Supreme Court sets an important precedent in consumer contracts law

 Mr Beavis took action after he was given an £85 ticket for overstaying a two-hour parking limit by almost an hour. The case of Beavis v ParkingEye hinged on whether the fine charged by parking management company ParkingEye was classed as a penalty, which would make it unlawful as penalties need to bear a relation to an actual loss incurred. In this case the company incurred no loss from the overstay. However, the Supreme Court ruled that the fine was not a penalty as the charge authorises the company to control access to the car park in the interest of customers and the wider public. The judgment said fines were beneficial to motorists themselves as they make parking spaces available to them which might otherwise be clogged up by long-stay users. John de Waal QC of Hardwicke Chambers, who acted for Barry Beavis, said the case sets a new test for ‘take it or leave it’ consumer contracts as the law was last considered at this level 100 years ago. He said: ‘Until today, charges which had been agreed in advance, payable on 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 that deterrent charges will be allowed if there is some commercial justification for them.’

 

Authors: Howard Tilney

Published: 10 Nov 2015

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