The End of Private Parking Penalties?

Feb 20, 2015

Isn’t it annoying when you go shopping and get caught out by private land parking rules? You go to a supermarket or large shopping centre but do not notice the signs at the front with the small print highlighting the terms of use of the car park.

Sometimes the fines that are handed out are astonishing with some rising to £100 or more. The average is around £50.

A recent report by John de Waal QC, prepared on behalf of the RAC Foundation, suggests that huge charges are being levied on drivers which are out of proportion to the losses suffered by the landowners. A fine of £100 is unlikely to be a genuine pre-estimate of loss and are therefore penalties, rather than appropriate damage payments.

What are penalties?

Penalties are payments demanded by one party from another which penalise the ‘guilty’ party. In other words, the sum demanded is more for the benefit of the ‘injured’ party, rather than a genuine estimate of the loss that may have been caused.

The Court do not favour penalties and generally treat them as unenforceable in contracts.

Court of Appeal next week

Next week the Court of Appeal is due to hear a dispute between Parking Eye and Mr Barry Beavis. Mr Beavis overstayed in a retail park by two hours and received an £85 fine. Mr Beavis is challenging the fine on the basis it is a penalty, rather than a genuine estimate of loss that Parking Eye suffered.

Why could this case be significant?

It is thought that if the Court agrees with Mr Beavis, and that the £85 is to be considered a penalty, this could see a dramatic overhaul of how private landowners deal with parking fines on their land. Furthermore, drivers who have stumped up the cash in the past to pay the fine could be due a refund as the fee charged would have been illegal. Professor Stephen Glaister, director of the RAC foundation, estimates that to be in the region of £100million.

For now, the fines remain legal, but keep an eye for an update on the outcome of this case in the coming weeks. 

Nicola Lucas

About the author

Nicola Lucas

Nicola is a member of our Business Law Team handling all the commercial requirements of her clients such as shareholder agreements and negotiating on commercial ...

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