Biggart Baillie Solicitors

Clash between congestion charges and convention costs public purse millions

Wednesday, July 20, 2011

by Jennifer Jack and Carron Rand

It has been reported this week that Barack Obama’s presidential motorcade has been fined £120 in respect of unpaid congestion charges. The original congestion charge was incurred, on this particular occasion, during President Obama’s state visit to the capital in May, and cost £10. Other vehicles should have also been subject to such congestion charges but the closeness of the slow-moving vehicles prevented the congestion charge cameras from identifying and recording their number plates.

Whilst this may appear to be a trivial news snippet, there is, in fact, a serious argument underlying the story. This is the latest fine in a long list accrued by the US Embassy since the introduction of congestion charges in 2003, all of which remain unpaid. It is believed that the total sum due by the US Embassy is in excess of £5 million and America is not the only country to have such outstanding debts. It has been reported that diplomats from Russia, Japan, Germany, Nigeria, India, Sudan, Ghana, Poland and Spain have also refused to pay congestion charges whilst in London and have similarly high outstanding sums to settle. At a time when the public purse is under such immense pressure it seems difficult to believe that this level of debt can be allowed to remain unpaid.

The American Embassy have relied on the 1960 Vienna Convention on Diplomatic Relations as justification for the refusal to pay congestion charges, on the basis that it "prohibits the imposition of this sort of tax on diplomatic missions". Article 34 of the Convention provides that “[a] diplomatic agent shall be exempt from all dues and taxes, personal or real, national, regional or municipal” followed by a list of exceptions from (a) to (f).

It has, however, been argued by a spokesman for Boris Johnson, who has repeatedly called for the outstanding debt to be settled, that the Convention does not apply. The Government and Transport for London are in agreement that the congestion charge is a service charge and not a tax, as such; the diplomats are not exempt from payment.

Mr Johnson suggested in May of this year that the matter should be settled in Court. Whether the public purse would be in a better position following the outcome of such a hearing, taking into account the inevitable expense incurred, remains unclear. Similarly, the impact that any such court case and its outcome would have on relations between diplomats is also uncertain. If a clear position is what is sought, however, it is difficult to envisage another way of resolving the issue, unless, of course, the diplomats can find a solution diplomatically.

If you require further information on the issues raised by this article, please contact Jennifer Jack, Partner, jennifer.jack@biggartbaillie.co.uk or Carron Rand, Solicitor, crand@biggartbaillie.co.uk.