Penalty Rule — Charge Out of Proportion to Legitimate Interest (Beavis 2015)
The rule against penalties may render unenforceable a secondary contractual obligation triggered by breach where it imposes a detriment out of all proportion to the innocent party's legitimate interest in enforcing the primary obligation. Although the rule's traditional tests were stated in Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd [1915] AC 79, its modern test was restated by the Supreme Court in Cavendish Square Holding BV v Makdessi; ParkingEye Ltd v Beavis [2015] UKSC 67 (para 32): a charge is penal only where it is "out of all proportion to any legitimate interest" of the operator, not merely because it exceeds actual loss. In Beavis an £85 charge was upheld, so this argument must rest on genuine disproportion — a charge well above the industry/Code norm, or where the operator has no legitimate interest at all — not on the mere absence of loss.
Legal basis
ParkingEye Ltd v Beavis; Cavendish Square Holding BV v Makdessi [2015] UKSC 67 (para 32) — restating the penalty rule whose traditional tests were stated in Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd [1915] AC 79. Cite Beavis as governing for consumer parking; Dunlop as historical origin only.
How to identify this in your case
A private parking charge where the sum demanded is clearly extravagant or out of proportion to any identifiable loss or legitimate interest. Classic signs: charge is £100+ for parking in a completely free or underused car park, or the charge was dramatically increased after 'administration fees' were added by a debt collection agency.
Sample appeal wording
I am writing to dispute parking charge [reference] and to raise the common law rule against penalties. The charge of £[amount] purports to be a contractual charge for alleged breach of parking conditions. Under the long-established rule against penalties in English law — articulated in Dunlop Pneumatic Tyre Co v New Garage [1915] AC 79 and recently restated by the Supreme Court in Cavendish Square Holding BV v Makdessi / ParkingEye Ltd v Beavis [2015] UKSC 67 — a contractual sum is an unenforceable penalty if: (a) it is extravagant and unconscionable in comparison with the greatest loss that could conceivably be proved to flow from the breach; or (b) it is not a genuine pre-estimate of damage and cannot be justified as protection of a legitimate interest proportionate to the sum. This charge satisfies neither test. [State why.] It is therefore unenforceable as a penalty clause. I decline to pay.
Replace [PARKING DATE], [NtK DATE] etc. with your own dates before sending.
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Scan my ticketSources
- Dunlop Pneumatic Tyre Co v New Garage [1915] AC 79
- Cavendish Square Holding BV v Makdessi [2015] UKSC 67
Related appeal grounds
- CRA 2015 Unfair Term / Disproportionate Charge (post-Beavis)
- E-scooter rental — not the named hirer (account compromise/family use)
- Enforcement policy not equality-screened (Northern Ireland only)
- Northern Ireland: debt too old to enforce (6-year limit)
- Pressure Selling / Aggressive Enforcement — CPRs 2008 Breach
- Private car park signs not in Welsh where required