The Message: Parking fines are valid if commercially justifiable and fair.
The Case: A motorist has unsuccessfully challenged a charge of £85 for parking beyond the permitted period (Parkingeye Limited v Barry Beavis (23 April 2015)).
Parkingeye manage the car park at the Riverside Retail Park in Chelmsford. Shoppers are allowed to park free for a maximum of 2 hours. If they overstay, a parking charge of £85 is payable, subject to reduction to £50 if paid within 14 days.
There are some 20 signs at the car park making clear the terms for parking. Nevertheless, on 15 April 2013, Mr Beavis parked his car there for nearly 3 hours. He then refused to pay the parking charge and Parkingeye brought Court proceedings to recover it.
Liability turned upon 2 main issues. Firstly, whether the charge constituted a penalty and was thereby unenforceable? Secondly, whether it was unfair under the Unfair Terms in Consumer Contracts Regulations 1999?
Rather than making a loss when parkers overstayed, Parkingeye make a profit. Their income, in fact, largely depends on some shoppers parking unlawfully.
Parkingeye succeeded at first instance but Mr Beavis appealed. The Consumers Association were added as a party given their concern with the general issue regarding parking fines.
A payment is liable to be invalid as a penalty if it is intended to act as a deterrent and does not reflect any loss suffered due to the breach of contract. But Parkingeye argued that the position re car parking was different to normal commercial contracts and the law should be more flexible than it has been in the past. It should reflect that there were commercial justifications for imposing a fine to deter unlawful parking and that the crucial point is that the amount of the charge is not unfair nor unconscionable.
The Court held that Parkingeye had a duty under its management contract with the owner of the Retail Park to manage the car park for the benefit of all customers and, accordingly, a contractual obligation to deter free parking beyond the permitted limit.
Although the charge of £85 was clearly intended as a deterrent, rather than as compensation for any loss suffered, the Court held it was not out of kilter with fines elsewhere and it would be wholly uneconomic for Parkingeye to enforce payment if it was substantially less. In fact, it is clearly in the wider public interest to allow the recoverability of parking charges.
The 1999 Regulations require any contractual term of this sort to meet the requirements of good faith. It must not cause a significant imbalance in the rights of the consumer as against the provider of the services or goods.
Given that Parkingeye display clear warning notices and do not charge a disproportionate amount (being only £50 if prompt payment was made), the Court held that their terms were fair and enforceable. The customer received 2 hours free parking and there was no significant imbalance in the parties’ rights given the need to keep spaces available for other customers. There would, of course, be cases where parkers who overstayed just a few minutes would pay a large sum for the additional parking time but this was simply unfortunate.
So, providing that the charge is reasonable and customers are made aware of the terms upon which they are allowed to park, there is nothing unlawful or unfair in charging a sum that seeks to deter overstaying or penalise those who do so. The law is sufficiently flexible to distinguish between arrangements such as these and commercial contracts where the sum payable on breach has to be based on a genuine pre-estimate of the actual loss suffered.