Car parking charge triggers landmark contract dispute

An £85 charge levied on a motorist who outstayed his welcome in a free shopping centre car park triggered a contract dispute which raised novel issues and required the full attention of three Court of Appeal judges.

The car park was fitted with prominent signs which stated that only two hours of free parking was permitted and that an £85 charge would be imposed on overstayers. The motorist’s car was parked there for almost three hours, but he refused to pay the charge and was taken to court by the car park’s operators.

A judge accepted that, in circumstances where the operators suffered no financial loss if a car overstayed, the charge ‘had the characteristics of a penalty’. However, in ruling that the motorist was contractually bound to pay up, he found that the charge was commercially justified and was neither improper in its purpose nor manifestly excessive in its amount.

In rejecting the motorist’s appeal, the Court noted the obvious benefits to both consumers and retail businesses of enabling free parking for limited periods. There had been no want of good faith on the operators’ part; the amount payable was not unconscionable or extravagant and the charges were justified as a deterrent to overstayers.