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Wednesday 4 November 2015

Beavis loses parking case. Lord Neuberger sends strong message to Government that consumer rights laws have gone too far.


The long running issue of parking charges for overstaying in a free car park has been decided, with judges finding 6-1 in favour of the parking company over the motorist.

Consumer rights laws explicitly address the issue of traders forcing contracts on consumers, and define an example of an unfair term one where the consumer must pay a disproportionately high sum in compensation - which this clearly is, given both the normal cost of parking in the area (£3 all day) and ParkingEye's average cost per ticket issued of under £18. In these situations, Consumer Law asks whether the consumer would have come to the same deal if they were allowed to negotiate the contract.

Lord Neuberger neatly sidestepped that problem by stating:
"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. In the first place, motorists generally and Mr Beavis in particular did accept it"
This is of course a circular argument which could apply to any case of this nature. As this is a Supreme Court judgment it is binding case law and will apply to all cases from now on. If a number of consumers conclude a contract with a trader, than that contract will be deemed to be reasonable because a number of consumers concluded the contract. Thus the protections of the Unfair Terms in Consumer Contract Regulations 1999 and its successor The Consumer Rights Act 2015 are done away with at the stroke of the pen.

Lord Neuberger is no fool and will know the implications of his decision. The message from the judiciary is clear - a contact is a contract, whether business or consumer, and there cannot be any retrospective attempt to point out unfair terms. The consumers only cause of action would be to refuse to enter the contract. If the Government wish to restore consumer rights then they will need to further legislate.

Consumer Rights Act 2015
64 (4) A term is unfair if, contrary to the requirement of good faith, it causes a
significant imbalance in the parties’ rights and obligations to the detriment of
the consumer.
Schedule 2 - 6 A term which has the object or effect of requiring a consumer who fails to
fulfil his obligations under the contract to pay a disproportionately high sum
in compensation.

EU Judgment Aziz v Caixa d'Estalva
in order to assess whether the imbalance arises ‘contrary to the requirement of good faith’, it must be determined whether the seller or supplier, dealing fairly and equitably with the consumer, could reasonably assume that the consumer would have agreed to the term concerned in individual contract negotiations.
In terms of penalties, this new judgment allows a charge to be deemed reasonable even if it greatly exceeds the cost to the trader. The trader is allowed to add an element for deterrence and a further element for a large profit margin. ParkingEye's cost are under £18 per ticket issued, so by allowing a charge of £100 the Supreme Court is setting the bar for all other courts that a profit of over 550% is an acceptable margin for damages for breach of contract. It is quite acceptable to charge a pensioner their entire weeks pension for a one minute overstay.

A further analysis will follow at a later date.

Happy Parking


59 comments:

  1. We all need to write to our MP's and demand that they bring in legislation to restore the balance in favour of the consumer. This judgement is not the end, but merely the end of the beginning in terms of extortionate penalties for parking on private land. And there remain many other ways in which the private parking companies fall flat on their faces, including signage. Their Lordships were of the opinion that signs were prominent and adequate in this case, therefore in situations where it is not this ruling need not hold sway. And many PPC's simply do not have a contract which allows them to pursue legal action.

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  2. so this is for £85, is £100 commercially justifyable or more?

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  3. I doubt any consumer would agree to a penalty term like that, their argument is silly!

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    1. When you make a significant income such as the Lords do, the amount minuscule. they have lost sight of reality. However it is what it is and it makes PE (and all the other PPC's) a very profitable company as a result.

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  4. The question is does this only relate to free car parks; or is for pay and display as well?

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    1. The danger is that small claim judges will now just rule for all private parking tickets in favour of the PPC, but the defence will hopefully include more than just the sum charged is excessive but on other items such as signage. Also it should be allowed to make the point that PE actually paid £2000 a month for the right to manage the 'Beavis' Car park which makes it unique.

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    2. Most PPCs give the landowner a kickback on each ticket. The only difference here is the amount is agreed in advance. There is really no difference in the operation. Not at all unique.

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    3. In Beavis, PE established themselves as the principal by paying a fixed amount of £1,000 per week; in most other instances such as Hospitals and service stations, PE act only as the agent.

      As agent they have to pay Vat on the services they provide to the principal; whereas, as principal, no Vat is payable as it's treated as damages.

      I would like to see how commercial justification applies at a Hospital!

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  5. I detect a strong whiff of "uppity peons bothering us with minutiae" from this court.

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  6. Well this case takes into account that this was a fee free parking space, and the court agrees that this fine was a deterrent only. taking cavendish case into account exorbitant charges when in contract was appealed.

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  7. Also £100.00 has been set as maximum charge beyond which question can be raised regarding its validity.

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    1. I thought the £100 is the maximum set by the BPA;, so based on this judgement there's is nothing to stop them, (the BPA that is), increasing it to say £150 or £200

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    2. commercial justification raising it to £500 on certain carparks where £100 still didn't stop infringement of a whole host of terms....My plumber must of been following the case his quotation includes a 14 day payment terms failure to abide by his terms and conditions will incure a 100 charge (reduced to 50 if full invoice paid within 7 days)

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  8. I don’t understand how a contract ‘will be deemed to be reasonable because a number of consumers concluded the contract’ when in Aziz v Caixa d'Estalva we have the clear wording of ‘in individual contract negotiations’.

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  9. i thought BPA members have to abide by rules as does POPLA and that is a pre estimated loss.....this case surly only applies if in court its commercial justified, the BPA rules don't mention that?

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  10. Would love to see how they would rule on the same car returning within the prohibited "no return" time if you could prove different drivers. Contract is with the driver, not the car...

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  11. sad day for common sense...makes me wonder why parking eye dropped my case a couple of weeks ago...still they did so more fool them.

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  12. Surely, if the 'fine' includes an element of profit then it's a contractual charge, not damages. Therefore, PPCs will have to pay VAT, business rates, etc. Be careful what you wish for ...

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  13. The whole thing is about PPC's making money, little or nothing to do with controlling car parks. With technology that's available today, why don't the facilitate a way of paying for your parking if you are running late and do overstay. Surely that's the way forward if this isn't just a money making exercise for the PPC'S

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    1. There is a way to do that now, PaybyPhone parking meters in london text you 15 mins before your time is due, you can then text back if you want to add extra time.

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  14. As far as I can see, the Consumer Rights Act 2015 was not raised in the appeal because the parking incident occurred before it came into effect, which I believe means that this ruling does not directly affect any ADDITIONAL consumer protections that this Act provides. Of course, judges will now be very much influenced by the thrust of this ruling, whatever the law says.

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  15. Maybe that would also give support for the "Use of my car to post notices or photography for commercial purposes is charged at £500 a pop. Acceptance is by performance" malarkey.

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  17. In light of the current judgement, what's your thoughts on this;-
    my understanding is this all refers to an implied contract due to the fact that the signs state "by parking you agree to the terms and conditions"
    That being the case, what would happen if you put your own sign in your car window stating you do not agree to the parking conditions. ?

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    1. Please can you use a different name to post your comments! Confusion will abound otherwise...

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    2. You can only agree to a contract in law by direct action, not inaction.

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    3. I've thought about this too. I was once sent a contract of employment to sign, there were some bits I disagreed with ("change of work location without notification or compensation" or something similar) so I crossed them out before signing it. HR never queried it and presumably filed it as my actual contract of employment. So why can't I just put an piece of paper on the Parking sign with a contract amendment and take a photo of that. The PPC couldn't then possibly claim that I have agreed to their version of the contract as I have negotiated my own terms :)

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  19. Lord Toulson seemed to get it spot on. Shame on their other lordships.

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  20. It's all done and dusted now though. Prevarication aside what we need now is a way to defend tickets using the judgement. There may well be ground to do so as their general acceptance of the BPA Code of Practice being mandatory is worthy of use.
    If only we could make the DVLA agree to it, that it would make interesting times ahead.

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    1. Oh, forgot to mention but the BPA may well be coming to an end. This judgement is going to make it worthwhile for PPC's to move to the IPC on the basis of membership costs and less chance of appeals allowed through the IAP.

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    2. As other people have alluded to - the GPEOL argument still has ground if they are claiming loss for breach of contract. If it's a claim for a contractual charge, then highlighting the absense of VAT and business rates (how can a PPC sell a service to park in a carpark without being liable for business rates) surely indicates that it is a disguised fine.

      Plus we need to get smarter at the signage angle - they are all badly written so pointing out various interpretations. Make the PPC work and produce their own contemporary photos for each parking event - if I had to appeal I would always submit a badly taken nighttime photo from a stupidly high or low angle to highlight how hard it was to even see the sign, and then make the PPC rebut this with their own - not their stock photo taken on the day that the sign was errected, but an up to date photo - this would hugely hamper the ANPR operations.

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    3. No, it doesn't. The judgment has specifically made clear that the charge does not have to be a GPEOL and that it is not a contractual charge. See para 94 with regard to the latter.

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    4. GPEOL would still be required where the breach is due to non payment, wrong registration or "flipped" ticket for instance.

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  21. The world has changed with this judgement and it goes well beyond parking. Anyone can have a contractual charge to limit use of a scare resource and to avoid unwanted behaviour. Just a few ideas:

    1) A contractual charge of £85 for anyone using a cubical for more than 10 minutes in loo provided for customers.
    2) A contractual charge of £85 for anyone staying beyond the free period of 2 hours in a public open space or park.
    3) A contractual charge of £85 for anyone not consuming fruit bought from a supermarket within the free period of 5 days. This should limit waste.
    4) A contractual charge of £85 for anyone cold calling at my door for more than the permitted free period of 5 minutes. This should get rid of salesmen.
    5) A contractual charge of £85 for anyone not washing their hands after using a loo provided for customers. This has positive health benefits.
    6) A contractual charge of £85 for anyone overstaying the free period of 10 minutes drinking up time at a pub. This should reduce anti-social behaviour.

    There must be many many more.

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    1. There are many, many flaws with this suggestion but the critical one is this.

      How do you plan to enforce any of these in a court of law?

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    2. Automatic facial recognition cameras of course.

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    3. Right and how will you know the name and address of the person in order to issue the claim?

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    4. Ok, these are frivolous examples. The point is that the law has changed and all of these cases ARE now legally enforcable if an appropriate sign is displayed.

      I don't really want to get into the technology available - CCTV, various databases and information that traders can collect free from social media, loyalty cards, credit cards etc.

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    5. "A contractual charge of £85 for anyone cold calling at my door for more than the permitted free period of 5 minutes"

      I actually use this one for telephone surveys, but only charge £50.

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    6. So it looks like obscuring the licence plate on entry/exit in these type of car parks is the answer? If there is no apparent ANPR overstay then there can be no nasty letter in the mail. Since there are no feet on the ground they will never know?
      Q

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    7. A contractual charge of £85 for anyone sitting next to me on a train. I only need to put a sign out next to me?

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    8. I think that a more realistic contractual penalty that we will see fairly soon is a penalty charge for missing 'contracted' doctors/hospital appointments.

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    9. Well considering the time I have to wait after the time of the appointment in the local hospital (3 hrs was the last one) I would be quids in as its been 10 years since I missed one.

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  23. A question. This was a case of free parking overstay. What about parking in wrong spot in a car park where you already pay a monthly fee of £30.00 And they never gave me a contract. Thus would the same rule apply for general public parking fine which is usually a big board at the entrance with fine of £85.00. Then would the unnecessary penalty charge appeal hold as in the case of cavendish case mentioned along with Beavis case. Kindly advice.

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  24. A sad day for common sense.
    Good can come of this only if it stirs up enough inspiration for enough of us all to campaign to get the law changed.

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  25. Email to Chorley Towers.

    "Following the recent Supreme Court ruling I understand that I must negotiate contract terms with you in advance of parking in car park under your supervision. I have reviewed your terms and conditions and I do not accept that a parking charge of over £5.00 is reasonable. I will agree to a contract with this revised amount. If you are not happy to accept this revised terms please advise me in advance of my use of your car park."

    That should do it!

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    1. Good luck with that one

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    2. Should I put a read reply on it then?

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    3. "This is the leading English contract law case on the rule that one cannot impose an obligation on another to reject one's offer. "silence cannot amount to acceptance"."

      Sounds like we have gone in one big circle here.

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    4. There's a difference between silence and conduct

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    5. Good news - Parking Eye have replied. They have thanked me for my email and have promised to deal with it within 5 days. So it seems that we have negotiated a revised contract.

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