A summary of the Supreme Court decision in ParkingEye Limited (Respondent) v Beavis (Appellant) [2015] UKSC 67.

Background

Mr Beavis received a Parking Charge Notice (“PCN”) for £85.00 when he overstayed a two hour stipulated period in a car park in Chelmsford. He failed to pay the charge and ParkingEye Limited, the car park operator, litigated against him for this. Mr Beavis was unsuccessful in his defence at first instance, at the Court of Appeal and now also at the Supreme Court.

The Supreme Court

The arguments Mr Beavis ran at the Supreme Court were that:

  1. The £85.00 was a penalty clause and therefore was unenforceable in contract law.
  2. The term imposing the £85.00 was unfair under The Unfair Terms in Consumer Contracts Regulations 1999.

Judgment

The court agreed with the findings of the lower courts and upheld the clause. Mr Beavis was ordered to pay the amount claimed.

In entering judgment, the court decided that the clause was not a penalty clause, rather was a necessity in the circumstances in order to ensure that the car park was utilised in a proper manner, and to ensure that the commercial benefits to ParkingEye were not infringed by users. Of key importance, was that the £85.00 was not extravagant or unconscionable. If it had been, the intimation is that the clause would not have been upheld.

Legitimate Interest of the Innocent Party

On first reading, this decision would appear to open the door for car park operators to charge what they want, subject to being able to offer commercial justifications for the sum. This is, however, unlikely to be the case. Whilst the concepts of deterrence and a genuine pre-estimate of loss, so often quoted in disputes of this nature to date, are no longer applicable, a clause must still be a proper reflection of a legitimate interest of the innocent party as far as enforcement of the contractual terms is concerned. Equally, an amount must not be extravagant or unconscionable. If it is, then the clause will fail.

So what?

There can be no questioning of what the court has done in clarifying this area of law. But how far can that be taken? Can a car park operator now levy whatever fee they want? Ultimately no – any figure must remain reasonable. In any event, we can expect consumers to argue that different circumstances mean different rules. At the moment, it is not clear how much momentum such arguments will gather.

The point remains far from straightforward. No doubt consumers will continue to raise contentions with each matter. No doubt operators will eventually attempt to levy greater charges. But what it will inevitably come down to is can the amount be justified.

This saga is far from over. Beavis may be done (subject to an appeal to the European Court of Justice which is unlikely), but more will come to take his place.

About the author

Matthew Goodwin Associate - Solicitor-Advocate

Matthew regularly acts for corporates and individuals, dealing with a variety of disputes relating to investments, negligent tax planning, tax avoidance schemes, pensions and HMRC enquiries and negotiations. In addition, Matthew advises financial institutions and FCA regulated firms on their regulatory obligations.