THE PARKING EYE v. BEAVIS RULING : REASONS WHY I BELIEVE IT 'S NOT APPLICABLE TO PAY-PER-HOUR CAR PARKS
The are many circumstances in which it is right, fair and proper for private car parking companies to issue invoices against motorists who have either failed to purchase a ticket , or have overstayed the time permitted on the ticket. These types of transgressions have brought about a small financial loss to the company , which they legally entitled to chase up.
However , even in these circumstances where payment has been made, the PCN does not set out to recover losses but instead represents a blatant attempt to make easy profit. These money making demands can only be described as manifestly unreasonable, and can never be justified on any sound and rational criteria. They bear no relationship whatsoever to genuine pre-estimates of loss incurred by any alleged breaches.
So what is the basis for distinguishing pay-by-the-hour car park operators from those than run manage car parks which offer the motorists up to 2-3 hours free parking.
1. The business model for limited free parking works on the basis that the great majority of motorists who enjoy the benefit of free parking at the site, are effectively subsidised by the minority of defaulters, who have been given clear notice of the consequences of overstaying. Regretably, the PCNs issued need to be substantial in order for the car park operators to cover their operational costs.
2. Moreover the penalty charge could be regarded as the consideration in the contract which the defaulting motorist is obliged to pay under the agreed terms. This means that the PCN is not in principle a claim for damages , and as such can be set at a level to make the business commercially viable.
3. In pay-per-hour car parks , the business model is entirely different. Ticket revenue is sufficient to meet operational costs , which means PCNs are not intended to cover costs but are simply there to provide opportunities for generating lucrative profits. They are nothing more than speculative invoices demanding sums way beyond any actual loss that may have occurred , say for example due a 15 minute overstay.
4. In hourly paid car parks the law regarding damages has to apply ; namely that the sum claimed must be a genuine pre-estimate of the actual loss incurred . This means that in the above example the loss of revenue equates to one unpaid hour.
5. The Court of Appeal in the Beavis case made a clear reference to the fact that their decision , in favour of Parking Eye , was NOT relevant to pay-per-hour type of car parks.
6. In pay and display car parks , the parking fee clearly represents the consideration given by the motorists under the terms of the contract. This means that any excessive claim for damages imposed on a defaulting motorist becomes an unenforceable penalty , simply because it is manifestly unreasonable and punitive in nature.
7. The Supreme Court in the Beavis case took the view that the £85 penalty was commercially justified by also looking at Parking Eye's business model , which needed to focus on the traffic space maximisation objective. This included the need to deter motorists from overstaying, and to ensure a reasonable turnover of visiting motorists, by ensuring as many parking spaces as possible to build up the potential customers coming to that shopping area. The abuse of limited free parking , especially where it is always very busy, needed to be deterred.
8. But PCN's issued by pay-per-hour car park operators tend to focus on one business objective only : to fleece the unsuspecting and innocent motorists , who commit minor transgressions. Their business model is nothing more than a licence to print money and get rich quick.
9. Finally , it needs to be pointed out that in a busy hourly-rate car parks , operates with a 100 bays , open 10 hours a day , charging £1 per hour can generate £7000 per week , which generates a yearly revenue total of £350,000 . This is more than enough to cover the maintenance and administrative overheads of an organisation that needs only to install a ticket machines, display boards and computer linked cameras. In sharp contrast Parking Eye in the Beavis case would need to find well over 4000 defaulters to reach that figure .....possibly double if discounted fines of £40 were on offer for prompt payment. The two business models are indeed poles apart.
10. Read the judgement ( via the Parking Prankster case list blog ) of Deputy District Judge C. Mahy sitting at Wrexham County Court in the case of Parking Eye Ltd v. Cargius 2014. Although this judgement took place during the early stages of the Beavis dispute , the well articulated rationale for distinguishing the two types of car parking operators cannot be faulted.