News & Insights

Landmark ruling on parking fines

Car park managers and landlords breathe a sigh of relief following a decision of the Supreme Court.  Michael Higgin explains.

On 4 November, the Supreme Court issued its ruling in ParkingEye Ltd v Beavis. This much anticipated case has caught the attention of motorists and landlords alike as it would decide whether car park managers and landlords could deal out hefty fines to motorists for defying parking restrictions.  The Supreme Court held that they could, within reason.

The case itself concerned an £85 fine issued by ParkingEye Ltd, who managed a car park in Chelmsford, to a certain Mr Beavis, for exceeding by 56 minutes a 2-hour parking restriction.

Penalty charges must protect a commercial interest

The reasoning behind the court’s decision was that ParkingEye Ltd were seeking to protect a ‘legitimate commercial interest’ by fining motorists that were not respecting the 2-hour parking restriction. The commercial interest was to have an efficient car park that they could effectively manage and the fines were a means of doing that. They had also put up clear notices warning users of their conditions and of the fines for flouting them.  The fine itself was also intended to fund the running of the scheme. The fine of £85 was therefore neither exorbitant nor unconscionable and was upheld as payable in full by Mr Beavis.

Although landowners and car park managers across the country will be glad that the ruling does not require a wholesale shake-up of car park agreements, particularly after the right to clamp defaulting car parkers was previously taken away, this does not mean that they will have free licence to charge motorists whatever they please.  Fines or penalties that are not for a legitimate commercial reason, such as encouraging the regular turnover of shoppers, could be seen as extortionate and unlawful.

Therefore, in the lives of many car park owners and landlords, nothing will change and indeed nothing will need to change if their fines are in proportion to the protection of their interest.  One thing to note is that the level of ‘what is an acceptable fine’ is not clear but it will need to be proportionate to what it is trying to achieve. Each situation will therefore need to be assessed on its facts. What is clear however is that if you are the owner of a busy car park, you will be within your rights to issue a fine to any offending motorist that has overstayed their welcome.

Unforeseen consequences?

Interestingly, this judgement may have repercussions elsewhere. Penalties not linked to the offended parties’ actual loss, will similarly be permitted in other areas of life, such as in construction, equipment hire, payment defaults or other commercial contracts.  Making such charges in line with “industry standards” is recommended.