A GROUP of investors who collectively ploughed millions of pounds into an unregulated airport car-parking scheme has launched a crowdfunding campaign in a bid to take legal action against the company behind it.
Lancashire-based Park First launched the investment scheme in 2016, offering investors returns of between 8 per cent and 12% on spaces sold for £20,000 each. Of the 15,000 spaces it had on offer, 6,000 were spread across the Direct Parking, Skyport, Park N’ Fly, Park Fast, SwiftPark and Park Safe car parks next to Glasgow Airport, with the remainder at sites close to Gatwick Airport and Luton Airport.
However, investors have not received any cash from the business for over a year and, with Park First putting the companies that run the car parks into administration last month, they fear their entire investment has been lost. As Park First is not regulated by the Financial Conduct Authority (FCA), neither the Financial Ombudsman Service not the Financial Services Compensation Scheme can get involved.
READ MORE: Deadline looms for investors seeking to exit airport carparking scheme
Having filed an initial mis-selling claim against the company in the High Court in London last year, a 20-strong group of investors is now looking to raise up to £21,000 via the crowdfunding site CrowdJustice in order to pursue the case.
The investors are being represented by Patrick Lawrence of London firm Trainer, Shepherd, Phillips, Melin, Haynes, who said the case has been stayed to allow more claimants to come on board. There are currently 80 investors from Scotland, England and overseas looking to pursue the case, the vast majority of whom were sold spaces in one or more of the Glasgow sites.
On their CrowdJustice page, the investors say that they were “sold parking spaces with the promise of a guaranteed return on our investment over six years”.
“Far from seeing the promised returns, we never saw any return on our investment,” they wrote. “We have now been told that we will not be able to take our money out of the scheme either. Many of us have lost our entire pensions.”
If the investors meet their fundraising target they will restart the stayed proceedings, which claim that Park First both negligently and fraudulently misrepresented the investment it was selling. They are also pursuing the firm for breach of contract and breach of the Financial Services and Markets Act. It is understood that Park First has instructed Eversheds to defend the action.
READ MORE: Airport car park scheme shows the importance of regulation
Noting that as “the numbers are different but the story is the same” for each investor, Mr Lawrence said he will also apply to the court to have the claims managed collectively via a group litigation order. That would allow one claimant’s case to be heard in detail, with any decision made by the court applying to all members of the group.
Park First declined to comment on the legal action, but said more information on its investment scheme and the situation relating to the administration of some of its businesses could be found on its website as well as those of administrators Smith & Williamson and the FCA.
The FCA has been involved with Park First since 2017, when it ordered the company to change the structure of its investment because it is not authorised to operate or promote collective investment schemes.
Up to that point the company had been selling parking spaces on the basis that investors would receive an annual return of eight per cent in the first two years followed by projected returns of 10% in years three and four and 12% in the following two years.
READ MORE: Investors warned to give wide berth to new Glasgow airport car-park scheme
After the FCA’s intervention investors were given the choice of converting their original investment into a so-called lifetime leaseback or cashing in. Those choosing the first option were told they would receive annual returns of 2% plus a dividend-bearing shareholding in Park First while those taking the latter would have seen their original investment reduced by the value of any rental income they had already received and increased by 2% for each year it had been invested.
It is thought that no one received any of the money due to them before the companies went into administration, although the FCA has said that £32 million raised from the sale of Park First’s Luton site must be ringfenced “for the benefit of investors”.
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