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Parents Paradise ruling could help fellow indoor-play operators

A Hertfordshire indoor-play operator has become a trailblazer for thousands of British companies that could be owed money by a business rates firm. After winning her own landmark case against CVS, Lyn Presence of Parents Paradise in Bushey believes there will be several more operators owed sums running into thousands of pounds in some cases

After a lengthy and at times intimidating dispute with CVS, Parents Paradise recently won its battle in the small claims court.

CVS had been subject to a three-year investigation by the Daily Telegraph, but claimed it had never been challenged successfully in court prior to the Parents Paradise case. It offers a service to businesses that finds ways to legitimately reduce their business rates, for a fee.

The case with Parents Paradise came about because CVS was accused of misinterpreting (or to put it less charitably, trying to take advantage of) the government’s two-year extension to the official contracted five-year ratings period by demanding that clients pay CVS commission for those additional two years.

Parents Paradise argued was beyond the terms of the original contract. “They had done what they said they would and secured me a £1,000 a year rebate across the five years,” Presence told Indoor Play. “CVS took 50% of that retrospective rebate and I had no problem with that.

“But when I received another invoice, for the 15-16 period, I looked at the original Ts and Cs and they could not have been clearer. I rang Adrian Irving of our local accountancy practice Relatus and asked him whether they could do this.”

Irving was already aware of CVS and also of the opinion that this was not something the company could legally demand. Over the next few months, he assisted Parents Paradise in its interactions with CVS, which says Presence became “more and more intimidating” before ending shortly before the case ended up in court with an attempt by the CEO to intervene. “We are small fry to them obviously – some companies in the same position as us could be owed tens of thousands of pounds,” she said. “But Adrian was convinced we would win and by the way they communicated with me, it was obvious they were very concerned. CVS made it increasingly clear that I stood to lose a lot of money if the case went in its favour, but when Mark Rigby (the CEO) contacted me, I took Adrian’s advice and told him I wasn’t interested in discussing it because principles are more important than money.”

When the case was heard at Milton Keynes small claims court, Deputy District Judge Morley ruled that Parents Paradise had a case and threw out CVS’s counterclaim: “We are looking at what is effectively a five-year period and it is as simple as that,” he said. An award was made against Parents Paradise for refusing to accept a full settlement and insisting on a hearing. “This was a small price to pay in order that we could make our victory public,” said Presence.

The case has caused quite a stir and is thought to have persuaded the Royal Institution of Chartered Surveyors (Rics), to make radical changes to its code of conduct, which aims to uphold stringent standards among British member surveyors. As of April 1, Rics has changed its guidance and published a 25-page document outlining the new rules. In those rules, Rics states that “it is misleading to extend the contract to cover more than one general rating revaluation by including such an extension in the supplementary conditions not appearing on the face of the contract”.

The subject of business rates has been high on the media agenda since the Chancellor announced measures in his Budget that are likely to drive up rates for small businesses across the country. Presence hopes her case shines a light on the issue with CVS and any other business rates firms who may have tried to benefit. “I am right at the bottom of the pile and I suppose we went under the radar. Maybe that’s why we ended up going all the way to court; it wasn’t the intention at the outset and I was surprised that CVS let it go that far,” said Presence.

“I know that things are hard enough in this industry, without having to deal with this type of thing. So if my story can help any other operators out there to reclaim money they should not have paid out, I’ll be delighted.”

Although the figure is denied by CVS, Relatus research, based on proposals data published by the Valuations Office Agency (VOA), has thrown up more than 7,700 additional companies that Irving believes may have paid CVS in error. At the time of writing, one multi-site indoor-play operator had already signed up to be part of the class action Relatus wants to bring against CVS and Presence believes there are more out there. “I don’t have the list and I’m not at liberty to name anyone, but I’m convinced there will be others in this sector,” she said.

“This has received coverage in the national newspapers, but if people haven’t read it, then they probably don’t know it’s happened and CVS will be confident that it can ride it out without any more damage to its reputation.

“I would never have taken it as far as I did if I didn’t have Adrian behind me because it would have seemed a risk. But if someone can get you half of your money back, then you’ll be happy.”

If you feel you have a claim and would like to recover fees from CVS, please contact Adrian Irving at cvs@relatus.co.uk.

April 2017

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