Parking Eye lose case - have to pay parking!
Discussion
JustinP1 said:
Another interpretation of the above on 'Two hours free, more than two hours £75' is that the true consideration is not monetary, and the £75 charge for services is so far away from the other charge and so far away from a normal parking charge that it is to deter parking more than two hours and as such a penalty clause.
As I mentioned, it's not clear cut, and would depend on the facts of the case and the judge on the day, but that would be the new battleground.
What other charge (see my bold)?As I mentioned, it's not clear cut, and would depend on the facts of the case and the judge on the day, but that would be the new battleground.
My example was based upon that being the entire contract.
hoohoo said:
Civil Enforcement Ltd v McCafferty (3YK50188, Luton County Court, 21/02/2014), where Mr Recorder Gibson QC dismissed the appeal, and upheld the previous ruling of Deputy District Judge Wharton at Watford County Court, that the Claimant’s parking charge was a penalty, and therefore not recoverable.
Which is not the same as a finding that the charge was for additional services but that the intention was to deter the customer from using those services through a high price and as a consequence unenforceable under the rule against penalties.10 Pence Short said:
JustinP1 said:
Another interpretation of the above on 'Two hours free, more than two hours £75' is that the true consideration is not monetary, and the £75 charge for services is so far away from the other charge and so far away from a normal parking charge that it is to deter parking more than two hours and as such a penalty clause.
As I mentioned, it's not clear cut, and would depend on the facts of the case and the judge on the day, but that would be the new battleground.
What other charge (see my bold)?As I mentioned, it's not clear cut, and would depend on the facts of the case and the judge on the day, but that would be the new battleground.
My example was based upon that being the entire contract.
My point is "2 hours £30, more than 2 hours £75" may have some albeit tenuous commercial justification enough to get away without it being there to deter action.
But if the default charge is zero, and staying longer than the free period means a charge outlandish for normal parking then I would suggest it would be interpreted as a penalty clause.
In order for it to be a penalty it would have to be a charge made in consequence of a breach of contract, not a charge for the provision of an additional service.
What Justin is suggesting is that such a charge should not be enforced notwithstanding the fact it is a charge for services and not a charge for breach of contract.
What Justin is suggesting is that such a charge should not be enforced notwithstanding the fact it is a charge for services and not a charge for breach of contract.
Zeeky said:
In order for it to be a penalty it would have to be a charge made in consequence of a breach of contract, not a charge for the provision of an additional service.
What Justin is suggesting is that such a charge should not be enforced notwithstanding the fact it is a charge for services and not a charge for breach of contract.
Exactly. What Justin is suggesting is that such a charge should not be enforced notwithstanding the fact it is a charge for services and not a charge for breach of contract.
JustinP1 said:
The 'other charge' being zero.
...
But if the default charge is zero, and staying longer than the free period means a charge outlandish for normal parking then I would suggest it would be interpreted as a penalty clause.
If the charge is for a service rendered rather than as a penalty for breach of contract, it could be £1m per hour, if they so wished....
But if the default charge is zero, and staying longer than the free period means a charge outlandish for normal parking then I would suggest it would be interpreted as a penalty clause.
If the contract says you can park as long as you like, here is a schedule of our charges, there can be no breach for staying as long as you like. If there is no breach, there cannot be a penalty.
That does not give freedom to create penalty clauses, as perhaps in the case above, where you avoid the language of a liquidated damages or penalty clause, but give the effect of one. Simply pricing a service that you provide is not, on its own, however much you charge, going to give rise to it being considered a penalty clause, as per my understanding of contract.
10 Pence Short said:
JustinP1 said:
The 'other charge' being zero.
...
But if the default charge is zero, and staying longer than the free period means a charge outlandish for normal parking then I would suggest it would be interpreted as a penalty clause.
If the charge is for a service rendered rather than as a penalty for breach of contract, it could be £1m per hour, if they so wished....
But if the default charge is zero, and staying longer than the free period means a charge outlandish for normal parking then I would suggest it would be interpreted as a penalty clause.
If the contract says you can park as long as you like, here is a schedule of our charges, there can be no breach for staying as long as you like. If there is no breach, there cannot be a penalty.
That does not give freedom to create penalty clauses, as perhaps in the case above, where you avoid the language of a liquidated damages or penalty clause, but give the effect of one. Simply pricing a service that you provide is not on its own, however much you charge, going to give rise to it being considered a penalty clause, as per my understanding of contract.
My viewpoint is that people should be allowed to enter into their own bad bargains, and educate themselves to take responsibility for their actions.
However, the difference between:
"Free parking for two hours, £75 charge for failure to comply"
"Free parking for two hours, £75 charge for parking longer"
is effectively nothing to the parker. The £75 charge is clearly there to deter people staying more than two hours rather than be put forward for their genuine consideration.
In the words of Deputy District Judge Melville-Shreeve in the case that this thread was started for:
"Now let’s move on to the penalty charge point. Some of the Courts have found that, that varying amounts of money are penalties rather than a contractually agreed sum. It seems to me you have, in this case you have a particularly hard problem because the deal that you’re offering people is free parking."
In your first example, there is a breach of contract for staying. In your second, there isn't. People can stay as long as they want, if they're willing to pay for it.
Perhaps someone can come up with a case authority High Court or better on the issue of whether a price (and price alone)for a product or service can unilaterally create a penalty clause?
Guidance of the attitude towards judging consumer contracts by their price alone can be found in the Unfair Terms in Contracts Regulations 1999;
Perhaps someone can come up with a case authority High Court or better on the issue of whether a price (and price alone)for a product or service can unilaterally create a penalty clause?
Guidance of the attitude towards judging consumer contracts by their price alone can be found in the Unfair Terms in Contracts Regulations 1999;
Regulation 6 said:
Assessment of unfair terms
6. (1) Without prejudice to regulation 12, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.
(2) In so far as it is in plain intelligible language, the assessment of fairness of a term shall not relate–
(a)to the definition of the main subject matter of the contract, or
(b)to the adequacy of the price or remuneration, as against the goods or services supplied in exchange
This help underline the courts' unwillingness to interfere in the pricing of services and goods.6. (1) Without prejudice to regulation 12, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.
(2) In so far as it is in plain intelligible language, the assessment of fairness of a term shall not relate–
(a)to the definition of the main subject matter of the contract, or
(b)to the adequacy of the price or remuneration, as against the goods or services supplied in exchange
Justin, how does the parking company expect to operate if it succeeds in its intention to deter people from paying the £75 charge?
The level of the charge is disproportionate because the revenue from parking services is provided by only a small proportion of users. These users subsidise the free users.
The level of the charge is disproportionate because the revenue from parking services is provided by only a small proportion of users. These users subsidise the free users.
Edited by Zeeky on Tuesday 18th March 10:39
10 Pence Short said:
In your first example, there is a breach of contract for staying. In your second, there isn't. People can stay as long as they want, if they're willing to pay for it.
Perhaps someone can come up with a case authority High Court or better on the issue of whether a price (and price alone)for a product or service can unilaterally create a penalty clause?
Guidance of the attitude towards judging consumer contracts by their price alone can be found in the Unfair Terms in Contracts Regulations 1999;
This help underline the courts' unwillingness to interfere in the pricing of services and goods.
I disagree with your interpretation of the UTCCRs.Perhaps someone can come up with a case authority High Court or better on the issue of whether a price (and price alone)for a product or service can unilaterally create a penalty clause?
Guidance of the attitude towards judging consumer contracts by their price alone can be found in the Unfair Terms in Contracts Regulations 1999;
This help underline the courts' unwillingness to interfere in the pricing of services and goods.
They were set out to outlaw a group of terms which would be *automatically* unfair. That limited scope is outlined to be terms that are not of the main essence of the contract, one of those core term exempt from the Regs is price. So, for example a £500 a month gym membership is not unfair under the UTCCRs as the price is exempt, but you could argue that a 12 month notice period the gym goer would have to give is.
Simply because the UTCCRs do not *automatically* make something unfair in that limited context, that does not mean that situation is not subject to other statute or case law, in this example around penalty clauses.
With regards to the penalty clause based on price argument, that is just me seeing the logical progression. I guess it would depend on the wording and the Judge on the day in the same way that these cases are currently heard.
Edited by JustinP1 on Tuesday 18th March 11:00
Zeeky said:
Justin, how does the parking company expect to operate if it succeeds in its intention to deter people from paying the £75 charge?
The level of the charge is disproportionate because the revenue from parking services is provided by only a small proportion of users. These users subsidise the free users.
I agree on both points! The level of the charge is disproportionate because the revenue from parking services is provided by only a small proportion of users. These users subsidise the free users.
I don't think the parking companies in the way they have evolved at the moment have an easy job in maintaining a business model with legally water tight way forward. They will just remain to exist on the fringes of the law, with the shareholders raking it in as long as they can.
JustinP1 said:
Simply because the UTCCRs do not *automatically* make something unfair in that limited context, that does not mean that situation is not subject to other statute or case law, in this example around penalty clauses.
With regards to the penalty clause based on price argument, that is just me seeing the logical progression. I guess it would depend on the wording and the Judge on the day in the same way that these cases are currently heard.
As far as I'm aware, something can only be considered a penalty if construed as resulting from a breach of contract. Poor wording, ambiguity or sleight of hand may expose an agreed sum as being a penalty, as in the case referenced in the OP.With regards to the penalty clause based on price argument, that is just me seeing the logical progression. I guess it would depend on the wording and the Judge on the day in the same way that these cases are currently heard.
Edited by JustinP1 on Tuesday 18th March 11:00
If the payment required for the service is laid out clearly and unambiguously as being the charge for the parking itself, then I don't believe price alone can be used to determine it as a penalty, notwithstanding there would be no breach of contract to hang your penalty hat upon in the first place. I could be wrong, but I doubt you'd find any authority to the contrary (yeah, yeah, famous last words...).
In many aspects the country courts are seemingly a lottery and it's daft of Parking Eye or the other PPCs to rely on any of them when presenting their case. A sad thing is that many hours of court time are being wasted in hearing ill prepared cases, too.
10 Pence Short said:
If the payment required for the service is laid out clearly and unambiguously as being the charge for the parking itself, then I don't believe price alone can be used to determine it as a penalty, notwithstanding there would be no breach of contract to hang your penalty hat upon in the first place. I could be wrong, but I doubt you'd find any authority to the contrary (yeah, yeah, famous last words...).
You may be right - I'll be totally clear and admit it's an interesting quandary that is beyond my purely academic qualification in contract law!With regards to what you've mentioned though, when cases are decided and contracts considered, it is not just the written word that is considered, and indeed, often this becomes a sideline. What is more important is the context of the contract, the position of the parties and the intention of them.
For example, I might head a section of a contract 'Penalty Clause' - but this is irrelevant in understanding and determining the contract, and indeed whether that section was indeed a penalty clause or not.
Examining such a contract as you've hypothesised, I would expect the analysis to be based around the intentions of the parties, that being:
Does the parking co really expect that parkers will choose to pay from their own free will £75 for 121 mins of parking when 120 is free?
At the point that consideration is made, does the parker really intend to park for 121 minutes or over, or would they almost without fail intend to stay for no more than 120?
On that basis it would be the understanding of both parties that although it is not headed as such, staying for more than 120 mins is a de facto default/breach from what both parties intend the contract to be concluded. As such, the liquidated damages/penalty clause argument comes into play.
On that matter, clearly a £75 charge for parking is not commercially justifiable and would be seen as a penalty clause.
Although I don't have a case law reference for the above, it is worth noting that I saw in at least one clamping case that the 'positive contract' method failed. In that case, to avoid the penalty clause issue, the clamping co made the contract so that the parker agreed to pay £150 for clamping and £300 for towing.
The judgment was that no-one in their right mind would want to pay for such a service, and thus the intention of the parker when consideration took place and the contract entered into would always be to avoid that scenario - hence it was a penalty clause in practice.
10 Pence Short said:
As far as I'm aware, something can only be considered a penalty if construed as resulting from a breach of contract. Poor wording, ambiguity or sleight of hand may expose an agreed sum as being a penalty, as in the case referenced in the OP.
It will be deemed a penalty if the "charge" is not a reasonable pre-estimate of their loss. What is their loss when you stay 5 minutes over? Becomes even more interesting, as with this example, if they aren't even charging people to park there in the first place!TX.
Terminator X said:
It will be deemed a penalty if the "charge" is not a reasonable pre-estimate of their loss. What is their loss when you stay 5 minutes over? Becomes even more interesting, as with this example, if they aren't even charging people to park there in the first place!
TX.
You're misunderstanding the conversation. If the sum being sought is for the service provided (as opposed to damages for breach of contract), the issue of pre estimates of loss is irrelevant as there are no damages.TX.
i'll be brief as I once posted my encounter ( well my wife's with parking eye)
on two occasions, she has parked and gone over tiime limit. (just- nothing malicious, just shopping, spending money and the time it takes to shop with children)
on both occasions, we ignored all letters sent......... not a single piece of action was taken against us.
I have staff who reguarly park, all day in a city centre, parking eye operated car park (i.e 8-9 hrs worth in 3 hr bays)
p.eye have gievn up sending them letters.
no enforcement.
on two occasions, she has parked and gone over tiime limit. (just- nothing malicious, just shopping, spending money and the time it takes to shop with children)
on both occasions, we ignored all letters sent......... not a single piece of action was taken against us.
I have staff who reguarly park, all day in a city centre, parking eye operated car park (i.e 8-9 hrs worth in 3 hr bays)
p.eye have gievn up sending them letters.
no enforcement.
austinsmirk said:
I have staff who reguarly park, all day in a city centre, parking eye operated car park (i.e 8-9 hrs worth in 3 hr bays)
I'm sorry but from the landlord's viewpoint they should receive a dose of VBRJ.Freeloaders like this is why the private parking industry exists.
The alleged ineptness of Parking Eye does not make the behaviour acceptable.
10 Pence Short said:
Terminator X said:
It will be deemed a penalty if the "charge" is not a reasonable pre-estimate of their loss. What is their loss when you stay 5 minutes over? Becomes even more interesting, as with this example, if they aren't even charging people to park there in the first place!
TX.
You're misunderstanding the conversation. If the sum being sought is for the service provided (as opposed to damages for breach of contract), the issue of pre estimates of loss is irrelevant as there are no damages.TX.
albeit that is why they're coming a cropper in the courts presently isn't it?TX.
Terminator X said:
Ah ok albeit that is why they're coming a cropper in the courts presently isn't it?
TX.
They and parkers are coming a cropper all over the place. It's a lottery and a waste of courts' time. albeit that is why they're coming a cropper in the courts presently isn't it?TX.
I'm almost of a mind to offer a PPC the chance to go to the higher courts for them to make a binding decision, if they would agree to waive their costs.
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