Park to one side
In a matter of great public interest the Court of Appeal has recently decided that private parking charges of at least £85 are not unlawful. The case of ParkingEye –v- Beavis was appealed from a first instance hearing last year and is now the current precedent in respect of whether a parking charge can be considered a ‘penalty’ or not.
Although the matter has only just been decided by the Court of Appeal, Mr Beavis and another defendant, Mr Wardley first had their cases assessed by Circuit Judge Moloney in 2014 as a test case to try and set precedent on the issue of unlawful parking charges. After the introduction of the Protection of Freedoms Act (specifically Schedule 4 – Recovery of Unpaid Parking Fines) the Courts were faced with hundreds of claims from firms such as ParkingEye seeking to enforce the non-payment of parking fines.
ParkingEye would typically bring claims of £170 (including the original charge and legal expenses) against individuals who had refused to pay their parking fine, however contract law would suggest that ParkingEye had no basis for claiming this charge since it could not represent the loss it would have incurred should someone overstay in a car park.
An award of damages for breach of contract is intended to put the claimant back in the position they would have been in had the breach not occurred. The damages would therefore be minimal or nothing in a free car park. The amount of the charge, often between £80 – £100, is clearly intended to be a penalty which would be unenforceable under contract law. This requirement to evidence the likely loss is known as ‘genuine pre-estimate of loss’.
ParkingEye’s legal Counsel advanced the argument of commercial justification rather than genuine pre-estimate of loss; understanding the latter point would be very difficult to show. ParkingEye therefore argued that their higher penalties were needed to deter motorists from over-staying in the car park and there was a genuine commercial justification for doing so. The Court accepted this line of argument and found for ParkingEye, although did allow permission to appeal with a fast-track through to the Court of Appeal.
Mr Beavis commenced the appeal process whereas Mr Wardley decided to settle. Instead of focusing on the issue of ‘commercial justification’ the Court of Appeal heard arguments on the issue of the level of charges applied. The Court of Appeal dismissed the appeal, stating that the charges should not be treated as penalties because the level of charge (£85 in the Beavis case) was not ‘extravagant and unconscionable’; this being the true test of whether a clause is a penalty.
The Court of Appeal assessed other factors in reaching their decision including: the need for readily available car parking spaces, parking fines as a deterrent by nature and undertaking a comparison of the scale of penalties imposed by local authorities. The Court has granted permission to appeal to the Supreme Court.
Partner and Head of Dispute Resolution
Commercial Dispute Resolution
LPatel@LawBlacks.com
0113 227 9316
@LukeLawBlacks
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Luke Patel
