Court of Appeal: Private parking fines may be fair

A recent Court of Appeal case has held that, contrary to the belief of many that private parking charges are unenforceable penalties at law, in certain circumstances such charges may be enforceable against consumers.

In Parkingeye v Beavis, Mr Beavis overstayed the two hour free parking period in a Milton Keynes car park. Mr Beavis refused to pay the resulting £85 parking charge on the basis that it was an unfair penalty clause - his rationale being that, as the car park was free to use, Parkingeye did not suffer any loss as a result of his overstay and therefore £85 was not a genuine pre-estimate of loss. He also argued that the charge did not comply with UK consumer law.

Whilst Mr Beavis' plight will no doubt be sympathised with by many, the Court of Appeal disagreed with him and held that the charge was neither a penalty nor unfair. The Court found that although Parkingeye did not suffer a direct loss as a result of the overstay, it could have suffered loss of reputation and indirect financial loss if it lost its contract to manage the car park as a result of poor car park management. The Court also held that there was significant commercial justification for the charge (even though its principal purpose was as a deterrent) and that the level of the charge was not "manifestly excessive".

From a consumer law perspective, the Court was happy that the overstay charge was sufficiently drawn to Mr Beavis' attention via signage and held that, when compared against parking charges in other car parks, £85 was not excessive.

The effect of this decision is that private parking charges imposed on consumers for deterrence purposes will not necessarily be unenforceable penalties so long as the amount concerned is not extravagant or unconscionable and clear details of the circumstances in which charges will apply are prominently displayed to consumers before the contract is entered into.

There could be another twist in this tale however. In July Mr Beavis will be appealing his case in the Supreme Court, which means the position outlined above could still change. We will keep you posted on the outcome.

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.