Car parking charges designed to deter shoppers from overstaying were, nonetheless, enforceable

No one is entitled to park on private land without the landowner’s permission. However, the owners and operators of car parks serving retail and other properties often permit visitors to park for a limited period of time without requiring any payment from them. On the flip side of the coin, they often reserve the right to charge motorists for overstaying their welcome. Provisions in the Protection of Freedoms Act 2012 suggest that such charges are enforceable. However, charges for parking and overstaying made by the owners and operators of private car parks are not subject to any statutory rules or limits – and Parkingeye Ltd v Beavis [2015] EWCA Civ 402; [2015] PLSCS 125 is the first case in which charges for overstaying have been tested in court. The motorist had overstayed the two-hour limit in a car park on a retail park by an hour. The car park operator put in hand the procedure for recovering its £85 charge (which would have been reduced to £50 for payment within 14 days) and eventually began proceedings to recover the sum claimed. The motorist accepted that the operator had displayed prominent signs advertising the charge for overstaying, but suggested that the charge was unenforceable because it was a penalty. Traditionally, the courts have regarded contractual terms that require one of the parties to pay or forfeit a sum of money on breach, which exceeds the loss that the other can reasonably be expected to incur as a result of such breach, as penalties. By contrast, provisions for the payment of liquidated damages, representing a genuine pre-estimate of the loss that the innocent party expects to incur as a result of the breach, are enforceable. However, the Court of Appeal drew attention to recent decisions suggesting that the test of enforceability is not that simple and to the fact that the court’s power to intervene arises where the payments required are extravagant and unconscionable. The court accepted that the charge was designed to deter motorists from abusing the parking facilities and that, on the face of it, the car park operator did not suffer any financial loss when a motorist overstayed because, if the space in question had been vacated, it would have remained unoccupied or would have been occupied by another car free of charge. However, the operator risked losing its contract to manage the car park for the landowner if it failed to ensure a constant turnover of cars for the benefit of retailers and customers. Furthermore, while it could have charged less for overstaying, it would be wholly uneconomic to collect or enforce such charges by taking legal proceedings against motorists who outstay their welcome. Visitors to the retail park were being offered valuable free parking and there were legitimate reasons for restricting this to a two-hour period. The charge for overstaying was justifiable and was neither extravagant nor unconscionable. Therefore, it was enforceable at common law. The Court of Appeal went on to dismiss the motorist’s claim that the charge was unfair and unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations 1999. The charge was similar to those levied by local authorities in municipal car parks. There were no concealed pitfalls or traps and there were very clear notices on display advertising the charge to motorists who entered the car park. Allyson Colby is a property law consultant