted for wheelchair access. There are no accessibility requirements for minicabs.
vi) Before being licensed, black cab drivers must undertake the "Knowledge of London" examination process, which can take two to four years to prepare for ("the Knowledge"). Minicab drivers must before licensing undertake a topographical test, which generally takes a day. Addison Lee voluntarily imposes more extensive training on their drivers, by a short attendance at their driver training school. Black cab drivers must pass the Driving Standards Agency Advanced Driving Assessment: there is no similar requirement for minicab drivers.
The Claimant's Case
i) by reliance upon Article 56 TFEU, which provides:"Within the framework of the provisions set out below, restrictions on freedom to provide services within the Union shall be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended."and/or
ii) by reliance upon Article 49 TFEU:"Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited …Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings … under the conditions laid down for its own nationals by the law of the country where such establishment is effected."
iii) if necessary – if for example Article 56 does not apply (see paragraphs 25 to 28 below) –by reference to the European law principle of Equal Treatment, whereby, in areas otherwise within the scope of EU law, comparable situations must not be treated differently and different situations must not be treated in the same way, unless such treatment is objectively justified.
In each such case, if it applies, TfL can, the onus being upon it, justify the restriction upon grounds permitted by European law (primarily upon grounds other than economic) taking into account considerations of proportionality.
iv) if necessary, on the basis that the restriction is not Wednesbury reasonable at common law – obviously here the Claimant carries the burden of rebutting justification, in the sense that it must show that no reasonable body could have regarded the justification as sufficient.
v) finally, by reference to Article 107 TFEU which provides:"1. Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or production of certain goods shall, insofar as it affects trade between Member States, be incompatible with the internal market."It is common ground that the disadvantage to the Claimant of not driving in the bus lane is capable of amounting to an economic advantage to its competitor, granted through State resources and/or imputable to the State. The Claimant will need to show that the measure is liable to distort competition and affect trade between Member States, and that it is favouring certain undertakings in a way that is not justifiable by the nature or the general scheme of the Bus Lane Policy imposed by the Regulations (known as the "Selectivity requirement"). If State Aid is established, then it can only be justified and rendered lawful by notification to, and approval by, the European Commission.
Article 56: The Issues
i) does not have to be discriminatory on grounds of nationality.
ii) applies to restrictions on the provision of services by a national of the home State to nationals of another Member State, as well as to restrictions on the receipt of services by the latter.
iii) can be complained of by an undertaking against the Member State in which it is established.
i) TfL submits that the alleged restriction must not be (and is here) too "uncertain and indirect", a phrase drawn from paragraph 72 of the judgment of the European Court in European Commission v Spain  ECR I-5267, where a link was held to be insufficient between provisions for the cost of hospital treatment in Spain and tourism. This issue – effectively one of remoteness – did not, however, as the Claimant points out, stand in the way of success for Mrs Carpenter in the case cited above, where the European Court concluded that removal by the UK of an overstaying Philippine national married to a UK businessman was a restriction upon his business of supplying advertisements (inter alia) to purchasers in other Member States, because it deprived him of child care. Ms Demetriou submits that here there is a much closer link, on the evidence put forward by the Claimant, between the exclusion of the Claimant from bus lanes and the attractiveness of the Claimant's services to European customers.
ii) Mr Chamberlain, for TfL, points to the words used by the Court in Ciola at paragraph 11 ("the freedom for recipients of services to go to another Member State in order to receive a service there, without being obstructed by restrictions") and in Regione Sardegna  2 CMLR 8 (159) at para 25 ("the freedom of the persons for whom the services are intended, including tourists, to go to another Member State, where the provider is, in order to enjoy the services there"). He submits that the potential customers from Europe do not come to England in order to enjoy or receive the services of a minicab driver. They come to London, and may or may not use the taxis/minicabs while they are here.
iii) The issue is really joined on the definition of "restriction" (an issue which arises with regard to both Article 56 and Article 49). Mr Chamberlain relies upon those words in Ciola ("without being obstructed by restrictions") and on the words of the Court in HM Customs and Excise v Schindler  ECR I-1039 at para 43 ("legislation … liable to prohibit or otherwise impede the activities of a provider of services") and in Gourmet at para 39 referring to "a measure [which] had a particular effect on the cross-border supply of advertising space". Ms Demetriou however submits that these are words simply catering to the particular measures in issue in those cases, and she relies on the much broader formulation of the Court in Kraus at para 32 ("the Kraus rubric"), which has been regularly cited and followed, relating to a measure which "even though it is applicable without discrimination on grounds of nationality, is liable to hamper or to render less attractive the exercise by Community nationals … of fundamental freedoms guaranteed by the Treaty": in the finding of the Court in Commission v Italy  ECR I-3491 (in paragraphs 60-70) both formulations are expressed, the Kraus rubric but also (at 64) the statement that "the concept of restriction covers measures … which affect access to the market for undertakings from other Member States and thereby hinder intra-Community trade":Mr Chamberlain submits that, if it be right that the provisions of Article 56 are engaged, in the light of the evidence of Mr Griffin, then (and I cite his skeleton):"35. … Article 56 would (presumably) apply to any domestic regulation that impacts on any company, provided that some of its customers are nationals of other Member States who happen to be visiting the UK.36. This is not the law."He refers to the passage in Barnard: The Substantive Law of the EU: The Four Freedoms (3rd Ed) at 357-361 where she sets out what Mr Chamberlain describes as the "three categories of situation" in which Article 56 may apply, and submits that this case falls within none of those categories. Ms Demetriou submits that the categories are not intended to be exhaustive.
Article 49: The Issues
i) none of the three were put off. It should be added that all of them started to be minicab drivers after some years in the UK: the driver from Bulgaria may have started before the Bus Lane Policy was introduced (see paragraph 13 above).
ii) on the basis of the Claimant's own evidence, 15% of those attending its training sessions in order to become new minicab drivers derive from other Member States (i.e. considerably over the present 9% figure).
i) This is not pleaded, and hence not evidenced, and no evidence has been adduced on behalf of TfL to counter such a suggestion, as it plainly would have been.
ii) The need to take the Knowledge to become a black cab driver does not make it more difficult, or less attractive, to be a minicab driver.
i) as Barnard makes clear, at 301, Article 49 does not only refer to access to self-employment, but also to the exercise of the occupation or profession, and, at 302, she refers to Konstantinidis v Stadt Altensteig  ECR I-1191, where a Greek national, working in Germany as a self-employed masseur, was required to enter his name on the Register with an incorrect transcription of his Greek name into Roman characters, which (at paragraph 15) "causes a Greek national such a degree of inconvenience as in fact to interfere with his freedom to exercise the right of establishment": although, in that case, it would appear that there was a considerable element of indirect discrimination on the grounds of nationality (see paragraphs 12-13 of the judgment).
ii) Ms Demetriou submits that the emphasis in the decided cases referred to above on limitations on access or deterrence has been because that was the context of the facts upon which the court was deciding the case. Hence, in Commission v Spain, the case to which Mr Chamberlain referred in his skeleton, whereas the impugned measure was found to be one which did "affect access to the market … and thereby hinder intra-Community trade" (para 64), the Court nevertheless reached the conclusion that:"70. Consequently, the contested legislation, taken as a whole, has the affect of hindering or rendering less attractive the exercise by economic operators from other Member States of their activities on the territory of … Catalonia, through a permanent establishment and thus affecting their establishment in the Spanish market."
"Within the diverse contexts in which the principle of equality may be called in question, there will no doubt always be a range of options factually open to the decision-maker. It is not the court's task to decide what it would have done had it been the decision-maker … In the nature of things it is highly unlikely that only one of the choices available to him will pass the test of objective justification: and the Court has no business to give effect to any preference for one possible measure over another when both lie within proper legal limits. In this sense, it may be said that the decision-maker indeed enjoys a margin of appreciation."
"They must be applied in a non-discriminatory manner;
they must be justified by imperative requirements in the general interest;
they must be suitable for securing the attainment of the objective which they pursue;
and they must not go beyond what is necessary in order to attain it." [The last condition effectively enshrining the principle of proportionality.]
"30. … The concept of 'public policy' in the Community context, particularly as justification for a derogation from the fundamental principle of the freedom to provide services, must be interpreted strictly, so that its scope cannot be determined unilaterally by each member state without any control by the Community institutions … Thus, public policy may be relied on only if there is a genuine and sufficiently serious threat to a fundamental interest of society …
31. The fact remains, however, that the specific circumstances which may justify recourse to the concept of public policy may vary from one country to another and from one era to another. The competent national authorities must therefore be allowed a margin of discretion within the limits imposed by the treaty."
"32. However, in my judgment, the obligation imposed by the first sentence of art 3(2) confers freedom on the member states to choose the method by which they will comply with their obligations under the 2006 directive. It follows under Community law that the court must allow the Secretary of State a large measure of discretion in choosing an appropriate method. In reviewing the legality of the exercise of such discretion, the court must limit itself to examining whether the decision of the Secretary of State discloses a manifest error or constitutes the misuse of powers or there has been a clear disregard of the limits of his discretion. This is because under community law, where the decision maker in the member state is required to evaluate a complex economic situation – and the same would apply to a complex technical situation as here – the intensity of the review is low. The decision-maker will enjoy a large measure of discretion and the court will limit itself to asking [whether] the assessment is manifestly unreasonable. The court will not substitute its judgment for that of the decision-maker.
48. In any assessment of proportionality in a technical field, the court must allow a proper margin of discretion to the decision-maker, because of the complexity of the assessment he is called upon to make in this field."
i) Commission v Italy  ECR I-519 ("Italian Trailers"), where the issue related to provisions with regard to pulling of trailers by certain vehicles including motorcycles:"66. In the present case, the Italian Republic contends … that the circulation of a combination composed of a motorcycle and a trailer is a danger to road safety. Whilst it is true that it is for a Member State which invokes an imperative requirement as justification for the hindrance to the free movement of goods to demonstrate that its rules are appropriate and necessary to attain the legitimate objective being pursued, that burden of proof cannot be so extensive as to require the Member State to prove, positively, that no other conceivable measure could enable that objective to be attained under the same conditions.67. Although it is possible, in the present case, to envisage that measures other than the prohibition laid down in … the Highway Code could guarantee a certain level of road safety … the fact remains that Member States cannot be denied the possibility of attaining an objective such as road safety by the introduction of general and simple rules which will be easily understood and applied by drivers and easily managed and supervised by the competent authorities."
ii) In Commission v Spain, referred to in paragraphs 35 and 36(ii) above, the Court stated, at paragraph 75, that:"It should be recalled that, although it is for the Member State relying on an overriding reason in the public interest as justification for a restriction on freedom of movement to demonstrate that its legislation is appropriate and necessary to attain the legitimate objective pursued, that burden of proof cannot be so extensive as to require the Member State to prove, positively, that no other conceivable measure could enable that objective to be attained under the same conditions."
i) Congestion. The 5.8 million bus passengers every weekday amount to 2.3 billion a year: according to a 2011 study, the majority of visitors to London town centres on shopping trips use the bus. TfL seeks to balance the needs of all the different road users, and so far as bus passengers are concerned they measure, and seek to reduce, "Excess Wait Time". Mr Plowden states as follows in his first witness statement:"41. TfL locates bus lanes where congestion would otherwise increase bus journey times and/or reduce reliability. This applies both to the overall decision where to concentrate bus lanes (in central and inner London, where congestion is most acute) and to the decision where to locate individual lanes (e.g. at particular junctions).42. Bus lanes are also particularly useful because they offer protection to vulnerable road users, i.e. cyclists and motorcyclists … These categories of user are permitted to use the bus lanes during the hours of operation of the restrictions, offering them protected road space during the busiest and most congested times of the day.43. Finally, bus lanes are widely supported in London. TfL's customer research report on bus priority from 2009, 'Attitudes to Bus Priority Schemes' … indicated that 83% of the public support bus priority schemes."There is then an exception whereby black cabs are permitted to use the bus lanes, the rationale being explained in the TfL Public Carriage Office Taxis and Bus Lanes Policy Guidance:"2. The Mayor has stated that TfL's general policy should be to allow taxis in all bus lanes except where specific safety or bus operational issues made this impractical.3. This policy applies for the purposes of taxis driving in bus lanes as through-routes and entering bus lanes to pick up and set down. 'Pick up' and 'set down' mean that there is an intended passenger waiting at the kerbside or that an existing passenger wishes to be set down."The 2009 survey of taxi cabs referred to in paragraphs 9 and 13 above records that 52% of journeys are picked up by being hailed in the street, 34% picked up from ranks and 8% are pre-booked.According to the SKM Report, travel time increases for bus passengers during the morning peak hour (8.00-9.00 am) by a total of 266 person hours as a result of allowing taxis in the bus lanes, but by 431 person hours if minicabs are also included. The Report then uses a method conventional in transport planning, to attribute monetised values to journey times, and to calculate, by reference to estimated busloads and a standard calculation of loss per bus passenger per hour of £9.92, a lost benefit (disadvantage) to passengers of £671,000 in the Congestion Charging Zone and Inner Ring Road areas resulting from the use of bus lanes by black cabs, but a substantially increased loss of £1,140,000 if black cabs and minicabs are so permitted. Quite apart from these statistics, TfL submit that it is obvious that the disadvantage to bus passengers if both black cabs and minicabs are allowed in the bus lanes (73,000 additional vehicles) will amount to a "markedly greater disbenefit to bus passengers" than that caused by 23,000 black cabs alone. In any event, the SKM figures are, as Mr Plowden points out, average figures, and delays will be greater in some locations, certainly those most congested.
ii) The distinction between black cabs and minicabs. TfL emphasised the real difference between them. Black cabs alone can be hailed for pick-up on the streets. Thus there is the need for them to be more easily visible, in the lane nearest the pavement, and for there to be ease of access from the pavement when they are flagged down. Minicabs are not permitted to be hailed off the street. This, TfL submit, is not simply a question of safety of access, but of having the would-be passengers on the pavement and the taxis adjacent to pavements. TfL's policy documents make clear that the disabled are a priority for TfL, not just in relation to the fact that the black cabs are (while the minicabs are not) required to be adjusted for wheelchairs, but also in respect of accessibility from the pavement to a cruising black cab. TfL submits that, whereas there is thus a specific distinction to be made between black cabs and minicabs, if minicabs were allowed into bus lanes, there would then be no apparent or justifiable distinction between minicabs and other vehicles – chauffeured cars (in which the Claimant also deals), hire cars, Car Club vehicles, delivery vehicles, heavy goods vehicles and all private cars.
iii) Enforcement. TfL relies on the difficulty of enforcement if the less identifiable minicabs are allowed in the bus lanes. Whereas there are some identifying factors on a minicab sufficient for the police or cameras to pick them up, there is always the risk that other drivers will not be able to identify a minicab in a bus lane, and will assume that it is a private vehicle and – for example in areas where bus lanes have variable hours and not always sufficient notices identifying the hours – that the bus lane does not apply and they are free to follow the minicab into the bus lane.
iv) Compellability and maximum fares. TfL points out that black cabs, unlike minicabs, are subject to compellability (explained in paragraph 12(ii) above) and are limited by maximum fares. Minicabs do not have that disadvantage. Although they have fixed fares rather than metered fares, they can estimate those fares so as to make allowance for anticipated delays through congestion.
v) Environment. There was I think a misunderstanding about this. The reliance by TfL upon the environment was, it made clear, by reference to the existence and desirability of bus lanes themselves rather than to any suggestion, by reference to emissions or otherwise, that black cabs were in some way more favourable to the environment than minicabs.
i) Congestion. As set out in paragraph 15 above, little or no time was spent orally on any critique of the SKM Report. Rather Ms Demetriou's case was that the SKM figures do not show that there is any material addition by way of delay or expense to bus passengers by adding the 50,000 extra PHVs to the bus lanes. The increase in disadvantage to bus passengers is in percentage terms not much higher than 2% and on some calculations less than 1%. The Claimant submits that there should have been more persuasive statistics, whose absence was recognised in Familiapress v Heinrich Bauer Verlag  ECR I-3689, although I refer to what I have said in paragraph 48 above and to Italian Trailers there referred to.
ii) Competition. The Claimant relies on the competition between minicabs and those (8% or so) black cabs who also pre-book.
iii) Disability. The Claimant points out that according to a 2002 report (Attitudes of Disabled People to Public Transport), 79% of wheelchair users "plan their journey in advance", which Mr Griffin interprets as pre-booking either a minicab or a black cab. He states that the number of wheelchair users seeking to hail a cab from a road which has a bus lane is likely to be very low, and comments accordingly that the relevance of the issue of disability for TfL's Bus Lane Policy is "vanishingly small".
iv) Distinction between black cabs and minicabs. Ms Demetriou, in her skeleton argument in paragraph 89, states as follows:"It is important to note, at the outset, that the Claimant does not in any way challenge TfL's claims as to the importance of buses generally, and bus lanes specifically, to London's transport system. The improvement in journey time for bus passengers is the reason why bus lanes are there in the first place, and the reason why certain classes of vehicles are excluded from those lanes during certain hours of the day. The proposition that allowing more vehicles into bus lanes will to some extent slow down the traffic in those lanes (at least at certain times of the day) is an obvious one. What is far from obvious is why that proposition should justify an arbitrary selection of permitted vehicles by TfL, with the effect of causing blatant (and undisputed) discrimination between the two categories of transport operators that are (again it is not disputed) in direct competition."
v) Enforcement. Mr Griffin points out that, in addition to the rear sticker, which must be fixed on the outside of the glass on the bottom right-hand side of the rear windscreen, minicabs also have a sticker on the outside of the glass on the right-hand side of the front windscreen, and that this enables minicabs to be clearly distinguishable from private cars, certainly on police or traffic enforcement photographs.
vi) Compellability and maximum fares. Ms Demetriou points out that there is no evidence as to the burden caused to taxicabs by these obligations, nor any reason why providing black cabs with access to bus lanes is a necessary and proportionate response to any such burden.
i) If it is considered vital not to prejudice bus lanes, then that policy could lead to neither black cabs nor minicabs being permitted into the bus lanes, and thus the competitive advantage of those black cabs who are pre-booked would be eliminated.
ii) Black cabs could be permitted to enter bus lanes on the same basis as minicabs, i.e. to pick up and set down only.
iii) Bus lanes could be reserved for buses only during peak travel hours, permitting both black cabs and minicabs to use the bus lane at other times.
iv) Black cabs and minicabs could use bus lanes only when carrying passengers.
i) This would not have the public benefit of visibility of and access to black cabs, which is not necessary for minicabs.
ii) This suggestion, like the first, does not address the need for visibility of, and access to, cruising taxis.
iii) TfL responds that bus lanes are intended only to be operational during the hours when affording priority to buses is considered necessary.
iv) This suggestion is actually the reverse of the real purpose of allowing black cabs in the bus lanes, i.e. that the benefit for the public, and the advantage to their safety, is to have empty cabs, i.e. cabs for hire, in the bus lanes, and the suggestion would again not meet the visibility and access requirements referred to above.
Conclusions with regard to Articles 49, 56 and Equal Treatment
i) There is to my mind a clear distinction between the need of black cabs (and their passengers and the public) for them to be in the bus lanes, by way of visibility and availability of, and access to, black cabs for those hailing a cruising taxi. I do not reach this conclusion simply or mainly by reference to the disabled – though there are many people who are disabled, but are not in wheelchairs, and, even on the identification of disabled with wheelchair users and accepting Mr Griffin's premise set out in paragraph 51(iii) above, there would still be 21% of wheelchair users who may not pre-book. I am certainly not persuaded that the problem for the disabled of hailing a taxi which is not in a lane adjacent to the pavement is "vanishingly small". In any event, from the point of view of the public generally, I consider it makes entire good sense for black cabs to be travelling in bus lanes. Minicabs just do not have the need to use the bus lane, and black cabs do.
ii) The fact that 8% of black cab journeys are pre-booked and therefore in competition with minicabs does not seem to me to affect that conclusion. It would clearly not be possible to legislate that those black cabs could not use the bus lane when carrying a pre-booked passenger.
iii) It seems to me entirely clear that there is an objectively justifiable ground for distinction between black cabs and minicabs in relation to the use of the bus lane. If however the exception were to be extended to include minicabs, which do not have that same justification, then I cannot see any further stopping point, any further rational distinction between them and the other vehicles progressively listed in paragraph 50(ii) above. It would be the 'thin end of the wedge', but one of some importance because it would immediately jeopardise the priority for buses in the bus lanes.
i) I am content to adopt the same test as if I were addressing a restriction on freedom of movement, though I do not conclude that there is a difference between that and the test applicable in consideration of the general principle of equal treatment in EU Law (see paragraphs 40 to 48 above).
ii) I do not consider that there is either a question of public policy or a complex economic or technical question. The reasoning for the Bus Lane Policy, including its exception, is obvious and compelling.
State Aid/Article 107: The Issues
i) It confers an economic advantage.
ii) It must be granted by a Member State or through state resources.
iii) It must distort or threaten to distort competition by favouring certain undertakings.
iv) It must affect trade between Member States.
The live issues have revolved around (iii) and (iv).
"… the Court would point out that, as it has consistently held, in order that an agreement between undertakings may affect trade between Member States it must be possible to foresee with a sufficient degree of probability on the basis of a set of objective factors of law or fact, that it may have an influence, direct or indirect … between Member States, such as might prejudice the realisation of the aim of a single market in all the Member States."
"[Article 107] requires it to be determined whether, under a particular statutory scheme, a State measure is such as to favour 'certain undertakings or the production of certain goods' in comparison with others which, in the light of the objective pursued by the system in question, are in a comparable legal and factual situation."
"According to the case-law of the Court, a measure which, although conferring an advantage on its recipient, is justified by the nature or general scheme of the system of which it is part does not fulfil that condition of selectivity."
In the event, the tax advantages given to the relevant producers were not held to be justified by the relevant statutory scheme.
Conclusion as to Article 107