I came across a post by a user called ‘Bumpole’ on the Pepipoo forum which neatly summaries the applicable law to the Beavis case.
The post is reproduced below for your enjoyment:
I was having a quick after-work drink in Appleking’s Bar the other day, just behind Fetter Lane, when I bumped into old Martian friend of mine whom I hadn’t seen for quite a while. We greeted each other merrily enough but I soon sensed from his demeanour that something was wrong. So after the usual pleasantries about each other’s wife and kids, I said:
“Anything the matter old man? Only you’re looking a bit browned off.”
I meant it literally. His normally verdant complexion had gone a distinct shade of sepia, a sure sign that something had got to him. For answer, he pulled a yellow-and-black checked envelope out of his pocket and slapped it down on the bar.
“Just been given one of these,” he said.
“Oh dear,” I said. “What happened?”
“Parked my saucer in a retail park up near Islington. I was only there for 10 minutes. I did everything right – paid the fee, stuck the ticket in the window, visited the adjacent shop – but they got me for parking a circular vehicle in a rectangular bay. £85 they’re demanding! It’s fx*!!*x ridiculous!”
It wasn’t like him to swear. This really must have bugged him.
“I shouldn’t worry about it,” I said soothingly. “They’ll never get the NTK to Mars within 56 days.”
“I know that,” he snapped, plainly unsoothed. “That’s not the point. It’s the principal of the thing. Your parking laws are a fx*!!*x scandal.” He took a sip of his drink and then continued: “Take this clause about circular vehicles: it was buried deep in the small print. It’s obvious the thieving shyst*rs were hoping I wouldn’t see it. I can just see them rubbing their hands. “Oh look, here comes another one.” I know that, you know that, why can’t your Courts see that? It’s high time you people got your parking mess sorted.”
He downed the remains of his drink testily. I ordered him another one, and a pint for myself.
“As a matter of fact,” I said, “we’ve got a case coming to the Supreme Court very soon. I think it’ll interest you.”
I pulled my Ipad out of my briefcase and got the COA judgement up on the screen for him.
“Here…..Parking Eye v Beavis,” I said.
His eyes locked onto the screen and he scanned the whole thing in ten seconds flat. When he’d finished he shifted his gaze back on to me, his face inscrutable.
“Well?” I said. “What do you reckon the Martians would say about that?”
“Pffff.” He shrugged his shoulders. “We’d say some of it’s right and some of its wrong.”
“Aw come on,” I said. “You can give me more than that.”
He’d been a lecturer in Universal Jurisprudence a few centuries back so I was interested to hear what he thought.
“You really want to know?”
“I really want to know.”
“Well……. Where do I start? I don’t want to harp on about what you already know so forgive me for going back to basics -”
I slapped him on the shoulder.
“It’s fine,” I teased. “It’s what you do. You can’t help yourself.”
“- as I was saying, it’s important to keep in mind the general rule that an injured party is only entitled to be compensated for his actual loss. The whole point of pre-agreed damages – we call them PADs by the way, much easier than liquidated damages – the whole point of a PAD is to by-pass the time and trouble of trying to prove these actual losses in the event of a breach. It’s a broad-brush approach, a bit of rough guess sometimes – but it still has to be based upon a genuine pre-estimate of loss. It would be unconscionable to demand more – even if the other party agrees. A PAD is not intended as a vehicle to tag on extras. To do better out of another’s wrong-doing than you would out of his right-doing is a particular brand of unconscionable enrichment.
Somewhere along the line, PADs in excess of a genuine pre-estimate of loss got to be labelled “Penalties”. It’s an unfortunate mis-nomer. We prefer to call them Excess Charges.”
“Why? What’s wrong with “Penalties”? It’s a label that’s been used for years.”
“Well look at the confusion it’s caused. Penalties with a capital P means damages in excess of a GPEOL; penalties with a small p means punishment, the main purpose of which is deterrence. So not all Penalties are penalties. There are plenty of instances where the motive for an Excess Charge, or Penalty, is not punishment or deterrence but something quite different. Like greed.”
His own parking ticket was still lying on the bar between us. He stabbed at it with his forefinger angrily. “Greed,” he said again with utter disgust. Then he sighed and gave a sudden, small smile.
“Do you know, this reminds me of a conversation I had with Lord Dunedin once. Years ago, it was. We were in this very bar, as it happens, talking just as you and I are now. He’d been busy drafting his judgement in the Dunlop case and asked me to have a look. He was particularly proud of the bit where he says: “Provided the figure (for pre-agreed damages) is not extravagant there would seem no reason to suspect that it is not truly a bargain to assess damages, but rather a penalty to be held in terrorem.” Well!”
He stabbed at his ticket again.
“So what about this then, eh? There is EXTREMELY – ” (he barked so loudly I nearly spilt my drink) “- EXTREMELY good reason to suspect this charge here is NOT a bargain to assess damages. And the same goes for Beavis. We all know Parking Eyes’ primary objective in fixing the charge is nothing to do with assessing damages; it is entirely to do with making a profit. In fact the operation is so lucrative they actually pay for the privilege of doing it. So whether the parking charge is extravagant or penal in nature has no bearing at all on the indisputable fact that it in no way reflects a bargain to assess damages. The fact that as a profit-making venture the whole scheme is hugely successful is clear evidence the charges significantly exceed possible losses. The charge in dispute is an Excess Charge. Period.”
“So did you make that point to Lord Dunedin?”
“It’s the first thing I said. Dunny, I said, that sentence will have to go. Perhaps I should have been more diplomatic because he didn’t take it very well. So I tried to backpedal a bit, to spare his feelings. I told him it was mainly the word “extravagant” I didn’t like.
What’s wrong with it? he said.
It’s entirely subjective, I said. A shilling to you is £1000 to a poor man. How will anyone know what you mean?
He was beginning to get quite miffed. He frowned and mumbled: Anyone with half a mind will understand. It means exorbitant, immoderate, profligate.
Dunny, I said, those are just synonyms. They’re equally subjective. We need an objective definition.
OK then, he said, let’s take it back to its root: extra-vagant – from the Medieval Latin – wandering beyond the usual bounds.
The usual bounds being genuine pre-estimate of loss?
I remember how he smiled triumphantly but then the smile faded. He said: But you see I can’t put “Provided the figure does not wander beyond a GPEOL, there would seem no reason to suspect it is not a GPEOL” . It wouldn’t sound like an important dictum. It’d never get quoted. No, I shall leave it as “extravagant”. And mark my words, that line will still be quoted in Court a hundred years from now.
I remember thinking: why do humans ask for others’ opinions when all they really want is praise? But anyway, I left it at that.”
The Martian paused to take a gulp of his drink and swallowed it noisily.
“Anyway,” he said, “back to Beavis: where was I?”
“You said it was an Excess Charge, therefore unenforceable, end of story.”
“Ah. No. Not quite end of story. You still have to ask: are there any occasions where an Excess Charge might yet be upheld by the Courts? Moore-Bick LJ alludes to this at para 27: “other factors may be present which rob the bargain of that (unconscionable) character”. He also mentions other recent cases where the Excess Charge may have been imposed for reasons that outweigh the penalty factor, such as commercial considerations or restrictions on competition.
However, the COA in Beavis were in effect looking at factors which might rob deterrence itself of its unconscionable character – the argument being that if deterrence were the principal purpose, factors such as commercial or social justification could neutralise its unconscionability, so leaving the charge enforceable. It’s difficult to see how this argument can apply in Beavis where the principal purpose of the charge was not deterrence. Even so, whatever Parking Eye’s intention there is no doubt the charge will have a deterrent effect. Car park contracts are a breed apart in many ways. They are particularly easy to breach. In those with no entry/exit barriers there is nothing to stop you from parking without paying, or from staying longer than allowed, and some people would do so again and again if they thought they could get away with it. As the His Lordship says, a system which deters such behaviour could be of benefit to both the car park owner and the law-abiding car-parking public. So…though this factor cannot directly rob the charge of its unconscionable character, it could be argued that the side-effect of deterrence outweighs the charge’s unconscionable character.”
“I’m not sure I see the difference between rob and outweigh,” I said.
“Mmm. It’s quite a subtle difference, but significant. In the former, the purpose of the charge (deterrence) is robbed of its unconscionable character and so becomes conscionable; in the latter, the purpose of the charge (profit) remains unconscionable but the detrimental effect is outweighed by the benefits of the side-effect.”
He took another gulp and belched deeply. He was clearly getting into his stride and enjoying himself. I sneaked a look at my watch. Supper would be in the dog if he got too carried away.
“It’s a tricky one, this. The Respondent’s scheme is driven entirely by a motive to do better out of another’s wrong-doing than they would out of his right-doing. The business model is based entirely upon unconscionable enrichment. So the line of argument would go: “forget about unconscionable enrichment; the charge is still worth upholding because it gives the greatest benefit to the greatest number”. It’s a utilitarian-style argument, and has its attractions. But it will always lose to the counter-argument that the community as a whole will benefit more if the law is clear and consistent and above all strives to be fair to each and every individual.”
We were silent for a moment, mulling contentedly.
“So,” I said. “Suppose for the sake of argument that deterrence really was Parking Eye’s main purpose? Would you agree with the COA’s judgement then?”
He snickered loudly, like a horse.
“Do I agree with them saying a penalty isn’t a Penalty unless it’s extravagant?”
The snicker escalated in pitch and volume into a soprano screech. Others in the bar looked round, startled. I nudged him and he stopped, wiping a tear from his eye. Then he shook his head.
“Sorry. I’m being flippant. I think what they meant to say was: it’s an Excess Charge all right, but it’s enforceable because the purpose behind it – deterrence – is commercially and socially justified. That’s all very well, but the problem is, it’s turning the previous law on penalties on its head. And that’s without fully considering the other factors why penalties have been deprecated for so many years.”
“Well I can think of three, straight off:
Number one: how do you set the level? A penalty should be set at a level likely to achieve its purpose, and no more. The criminal courts go to great care to get it right; added to that they are constrained by safeguards – both statutory and at common law – that have evolved over the years. But with contractual penalties it’s anybody’s guess how the figure is arrived at. How can that be safe? It’s not enough simply to say it’s OK as long as it’s not extravagant. In addition, a broad-brush approach is particularly inappropriate in relation to car parks since deterrence levels will vary according to the type of monitoring that is in place. In car parks where the chance of being caught is low, the chancer will only be deterred by a correspondingly high penalty; whereas with ANPR, where the offender has a 100% chance of being caught, the penalty could and should be considerably lower. It is interesting to note that if Mr. Beavis’ overstay had been in a municipal car park he would have been charged £25 if he paid promptly. The fact that Parking Eye’s prompt-payment charge is precisely double that illustrates this point exactly.
Number 2: a penalty does not only deter: it also punishes. Should an injured party be allowed to seek retribution? Some people would say that if a man parks his car knowing full well he is not going to pay the promised fee, it’s only right he should suffer the advertised consequences. Others would say (and in my view they are right): retribution has no place in civil law other than in the very rare instances of exemplary damages awarded by the Court. It is certainly not open to the contracting parties themselves to heap retribution upon each other.
Number 3: Nemo iudex in causa sua – let no-one be a judge in his own cause. Perhaps the most important point of all. Imagine if being a magistrate suddenly became a money-spinner because Parliament decreed they could keep their fines? It doesn’t bear thinking about. It is crucially important for society as whole that anybody performing a judicial act – such as imposing penalties – has no personal interest in the outcome. There has been a great deal in the media recently about aggressive tactics employed by PPCs, and cases of strong mitigation being ignored.” He picked up his own ticket and turned it over, thoughtfully. “And it’s all a direct result of PPCs being allowed to keep their fines.”
He gazed at his ticket for a moment, then suddenly blew on it and it burst into flames. Just as the barman looked over, scowling, the ticket burnt itself out into thin air, leaving no ash. The Martian wiggled his eyebrows, signalling he required appreciation. The little crowd of customers who saw it clapped.
“So,” he said. “That’s what the Martians think of your parking policy.”
“Well what do you do then?” I asked.
“We compromise. We have an independent authority, the MPA, which is in charge of licensing all PPCs and regulating their conduct. Without this licence a PPC is not entitled to obtain registered keeper details. Parking tickets – whether for trespass or breach of contract – must be based upon GPEOL and approved by the MPA. Anything above £10 requires special dispensation. PPCs are in addition permitted to charge penalties, but only in accordance with a strict and carefully calculated scale, capped at £20. Most important of all, these penalties are declared separately and are subject to 100% tax. Believe me, the Revenue get on to the PPCs pretty smartly if they don’t pay up.”
My mobile phone vibrated. It was a text from She Who Dictates My Timetable: “Dt even THINK of 1 4 the rd.”
I shoved my Ipad back into my briefcase, promised the Martian I would promulgate his views, and scuttled off home.