Freedom of establishment - Restriction on freedom to provide service

Eventech Ltd v Parking Adjudicator: Queen's Bench Division, Administrative Court (London) (Mr Justice Burton): 11 July 2012

The claimant company was an associated company of Addison Lee plc (AL), which operated a fleet of private hire vehicles or 'minicabs'. The instant proceedings arose out of two penalty charge notices issued by the London Borough of Camden in October 2010 against the claimant, in respect of the use of one of its minicabs in a bus lane.

Under the policy of Transport for London (TfL) and London boroughs black cabs were permitted to drive in most London bus lanes, whereas minicabs were permitted to drive in none during their hours of operation, except to pick up or set down pre-booked passengers (the policy). The claimant appealed to the defendant Parking Adjudicator challenging the validity of the policy as implemented by the London Borough of Camden. The appeal was dismissed and the claimant applied for judicial review.

It contended that the policy offended against, inter alia: (i) the European Union right of freedom to provide services, as contained in article 56 of the Treaty on the Functioning of the European Union (the Treaty); (ii) freedom of establishment, pursuant to article 49 of the Treaty; (iii) the EU general principle of equal treatment; (iv) article 107 of the treaty by amounting to favourable treatment of black cabs as against minicabs, such as to constitute unlawful state aid. The application would be dismissed.

(1) Article 56 did not apply at all to the provision of minicab/taxi services (see [54] of the judgment). The European Court had held that free movement of services in the transport sector was not governed by article 56, which concerned freedom to provide services in general, but by a specific provision namely article 58(1) (see [26] of the judgment). Yellow Cab Verkehrsbetriebs GmbH v Landeshauptmann von Wien: C-338/09 [2010] All ER (D) 311 (Dec) adopted.

(2) On the evidence, the policy had no relevance at all to freedom of establishment. Of the minicab drivers who had provided statements, none of them had said that they were in any way affected, either in relation to coming to the UK to set up as minicab drivers, or in relation to their wanting to become minicab drivers. Further, the minicab drivers had no limitation upon their licence and no limitation upon their right to charge what fares they wished (see [55] of the judgment).

(3) In the instant case, given that, but for the provisions of article 58, article 56 would have applied, the principal of equal treatment did apply. However, insofar as minicabs and black cabs had been treated differently, their situations were not comparable and, in any event, such treatment was objectively justified. The policy had not involved an arbitrary selection of permitted vehicles.

There was a clear distinction between the need of black cabs to be in the bus lanes, by way of visibility and availability of, and access to, black cabs for those hailing a cruising taxi. It made entirely good sense for black cabs to be travelling in bus lanes. Unlike black cabs, there was no need for minicabs to use the bus lane (see [54], [60], [63] of the judgment). Gebhard v Consiglio dell 'Ordine degli Avvocati e Procuration di Milano: C-55/94 [1996] All ER (EC) 189 adopted.

(4) The court was not satisfied that the policy, even though it might have an impact on competition between minicabs and those black cabs who could be pre-booked, affected trade between member states (see [75] of the judgment). Remia BV v EC Commission: 42/84 [1985] ECR 2545 considered; Adria-Wien Pipeline GmbH v Finanzlandesdirektion für Kärnten: C-143/99 [2002] All ER (EC) 306 considered; Heiser v Finanzamt Innsbruck: C-172/03 [2005] All ER (D) 66 (Mar) considered.

Marie Demetriou QC and Kelyn Bacon (instructed by Maitland Walker LLP) for the claimant; Martin Chamberlain and Sarah Love (instructed by Transport for London) for the second interested party, TfL.