Overstay Your Welcome and Pay the Penalty!

17 August 2015

English Court of Appeal upholds the validity of a £85 parking charge imposed on a member of the public who overstayed his welcome at a retail park in Chelmsford, Essex

In a decision likely to be warmly received by the private security and parking enforcement industry, the English Court of Appeal has recently upheld the validity of a £85 parking charge imposed on a member of the public who overstayed his welcome at a retail park in Chelmsford, Essex. In the run-up to its hearing the case of ParkingEye Ltd v Beavis [2015] EWCA had attracted a good deal of media attention and given the perceived public interest in the outcome, the Consumers’ Association was added as a party to the case.

The facts of the case:

ParkingEye managed the car park at a retail park in Chelmsford under the terms of a management contract with the park’s owners, a large pension fund. About 20 signs were prominently displayed at the car park stating that there was a maximum stay free of charge of two hours and that failure to comply would result in a parking charge of £85.The defendant Mr. Beavis overstayed by just under one hour (which was not in dispute) and was duly issued with a request for payment which was ignored, leading to ParkingEye seeking to recover the charge through the courts.

The legal considerations:

Given the points of principle involved which were likely to affect other claims, the claim to enforce the £85 charge was assigned to a civil judge for the county rather than the usual small claims process in the county court and after Mr Beavis lost at first instance, the case found its way to the Court of Appeal.

The Court was required to address two essential questions; firstly, was the charge a penalty and therefore unenforceable at common law and; secondly, was the charge unfair and therefore unenforceable under the Unfair Terms in Consumer Contracts Regulations 1999. The traditional view of contractual charges which seek to impose a penalty which is not linked to the level of loss or damage suffered as a result of the breach is that such charges are a penalty designed to act as a deterrent and are therefore void and unenforceable. However in this case the Court of Appeal held that the sum of £85 was not “extravagant or unconscionable” and that the underlying contract between ParkingEye and Mr Beavis was enforceable.

On the second question the Court held that the charge was not unfair in terms of the 1999 Regulations as it did not offend the requirement of good faith nor did it cause a “significant imbalance” between the parties, to the detriment of the motorist/consumer.

Accordingly, the fact that the overstay charge might act as a deterrent and does penalise transgressors will not on its own render it an illegal and unenforceable penalty and provided such charges are not “extravagant or unconscionable” they will be enforced by the courts. Similar management contracts to that entered into by ParkingEye in this case are used by local councils and private car park operators throughout the UK and this decision will no doubt be warmly welcomed by them.

Graham Pierce is a Commercial Property partner at Worthingtons.Tel:028 9043 4015; Email:Graham@worthingtonslaw.co.uk or visit www.worthingtonslaw.co.uk


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