New Judgment: Cavendish Square Holding BV v Talal El Makdessi; ParkingEye Ltd v Beavis [2015] UKSC 67
04 Wednesday Nov 2015
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On appeal from: [2013] EWCA Civ 1539; [2015] EWCA Civ 402
The Supreme Court allowed the appeal in Cavendish and dismissed the appeal in ParkingEye, thus upholding the validity of the disputed clauses in both cases concerning whether the rules against penalty clauses applied to commercial contracts between sophisticated parties and, if so, if the clauses in the present cases are within the scope and are therefore enforceable.
Lord Neuberger and Lord Sumption giving the joint lead judgments stated that the fundamental principle is that the penalty rule regulates only the contractual remedy available for the breach of primary contractual obligations, and not the fairness of those primary obligations themselves. The law will not generally uphold a contractual remedy where the adverse impact of that remedy significantly exceeds the innocent party’s legitimate interest. They reasoned that the true test for establishing whether a contractual provision is penal is whether the impugned provision is a secondary obligation which imposes a detriment on the contract-breaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation.
The court concluded in the Cavendish appeal that neither clause 5.1 nor clause 5.6 in this case were unenforceable penalty clauses.
In the ParkingEye appeal it declared that the charges in this case did not contravene the penalty rule or the Unfair Terms in Consumer Contracts Regulations 1999.
For judgment, please download: [2015] UKSC 67
For Court’s press summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII
To watching the hearing please visit: Supreme Court website
1 comment
Malcolm Turtle said:
05/11/2015 at 14:34
An £85 fine/charge is all most all of a pensioners weekly income from the state pension. More than most receive in benefits a week and a great deal for young families. Parking Eye are a very profitably business and have now been given a blank cheque pretty much to make even more. They operate with ANPR cameras so car parks are unmanned and charge motorists for being minutes over time without any allowance for time to park, or exit problems. The majority of people do not deliberately overstay and this is why there is a huge amount of bad feeling towards Private Parking Companies made worse by the level of charges where £100 is not uncommon. The internet is littered with very angry and upset people who feel they have been entrapped including campaigns with 50,000 signed up to pursue eg DVLA releasing information which is not their property to disclose.