A failed challenge to an £85 overstay fee at a Chelmsford car park has been welcomed by lawyers as good news for the owners of car parks and, indirectly, retail developments.
The Court of Appeal rejected a claim that the fixed charge for staying longer than two hours at the Riverside retail park was unenforceable both at common law, because it was a penalty, and also under the Unfair Terms in Consumer Contracts Regulations 1999.
With such schemes in widespread operation across the country, Adam Colenso, partner at Wedlake Bell LLP, said that the decision would be welcomed by the owners of car parks serving retail parks and the contractors who operate the car park management services for such owners, and would have knock-on beneficial effects for retail property owners.
He said: “It provides authority that the enforcement of charges is legal if a car owner has parked for longer than the stated free period.
“These kind of car park management arrangements benefit the retail park owners (who gets paid a regular fixed amount by the car park management contractors), the contractors themselves (who get to keep the payments), the customers who leave before the free period expires (who get the benefit of the use of a car park with more parking spaces available) and the tenants of the shop units (who can expect to have a greater footfall of customers because more people use the car park).
“The retail park owner will also hope to be able to obtain higher rents in the long term if more customers come to the retail park.”
However, he added: “The terms of the ruling in no way provide a blanket approval of all such overstayer parking charge schemes but suggest that they are likely to be legal providing that (i) the charges in question are broadly comparable to those charged by local authorities in respect their parking facilities and (2) the terms on which parking is permitted and charges will be made are clearly communicated.”
Property law consultant Allyson Colby added that the owners and operators of private car parks will “breathe a huge sigh of relief following this decision”.
She said: “Millions of people charged for overstaying in private car parks up and down the country might have been able to claim refunds, had the Court of Appeal agreed that the charge was unenforceable at common law because it was a penalty, or that the charge for overstaying was unfair and therefore unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations 1999.
“This is because, in English law, motorists would have been able to ask for ‘restitution’ of the sums that they had been required to pay for overstaying on the ground that they had paid up under a mistake of law and that their money should be returned to them.”
She said that it is important to remember that the Court of Appeal did not consider the charge levied in this particular case to be either “extravagant or unconscionable”, and that, if the charge had been grossly disproportionate, the court might have declined to enforce it.
She added: “Unfortunately, the court did not explain when charges for overstaying in private car parks might fall into this category (although it did suggest that the charges imposed by local authorities for overstaying in public car parks offer a useful comparison).”
Parkingeye Ltd v Beavis Court of Appeal (Moore-Bick and Patten LJJ and Sir Timothy Lloyd) 23 April 2015
Sa’ad Hossain QC (instructed by Harcus Sinclair) appeared for the appellant
Jonathan Kirk QC and David Altaras (instructed by Cubism Law) appeared for the respondent
Julia Smith (instructed by the Consumers’ Association) made written submissions for the intervener.
