The Supreme Court yesterday handed down its Judgment in a case concerning an £85 charge for overstaying a 2-hour parking limit.
Mr Beavis parked his car at the Riverside Retail Park on 15th April 2013. It was clear from notices throughout the carpark that a failure to comply with a 2-hour limit would “result in a Parking Charge of £85”. He overstayed by about an hour and so ParkingEye Ltd – a private parking enforcement company engaged by the owners of the Riverside Retail Park to manage the car park at the site – pursued him for the £85.
Mr Beavis argued that this charge was a penalty and therefore unenforceable in law, so he refused to pay it. He took his case all the way to the Supreme Court and lost at every stage.
The so-called “law against penalties” is a principle of law that regulates the contractual remedy available (in this case to ParkingEye / Riverside Retail Park) for the breach (in this case by Mr Beavis) of a primary contractual obligation (in this case, the obligation to adhere to the 2-hour stay limit). In essence it means that one has to consider what is the highest level of damages that could possibly arise from the failure to adhere to the contractual term and, if the contract requires the contract breaker to suffer a detriment that is extravagantly disproportionate to that level of damages, it will be unenforceable. To put it another way, was a charge of £85 ‘extravagantly disproportionate’ to the loss ParkingEye/Riverside Retail Park suffered as a result of Mr Beavis overstaying the 2-hour limit? Six of the seven Judges in The Supreme Court thought not.
They took the view that ParkingEye and Riverside Retail Park had a legitimate interest in charging overstaying motorists because (1) Riverside Retail Park has an interest in ensuring that retail park provided for efficiently-managed customer parking; and (2) ParkingEye had an interest in securing income from the £85 charge as it went towards meeting the running costs of a legitimate parking enforcement scheme and also to providing them a profit margin. The Judges went on to say that the objective of the £85 charge was to induce car park users not to overstay, and that this deterrent was in the interests of other users of the car park.
So, overstay your parking limit at your peril because unless the parking fines for doing so is significantly more than £85, you’re unlikely to be able successfully to challenge it, even though it will be many times more expensive than (1) the price you paid for the parking ticket in the first place; and (2) the amount ParkingEye and Riverside would have received had you left the space before your time limit ran out and someone else parked there.
For most, this ruling will be as unwelcome as it is unsurprising. It is difficult to avoid forming the view that the Judges were concerned to avoid finding that the £85 charge was unlawful simply because of the far-reaching ramifications such a decision would have had. But there we are; at least there is now clarity on the issue.
Find out more details of the case and full Judgment.