Barry Beavis loses Appeal to the Supreme Court - What next ?

[steampowered]

Parking Eye has won its claim for a £85 parking charge in the Supreme Court. This decision is legally binding on all courts in England & Wales.

 

The Supreme Court decision is available here: https://www.supremecourt.uk/cases/uksc-2015-0116.html

 

I have read the decision - all 124 pages. In a nutshell, this is what it says:

 

The law before Parking Eye v Beavis

• It has been clear for hundreds of years that a clause in a contract which is a “penalty” is not legally enforceable.

• During the past few decades, there has been a bit of confusion surrounding the exact test which the courts should apply to determine whether or not something is a “penalty”.

• Historically, the test was whether the sum was a “genuine pre-estimate of loss”. But in the past few decades many judges have decided a clause will not be a penalty if it is “commercially justified”.

 

The law as stated by the Supreme Court in Parking Eye v Beavis

• The Supreme Court said that the test for deciding whether something is a penalty is as follows: The court said: “The true test is whether the impugned provision … imposes a detriment on the contract-breaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation”.

• Therefore, the court had to decide whether Parking Eye’s charge was “out of all proportion” to its interest in enforcing a parking contract.

 

The decision of the Supreme Court in Parking Eye v Beavis

• In this case, Parking Eye had charged Mr Beavis a fee of £85 for overstaying 2 hours free parking in a retail park.

• The court said that the landlord’s objectives were reasonable. These objectives are: (1) to encourage the efficient use of parking space and (2) to provide an income stream to meet the costs of operating the car park and enable Private Eye to make a profit, because otherwise Parking Eye’s services would not be available.

• The court felt that the £85 amount was valid because it was not out of all proportion to Parking Eye’s interest. The court felt £85 was similar to the maximum amount of £100 is mentioned in the BPA’s code of practice and the amounts charged by local authorities.

 

What about the fact that Parking Eye is not the land owner?

• The Consumers Association intervened in the case to argue that Parking Eye could not recover £85 because it was not the land owner.

• The court said that the penal or non-penal nature of the scheme cannot depend on whether the landlord operates the car park himself or whether he employs a contractor like Parking Eye. The motorist does not know or care what interest the contractor has in the land.

 

What does this mean for PPC claims?

• It sounds like it will now be almost impossible to defend PPC claims on the basis that the PPC is not the land owner. The court was very clear on this – read paragraph 99 of the judgment.

• It sounds like it will be very difficult to claim that PPC charges are penalties in the case of retail parks. But it will still be possible to make this argument in other situations. For example, even if £85 is valid in the case of a retail park it can still be “out of all proportion” on a residential estate.

• It is still possible to fight parking court cases for other reasons, such as unclear signage.

Edited November 4, 2015 by stu007

[Bailiff Advice]

Needless to say...the BPA are delighted....

 

http://www.britishparking.co.uk/News/british-parking-association-calls-for-summit-following-supreme-court-decision

[citizenB]

How long did the guy overstay the 2 hour free limit ?

[steampowered]

How long did the guy overstay the 2 hour free limit ?

He overstayed by 56 minutes.

 

The court seemed to say that the charge would be valid even if he had only overstayed by a minute. This is what the court said:

 

ParkingEye’s business model could have had a graduated charge for overstayers

based on how long they overstayed, but the fact that it did not do so does not render

it unfair. Even if it had done, it would presumably have involved a specific sum for

each hour or part of an hour, in which case the same complaint could be made. More

fundamentally, as we have explained, the £85 charge for overstayers was not a

payment for being permitted to park after the two hours had expired: it was a sum

imposed for staying for more than two hours. The notion of a single sum between

£50 and £100 for overstaying even by a minute, appears to be a very common

practice, in that it is adopted by many, probably the majority of, public and private

car park operators. As for the suggestion that the overstay may have arisen from

unforeseen circumstances, we find it hard to regard that as relevant. The object of

the £85 charge is simply to influence the behaviour of motorists by causing them to

leave within two hours. It is reasonable that the risk of exceeding it should rest with

the motorist, who is in a position to organise his time as he sees fit.

[unclebulgaria67]

Has the motorist gained anything from this ruling ?

 

If not, will this case now be seen as very unhelpful to motorists and should never have been started ?

[obiter dictum]

I take it the parking company will have to still be party with the land owner to issue any claim.?

The parking company will still need a financial interest in that land??

 

Is that correct??

[citizenB]

Has the motorist gained anything from this ruling ?

 

If not, will this case now be seen as very unhelpful to motorists and should never have been started ?

 

 

That is what I was thinking !

[steampowered]

I take it the parking company will have to still be party with the land owner to issue any claim.?

The parking company will still need a financial interest in that land??

 

Is that correct??

That is not correct

 

This is addressed at paragraph 99 of the decision (https://www.supremecourt.uk/cases/docs/uksc-2013-0280-judgment.pdf)

[Fair-Parking]

May I be allowed to make the following comment. I think that it would be reasonable to expect more aggressive parking enforcement on private land and more attempts by ParkingEye and other companies to force the issue through the county courts and in that respect our 8 year old parking ticket protection scheme is not affected by this judgment.

 

I'm sure that it is in the public interest that more people would like to hear that than object to it

[obiter dictum]

It seems what this chap has done to the parking industry is the same the Rankins did to the consumer credit industry

[ericsbrother]

So that is it, illegal penalty clauses are now legal because they have been used by parking companies for a long time and no-one has challenged them before.

As I have postulated, they have now placed a consumer contract on the same footing as a bilateral contract negotiated between lawyers acting for both parties and because money would be lost by the parking companies if it was otherwise and limited the extent of the Unfair Trading Terms legislation in the same way becasue that would curtail PE's ability to enforce their suspect contract.

Follow the money as they say.

Was the case unhelpful? I dont think so, contract law judgements have been heading in that direction for about the last 15 years. Most judges come from a background of commercial law so they are making decisions that would make their previous jobs in the City much easier if they were in place before they became judges.

I also note that they have fired a warning shot at the politicians with regard to the EU legislation and are basically warning the legislators not to interfere with their decision.

[steampowered]

The decision was a bit different to the banking charges decision. The banking charges decision essentially said that, in principle, banking charges can never be penalties because they are the price paid for a service rather than something designed to punish a breach of contract.

 

This decision did not say that all parking charges are enforceable in principle. The court held that sums payable on breach of contract (such as parking charges) can be enforced as long as they are not 'out of all proportion'. The court felt that, in the context of a retail car park offering 2 hours free parking, £85 was not 'out of all proportion'.

 

In future, it will be almost impossible to make the penalty charges in the same situation - i.e. overstaying in a retail car park offering free parking. It is however still possible to make the argument that a given charge is 'out of all proportion' to the parking offence in different situations.

[steampowered]

So what is this site going to advise if a parking site has a proper contract, decent signage, what are people to do......?

My advice in a retail park situation will be that, in this situation, you have to take a gamble whether the PPC will go through with court.

 

If you think they will (e.g. Parking Eye), you should probably pay. If you think they won't (most other PPCs), for now it seems unlikely they will be in a position to issue many court proceedings.

 

In other situations, it will be necessary to weigh up the circumstances to decide whether the charge is 'out of all proportion' or not. In many cases it will be in proportion. In some other cases it might not be.

 

In all cases, the PPCs should still be challenged - they need to prove the parking offence and they need to prove that the signage was sufficiently clear and prominently placed.

[ericsbrother]

There are still many reasons why no contract is formed and those arguments will still be used where relevant. One problem we have is that the parking company thickos will now think that everything they do MUST be right because they wish it so.

Hva the internet forums strengthened the position of the parking companies? No, they have always claimed they are always right and have been forced to justify themselves and in hundreds of cases are completely unable to do so. I worry more about the overruling of the reasonableness test for a consumer contract than the penalty part of the judgement, that will be now used to prevent you getting your money back when you buy a dud motor from a dishonest dealer as long as he tells you that it is "sold as seen" or some other such term that is or was unlawful. A contract is a contract, after all.

[johnjordan]

So where does it go from here?

[Peterbard]

Could this principle( the penalty not considered to be a loss but the charge enabling the service to the owner) not be used in a RLP context ?

[SabreSheep]

There are potential implications in a lot of other areas we cover on this forum.

[colin11]

Barry Beavis's take on today

 

Let me give my interpretation of what happened today and where this leaves motorists, as well as what is next.

Supreme Court decided with a majority of 6-1 that an £85 charge for an overstay in an otherwise free car park was acceptable as the charge is not excessive.

 

No indication of what would be excessive was given.

This is a re-write of the doctrine of penalties which had previously said that a charge for a breach (whose predominant function was to deter) could only be to compensate for any losses suffered.

And by determining this, Supreme Court has thrown out over 100 years of fairly consistent judgements.

The majority found that the charges should be allowed (in part) because many other companies employed to manage parking on private land also charge a similar penalty.

 

By that logic, the speed in lane 3 of a motorway should be 92mph.

Here are some paragraphs that are (in my opinion) significant:

 

99. In our opinion, while the penalty rule is plainly engaged, the £85 charge is not a penalty. The reason is that although ParkingEye was not liable to suffer loss as a result of overstaying motorists, it had a legitimate interest in charging them which extended beyond the recovery of any loss.

 

100. None of this means that ParkingEye could charge overstayers whatever it liked. It could not charge a sum which would be out of all proportion to its interest or that of the landowner for whom it is providing the service. But there is no reason to suppose that £85 is out of all proportion to its interests.

It is higher than the penalty that a motorist would have had to pay for overstaying in an on-street parking space or a local authority car park. But a local authority would not necessarily allow two hours of free parking, and in any event the difference is not substantial.

They (motorists at Riverside Retail park) must regard the risk of having to pay £85 for overstaying as an acceptable price for the convenience of parking there

 

101. We conclude, in agreement with the courts below, that the charge imposed on Mr Beavis was not a penalty.

 

108. Could ParkingEye, “dealing fairly and equitably with the consumer, … reasonably assume that the consumer would have agreed to such a term in individual contract negotiations”? ...........The question is not whether Mr Beavis himself would in fact have agreed to the term imposing the £85 charge in a negotiation, but whether a reasonable motorist in his position would have done so. In our view a reasonable motorist would have agreed. ..........The risk of having to pay it was wholly under the motorist’s own control. All that he needed was a watch. In our opinion, a hypothetical reasonable motorist would have agreed to objectively reasonable terms, and these terms are objectively reasonable.

 

The notion of a single sum between £50 and £100 for overstaying even by a minute, appears to be a very common practice, in that it is adopted by many, probably the majority of, public and private car park operators

As for the suggestion that the overstay may have arisen from unforeseen circumstances, we find it hard to regard that as relevant.

There are many circumstances in life when the only way of being on time is to allow for contingency and arrive early.

Further, as Mr Kirk QC pointed out on behalf of ParkingEye, it is equally true that the consumer gets the benefit of free parking in that unusually attractively located car park for two hours, and, save in unusual circumstances, it is entirely within his or her control whether the two-hour limit is exceeded

 

I tnink that what this demonstrates is that a Supreme Court Judge does not live in the real World. He holds a priveledged position, earns a fortune annually and probably has never visited an out of town shopping centre, ever. He has a nanny for that. If an £85 charge is not excessive for being a few inches the wrong side of a white line, or being twelve minutes over an artificial 'free' period - then what is?

 

The only one to see it as it is, was Lord Toulson:

 

295. I disagree with the other members of the court in the parking case. Since I am a lone voice of dissent and the judgments are already exceedingly long, I will state my reasons briefly

It is simply a penalty

 

Applying that test, (the test in ECJ Aziz case) it follows that the £85 penalty clause created a significant imbalance within the meaning of the regulation, because it far exceeded any amount which was otherwise likely to be recoverable as damages for breach of contract or trespass.

 

By most people’s standards £85 is a substantial sum of money.

 

There may be many reasons why the user of a car park in a retail park may unintentionally overstay by a short period. There may be congestion in the shops or the user may be held up for any number of reasons. There may be congestion trying to get out of the car park. In short there may be numerous unforeseen circumstances. No allowance is made for disabilities (other than the provision of bays for blue badge holders).

 

The point is that the penalty clause makes no allowance for circumstances, allows no period of grace and provides no room for adjustment.

The trial judge and the Court of Appeal were impressed by a comparison with the charges at local authority car parks. The comparison is seductive but superficial.

I would therefore have allowed the appeal

See! He just got it!

 

Anyway - a 6-1 loss means the Supreme Court has re-written the law. The new law is dangerous, as it opens the door to unscrupulous operators and rogue traders in other industries to charge 'penalties' for breach. Things like exceeded download limit of rthe month; late collecting your child from Nursery, or missed doctors appointment. It's really scary.

 

I guess the question will arise "Does this mean I have to pay my parking charge?" - the answer is still NO. Most PPC fall down in one way or another. They're lazy and expect that people don't know the law so will cave in. Ask yourself

 

Did you see the signage?

Was the signage clear (e.g. legible, written in plain English)?

Were you the driver?

Were the markings clear?

Were the parking rules reasonable?

Is the amount be requested reasonable for the contravention?

Were you entitled to park in the disabled bay?

Do you own the parking space?

Does the parking company have the right to offer parking?

An appeal can still be successful.

What next??

 

I expect Government to introduce legislation.

 

I have been involved in meetings with DCLG to, as they put it, help shape policy on parking on private land. I expect an independent regulatory body with real powers to ensure com[compliance with a Code of Practice written for the new regulator. There will be a cap on charges. PPC will not have it their own way.

Don't give up the fight! We may have lost the battle but we can still win the war!!

 

Barry

Edited November 4, 2015 by colin11
Put spaces in

[SabreSheep]

The next point of attack is simple

 

Stop shopping at places that employ these cowboys to run their carparks

[Peterbard]

I think that this is the significant clause

 

99. In our opinion, while the penalty rule is plainly engaged, the £85 charge is not a penalty. The reason is that although parkingeyeicon was not liable to suffer loss as a result of overstaying motorists, it had a legitimate interest in charging them which extended beyond the recovery of any loss.

 

it says that whilst the penalty clause is engaged in other words the common law requirement that a penalty occurs if an agreement is breached is activated, the sum which is charged does not have to be a figure which reflects losses, as in the usual scenario, because the charge is a device to raise the money to service the contract, and not a result of the penalty. In other words it does not matter if there are no claimable damages because the charge to the motorist is not reciprocal penalty charge but one that is raised to service the agreement with the owner.

[caro]

I think that this is the significant clause

 

99. In our opinion, while the penalty rule is plainly engaged, the £85 charge is not a penalty. The reason is that although parkingeyeicon was not liable to suffer loss as a result of overstaying motorists, it had a legitimate interest in charging them which extended beyond the recovery of any loss.

 

it says that whilst the penalty clause is engaged in other words the common law requirement that a penalty occurs if an agreement is breached is activated, the sum which is charged does not have to be a figure which reflects losses, as in the usual scenario, because the charge is a device to raise the money to service the contract, and not a result of the penalty. In other words it does not matter if there are no claimable damages because the charge to the motorist is not reciprocal penalty charge but one that is raised to service the agreement with the owner.

 

So could bank charges be argued similarly, with owners being shareholders? As has been said - lots of implications.

[citizenB]

The next point of attack is simple

 

Stop shopping at places that employ these cowboys to run their carparks

 

I agree with this. Start targeting the Retail Outlet Management with letters advising that you wont shop there for fear of overstaying.

[silverfox1961]

I think that POPLA need to allow mitigating circumstances in their appeals process. At the moment POPLA do not allow any form if mitigation and if that is raised at appeal, they may refer it back to the PPC but the PPC has already turned the motorist down when they have tried the mitigation route already. PPCs don't want to lose any form of cash hence the rejections with valid mitigation.

 

Companies like McDonalds need to ensure that if a motorist is likely to be there longer than the (usual) 90 minutes, that they make it much clearer that the motorist should approach a member of staff. This would have the effect of protecting legitimate customers whilst penalising the other drivers (taxis) who use the car park as a convenience.

 

You may notice I don't mention the IPC in this. PPCs linked to the IPC tend not to use PoFA 2012 to it's full capacity by disallowing appeals by the keeper so until they get their house in order, I doubt they will want to go to court.

 

To pay or not to pay? My opinion, if you have a genuine reason to appeal, medical emergency, held up at a store due to queues, cannot get out of the car park (ANPR only) then appeal but for those with no valid reason, for now I would suggest paying the lower fee.

 

I don't believe this ruling is retrospective so where does that leave the cases from before the initial appeal?

[citizenB]

Well there you have it.... Bit of reading to do.

 

https://www.supremecourt.uk/cases/uksc-2015-0116.html

 

http://parking-prankster.blogspot.co.uk/2015/11/beavis-loses-parking-case-lord.html

 

is this the final Judgment? https://www.supremecourt.uk/cases/docs/uksc-2013-0280-press-summary.pdf

 

Links to the judgment

[citizenB]

Posts have been brought over as quotes in order to start this thread with Steampowered's post

 

So are these supposedly experienced judges saying that £85 is not an excessive charge for overstaying a free parking - I guess on their salaries £85 doesn't seem much ! this isn't justice, this is granting parking eye, and their other equally distasteful colleagues, a licence to print money. time to lobby MP's I think

 

Not really surprised, as the owner of the land or those who hold rights of use, need to have a way of stopping people staying for a period that would not be in their commercial interest. If they did not apply a penalty amount enough to deter people, then in some areas, people would just park and pay the amount.

 

Now these private parking companies have the precedent they can use to enforce all the tickets they issue, if the follow all the correct steps.

 

It is the way of the world, when numbers of cars and people mean that companies will apply measures to increase or protect revenues. My local train station car park was free for many years and now it is £4 a day i think. They have done it because the car park was getting full every day and there is no current room to extend. Applying the charge at the level deters even the people who were using the trains and cars are now parking in nearby roads.