A motorist has lost his Supreme Court challenge against ‘unfair’ fines imposed by a car park, in a case which will set a precedent in consumer contracts law.

Barry Beavis, aged 47, claimed an £85 charge for breaching a two-hour limit in Essex in April 2013 was “unfair and disproportionate”. The Court of Appeal dismissed Mr Beavis’s claim against management company ParkingEye in April this year. However, he appealed to the Supreme Court, but judges there have also rejected his case. The company said its charges were “fair” and “legally enforceable”.

The Beavis v ParkingEye case hinged on whether the fine charged by parking management company ParkingEye is classed as a penalty, which would make it unlawful as penalties need to bear a relation to an actual loss incurred.

In this case the company does not incur any loss as a result of the overstaying. However, the Supreme Court ruled that the fine was not a penalty as the charge authorises the company to control access to the car park in the interest of customers and the wider public.

Supreme Court president Lord Neuberger and Lord Sumption ruled that the charge was not unfair, and that overstaying penalties are a ‘normal feature of parking contracts’. The ruling was agreed on by six out of the seven justices while Lord Toulson dissented. The judgment stated that fines were beneficial to motorists themselves as they make parking spaces available to them which might otherwise be clogged up by long-stay users. The Judges said:

‘The risk of having to pay [the fine] was wholly under the motorist’s own control. All he needed was a watch.’

John de Waal QC of Hardwicke chambers, who acted for Barry Beavis, said the case sets a new test for ‘take it or leave it’ consumer contracts as the law was last considered at this level 100 years ago. He added:

‘Until today, charges which had been agreed in advance, payable on breach of contract, were disallowed as unlawful penalties unless they could be justified as a genuine pre-estimate of loss. Today’s judgment sweeps away that rule and says that deterrent charges will be allowed if there is some commercial justification for them.’

Derek Millard-Smith, a driving law and consumer specialist at JMW Solicitors, said the ruling should not be seen as giving parking companies ‘free rein’ to take advantage of those who overstay. He said:

‘This ruling is significant in that it provides clarity and is to the benefit of most drivers…Had Mr Beavis prevailed, we might well have seen the end of free parking. Landowners providing spaces would have felt compelled to charge for parking from the minute that cars arrive in order to prevent abuse of those facilities.’

No cost orders were made. Beavis’ lawyers acted pro bono and said they had persuaded ParkingEye to give an undertaking not to seek costs against Beavis if he lost.