On Wednesday 4th November the highest court in the land, the Supreme Court, handed down its verdict in the landmark case of Beavis v Parking Eye. The case had arisen when Barry Beavis was given an £85 parking ticket for overstaying his two-hour parking limit by almost an hour in a car park controlled by Parking Eye.
The Supreme Court had been asked to look at this case after the Court of Appeal had ruled against Mr Beavis in April this year. The case revolved around whether fines charged by parking management companies, such as Parking Eye, are classed as a penalty. If so the penalty would have to bear relation to the likely loss incurred by the parking company as a result of a customer staying over their permitted time limit, otherwise consumer law would be infringed.
The Supreme Court ruled that the fine was not a penalty as the charge authorised the parking company to control access to the car park in the interest of customers and the wider public by making parking spaces available to them, which might otherwise be clogged up by long-stay users. In addition, the Supreme Court said the charge was reasonable to “encourage the prompt turnover of parking spaces and also to fund its own business activities and make a profit”.
Implications of the Judgment for Consumer Contracts and Fines
John de Wall QC, who acted for Mr Beavis, said “Until today, charges which had been agreed in advance, payable on a breach of contract, were disallowed as unlawful penalties unless they could be justified as a genuine pre-estimate of loss. Today’s judgment sweeps away that rule and says the deterrent charges will be allowed if there is some commercial justification for them”.
The press has so far been highly critical of the judgement raising concerns that other providers such as healthcare providers, airlines, hotels, mobile phone companies and nurseries may look to impose similar fines to boost profits.