On the facts you have provided, the critical point is that the vehicle in question was, and remains, Ultra Low Emission Zone compliant within the meaning of the Greater London Low Emission Zone Charging Order 2006 (as amended) and the subsequent Ultra Low Emission Zone Scheme made under section 295 and Schedule 23 to the Greater London Authority Act 1999. If TfL had no lawful entitlement to levy a penalty because the vehicle was exempt at the time of the alleged contravention, any Penalty Charge Notice purportedly issued in respect of it was a nullity. It follows that any payment made in respect of such a notice, whether voluntary or involuntary, is recoverable on grounds of restitution for unjust enrichment. The fact that your leasing company discharged the penalties without your consent, and without seeking a transfer of liability under the statutory scheme, does not extinguish the underlying unlawfulness.
The statutory framework provides, under paragraph 2 of Schedule 1 to the Road User Charging (Enforcement and Adjudication) (London) Regulations 2001, that where a Penalty Charge Notice is served on the registered keeper but the vehicle was, at the material time, hired or leased under a qualifying agreement, the keeper may transfer liability to the hirer by making formal representations within 28 days, supported by a statement of liability and a copy of the hire agreement. This provision is mirrored in TfL's own procedural guidance. In your case, the lease company failed to avail itself of that statutory mechanism, and instead made payment, thereby extinguishing their right of appeal. However, the absence of an appeal does not legitimise an unlawful demand ab initio. Where money is paid in consequence of an unlawful demand by a public authority, it may be recovered either by the payor or by the party who has suffered the loss, provided a sufficient nexus of authority exists between them.
The cause of action against TfL lies in restitution for money had and received, arising from an ultra vires demand. The cause of action against the lease company, if pursued, would be framed in breach of bailment and/or breach of contract, on the basis that they paid sums for which you were not liable and then sought to recover those sums from you without lawful basis. If the lease agreement contains terms that purport to authorise the lease company to pay and recharge all penalties without discretion, those terms may still be subject to the implied duty to act rationally and in good faith, and not to recover sums arising from an unlawful charge. Both parties could therefore be joined as defendants: TfL as the primary wrongdoer in making the unlawful demand, and the lease company as a secondary wrongdoer in discharging and recharging an unlawful sum to your account.
If you elect to pursue TfL alone, the letter of claim would be addressed solely to them. If you join the leasing company, it would be copied and marked as notice of intended proceedings in which they would be named as a joint defendant.
The form of words for such a letter might be as follows:
[Your address]
[Date]
Transport for London
Road User Charging Correspondence
PO Box 343
Darlington DL1 9QD
Dear Sirs
Re: Unlawful Demand and Payment – Ultra Low Emission Zone Penalty Charge Notice No. [reference]
I write in accordance with the Pre-Action Protocol for Debt Claims and the Practice Direction – Pre-Action Conduct. I am the hirer of vehicle registration mark [VRM] under a lease agreement with [Lease Company]. At all material times, this vehicle met the emissions criteria for exemption from the Ultra Low Emission Zone charge, as confirmed by your own vehicle compliance database.
On [date], you issued a Penalty Charge Notice alleging non-compliance with the ULEZ Scheme. This penalty was paid by my leasing company without my consent and without transferring liability to me under paragraph 2 of Schedule 1 to the Road User Charging (Enforcement and Adjudication) (London) Regulations 2001. You were not entitled in law to issue or enforce the said Penalty Charge Notice, as the vehicle was compliant at all material times.
Your demand for payment was ultra vires and constitutes an unlawful act for which you are strictly liable to make restitution. The sum of £[amount] was paid in consequence of your unlawful demand. I require repayment of that sum within 14 days of the date of this letter.
If the sum is not repaid within that period, I will issue proceedings in the County Court without further notice, claiming restitution for money had and received, interest pursuant to section 69 of the County Courts Act 1984, and my legal costs.
If the leasing company is to be named as a joint defendant:
For the avoidance of doubt, this letter is also copied to [Lease Company] as proposed joint defendant, on the basis that they have wrongfully paid the said unlawful penalties and sought to recharge me for them, contrary to the implied duty to act in good faith and the law of bailment. Should repayment not be forthcoming, proceedings will be issued against both parties, jointly and severally, without further notice.
Yours faithfully
[Name]
The next step is to obtain from TfL a formal written confirmation of the vehicle's compliance status and the date from which the personalised registration was recognised as compliant in their database. That will form the central evidential plank of your claim, as it will demonstrate that no contravention ever occurred. Once that is secured, the claim should be advanced promptly to avoid any limitation or procedural defence.
