A much reported case was recently decided upon by the highest court, the Supreme Court.
Many papers have reported on the case of the Essex chip shop owner who took action against a parking company for giving him an £85 ticket for overstaying a two hour parking limit by almost an hour.
The case received much publicity because Mr Beavis decided to challenge the unpopular penalty and argued that the £85 charge was an unenforceable penalty and was not a genuine reflection of the parking company's loss for the fact that he had stayed for an extra hour. The Supreme Court decision was much anticipated because if it had gone in Mr Beavis's favour, the headlines stated that it may have saved motorists 'millions of pounds'.
To the surprise of many legal commentators, the Supreme Court found in favour of the parking company. The Court ruled that the charge was not unfair and that penalties for overstaying are a 'normal feature of parking contracts'.
The court was satisfied that the charge was not a penalty. Under contract principles, a penalty has to bear a relation to actual loss incurred. In this case, the parking company suffered no loss at all.
It is fair to say that most consumers will not be faced with penalties for parking - but the case is important because the principle that it established could have wide implications for contract law more generally.
Many legal commentators have observed that the decision gives no indication as to what an 'unreasonable' charge might be. This means that it may no longer be as straightforward to argue in a breach of contract case such fines are penal and therefore unenforceable.
If you are facing a breach of contract claim and have been charged penalties, contact us.
Case: Beavis v ParkingEye Limited
Link to the case: Case